An in-depth look at how the hotel industry is affected by canceled or postponed events around the world due to the coronavirus outbreak.
LONDON and BROOMFIELD, Colorado—Tracking events that have been affected by social distancing controls has been one of the common ways to get a pulse on the coronavirus (COVID-19) outbreak across the globe.
At STR, parent company of Hotel News Now, we have been tracking these event cancellations and date changes as a way to make better-informed decisions around forecasting and other analysis on hotel performance.
The number of events and organizations affected by said controls keeps increasing dramatically, thus we have focused our tracking efforts on some of the major hotel markets. Below is the latest summary of the events that have shown up on our radar (as of 16 March).
Fifty-seven percent of the events we tracked were postponed to the third and fourth quarters of 2020. This is mainly for trade shows and sporting events.
Thirty-eight percent of events were cancelled, a majority being the annual repeating events, which take place each year at the same location.
Five percent of events were modified. In many instances, the organizers have canceled the physical event and transferred it to a virtual meeting (e.g. Facebook F8 Developer Conference planned for 5 and 6 May in San Jose, California). In other cases, the events were either reduced in size or closed to the public, as was the case with the Tokyo Olympics Lighting Ceremony that happened on 11 March at the Olympia Stadium in Tokyo.
Cancellations all over the world
It comes as no surprise to have China as the country with the most affected events, with 74 impacted events tracked, followed by the United States with 53 events and counting. Below is a summary of the top 10 countries by number of impacted events recorded.
All types of events are being affected
Analyzing the list by event type, the trade show category seems to be the most affected category due to the large crowds that those types of events attract, especially international attendees. The high number of trade shows canceled is also linked to the prompt response of companies that established travel bans for employees even before governments put more rigid restrictions in place.
The impact that trade shows have on the market is rather significant, and as such we took a closer look at a couple of these major events.
- Intertraffic: This is a biennial event held at the RAI Convention Centre in Netherlands that attracts more than 30,000 visitors. It offers the opportunity to explore trends in infrastructure and traffic management.
The show was planned for 21-24 April 2020, but it has been postponed to 23-26 March 2021. The event has a positive impact over the Amsterdam hotel market. The 2018 event resulted in an increase of 11.9% in revenue per available room (when comparing event days in 2018 to event days in 2016) for hotels in the market.
On the days of the event in 2018, hotels achieved a RevPAR premium of 41.9% versus the rest of the month for an actual RevPAR of €152.90 ($263.26), compared to €107.76 ($115.06) on non-event days.
- Design Week in Milan: As of time of writing, Italy is the most affected country in Europe with more than 27,000 cases of COVID-19. The first cases of coronavirus started to spread around the end of January 2020, but it was during the days of the Fashion Week that Italy identified the epicenter in a city called Codogno, just 60 kilometers away from Milan. The Fashion Week, which ran until 24 February, concluded with an audience-free show from Giorgio Armani.
Events started to get rescheduled and the country entered a full lockdown on 11 March. Being at the center of the pandemic, Milan quickly responded by postponing their key annual event, Design Week, which happens every April.
Design Week attracts around 400,000 visitors every year and was scheduled for 19-25 April 2020, but dates have been switched to 16-21 June.
The event days in 2019 achieved an overall 89.9% occupancy and an ADR of €408.51 ($436.18). Occupancy and ADR were below levels achieved in 2018 (respectively -1.5% and -12.2%). However, the premium of this event versus the rest of the month remains high. In 2019, Design Week recorded a 200.6% RevPAR premium versus the rest of the month: €325.79 ($347.86) versus €108.40 ($115.74).
Sporting events have been the second highest category impacted. Among the first events to be rescheduled was the Six Unions Rugby in Europe. This includes the England versus Italy match at the Stadio Olimpico in Rome and the France versus Ireland match at the Stadium Saint-Germain in Paris.
Among the most relevant sports event impacts is EURO 2020 being postponed to 2021.
It was the first time in history that UEFA-organized matches spread among different European countries. This might help to mitigate the negative impact since it will not only be restricted to one country.
Hosting cities included: Rome; Baku, Azerbaijan; Copenhagen, Denmark; St. Petersburg, Russia; London; Bucharest, Romania; Amsterdam, Netherlands; Glasgow, United Kingdom; Dublin; Bilbao, Spain; Budapest, Hungary; and Munich, Germany.
EURO 2020 would have started at the Stadio Olimpico in Rome, which can host 70,000 supporters. According to our February 2020 forecast, the market could have achieved the highest RevPAR growth of the year in June 2020 with a 9.8% increase compared to the previous year and a record ADR of €198 ($211.41).
After a negative 2019, we were expecting recovery for Glasgow this year to be helped by the EURO 2020 matches at Hampden Park Stadium with a double-digit RevPAR growth (16.2%) in June 2020.
Double-digit growth was also projected for Dublin with a 11.6% RevPAR increase and the highest ADR of the year at €182.90 ($195.29).
Not to be overlooked is the human impact. Some relevant cases among athletes:
- Serie A in Italy: A Juventus player was the first athlete in Europe to test positive for COVID-19.
- Spanish La Liga: Five Valencia players tested positive for coronavirus.
- Others: the Dutch Eredivisie; Portugal’s Primeira Liga; and MLS, NBA and NHL in the U.S. have been suspended over coronavirus concerns.
Given the magnitude and fluidity of this situation, we will continue monitoring the events landscape and analyzing its impact on the hotel industry.
Barbara Fraccascia is a forecast and research analyst with STR’s Research & Analysis team, based in London. Claudia Alvarado is Analytics Manager with STR’s Consulting & Analytics team, based in Broomfield, Colorado.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.