The Holy See makes RevPAR waves
 
The Holy See makes RevPAR waves
16 OCTOBER 2015 9:59 AM

A KPI analysis of the pope’s visit to the United States shows that the Holy See’s visit allowed hoteliers to grow RevPAR substantially, mostly by driving ADR. 

HENDERSONVILLE, Tennessee—Pope Francis visited the United States 22-27 September and was welcomed in Washington, D.C., New York City and finally Philadelphia, where he celebrated Mass at the World Meeting of Families.
 
The impact of a unique event like a papal visit can be twofold: On the one hand, a large number of leisure visitors are expected to stay the night before and after the main event; on the other hand, business and group travelers stay away from the cities that welcome the pope to avoid traffic jams and full hotels. The hotel industry has to juggle the possibility of much higher room rates and a demand spike with their desire to be welcoming hosts and offer reasonable accommodations to the masses. 
 
STR data shows the impact of the visit by day of week and by hotel chain scale. In general, the visit allowed hoteliers to grow revenue per available room substantially, mostly by driving average daily rate. Interestingly, occupancy was much less affected, as there appeared to be a demand substitution from “normal” transient guests to groups in town for the visit. (STR is the parent company of Hotel News Now.)
 
Below are the key-performance-indicator percent changes for specific dates by city. 


 
The impact on RevPAR growth was equally strong:



So it seems that hotel operators made the trade-off between ADR and occupancy in favor of room rate growth. That said, absolute levels of occupancy were already high in the prior year and the lack of occupancy growth hides the fact that D.C. and New York City were running high occupancies during the visit. It is worth pointing out that U.N. General Assembly met in New York for the same week (the Pope spoke there on Friday), which traditionally is a high demand week.


Because the pope’s arrival probably had somewhat negative impact on regular business and association demand it is probably fair to assume that the demand for limited-service hotels was driven by leisure travelers. 
 
The table below shows the RevPAR percent change for upper-midscale hotels, which we use as a proxy for limited-service hotels:



As expected, most of these increases are ADR-driven, giving hoteliers an opportunity to increase room rates and profits. 
 
Finally, a word of caution: Any hotelier in a city that hosted the Super Bowl has experienced the positive performance KPIs which then skew the year-to-date data going forward. It is likely that the data for these cities, especially in Philadelphia, will see a lift for the remainder of the year and then see a sharp drop in the fall of 2016 when the comparable data comes in.
 
But overall the impact of the pope’s visit was substantial and refreshed faithful and hotel income statements alike.
 
 

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