27 January 2023 | Market Insight, Data science, Rate Insight
From the Super Bowl to supersized festivals, the United States (US) has plenty of major events to choose from, especially in the post-pandemic era, where consumers are keen to escape their homes and invest in experiences.
That interest is boosting demand for nearby accommodation, and if your property has the good fortune of being located in and around one of these visitor draws, it could be the make-or-break moment of your year.
To analyse what effect these events have and how you should be responding in 2023, we take a deep dive into the US experience economy and how much major events are acting as demand drivers for their local hospitality markets.
Table of Contents
The Daytona 500 and Daytona Bike Week
Mardi Gras, Jazz and Heritage Festival and Essence Festival
South by Southwest and Austin City Limits
March Madness and Electric Daisy Carnival
Hit the sweet spot at your hotel by understanding market demand and competitor pricing
Baseball might be America’s national pastime, but nowadays football draws the most eyeballs and attendees.
This year’s sporting pinnacle will be held in Phoenix, Arizona, and the event is creating a massive wave of bookings, leading to inflated prices as rooms run short across the city.
While this is exactly what you would expect, the level of change is worth diving into - the spike is dramatic and will drive high revenue at your hotel, so it needs to be maximised in the immediate days surrounding the event.
Actualised and advertised hotel prices in Phoenix 2019, 2022 & 2023 - All star ratings
Ratio of unavailable hotels in Phoenix
In our charts, the week of the Super bowl is unmistakable, with prices soaring to 174% above the average for the year, hitting a high of $536 per night.
Flipping over to the supply side, rooms are in incredibly short supply, with less than 8% of hotels reporting any availability - which means they are fully sold out, operating with very strict length-of-stay policies, or simply closed.
This spike is even more pronounced than Super Bowl's held in recent years and underlines the healthy demand for major events in the US market.
February 19 and March 3-12
Daytona, Florida is one of the US’ party hotspots and demand for the biggest events of the first half of this year appears to be undimmed. Opening up the year is the Daytona 500, which is then followed up by Daytona Bike Week just two weeks later, creating a double boost for Daytona hotels in their first quarter.
In this location, hotels may want to be more aggressive with their pricing strategy as there appears to be strong interest in attending both events when we evaluate the forward-looking demand trends, as well as low availability of rooms at peak points.
Actualised and advertised hotel prices in Daytona 2019, 2022 & 2023 - All star ratings
Ratio of unavailable hotels in Daytona
In terms of room pricing, hotels are putting their rates for the Daytona 500 noticeably above levels seen pre- and post-pandemic, with rooms priced around $40 more per night than in prior years, as the percentage of hotels reporting unavailability logged in our data surpasses 90%.
Currently, however, Daytona Bike Week is not cresting last year’s pricing levels, with peak room rates sitting at $285, compared to $320 in 2022.
Our data suggests that hotels can be more aggressive in pricing for both upcoming events, but particularly for Bike Week.
Not only is the level of hotels reporting unavailability north of 80% for both key weekends of the event, but also search levels being conducted on metasearch and OTA sites for Bike Week are very high, nearly matching the peak points for searches being made for the Daytona 500.
This indicates that more demand is likely to materialise and that pricing can be moved upwards.
February 21; April 28 - May 7 and June 29 - July 3
Moving over to another of America’s entertainment capitals, New Orleans, events are key revenue drivers throughout the first half of the year as well.
We can clearly see in the data three peak points of elevated demand in the city for accommodation, which is also translating into market occupancy.
These are during Mardi Gras on February 21, the city’s annual jazz festival over April 28 to May 7, and for Essence Festival which falls from June 29 to July 3.
Actualised and advertised hotel prices in Daytona 2019, 2022 & 2023 - All star ratings
Market (city-level) occupancy in New Orleans
Using our datasets, these points become immediately obvious, and we can also see how demand directly shapes market pricing strategy, as very high demand and low availability in the case of Mardi Gras and Essence Festival contrast with a slightly softer picture for the Jazz and Heritage Festival.
The week of the Mardi Gras parade (which sits on the February 21) is already seeing market occupancy of 80%, while advertised average pricing sits at $350, similar to the actualised price over Mardi Gras week in 2022 which was $346.
Whereas demand is elevated in the case of all three, and supply is constrained, there is a clear step shift for Mardis Gras and Essence Festival in terms of the level of unavailable properties and heightened search activity.
Already 44% of rooms across the New Orleans market are occupied during the Essence Festival in our dataset and search volume is five-to-six times the volume for surrounding dates, which is why we are seeing aggressive pricing strategies being pursued in this window in particular.
March 10-19 and October 6-15
Austin is the host city to two massive events: South by Southwest (SXSW) and Austin City Limits. Both of these events have the potential to draw in crowds of 100,000+ to the city and are therefore key dates to target.
Actualised and advertised hotel prices in Austin 2019, 2022 & 2023 - All star ratings
Looking ahead, interest remains high for both events and should mean that hotels can price rooms at or above levels reached in 2019 and 2022. Advertised room pricing for the week of SXSW is currently at $323 and Austin City Limits at $395.
In particular, it is worth drawing attention to Austin City Limits, which is showing emerging interest and demand at a very high level, despite the long lead time.
Hotels already have reservations on the books and are holding back inventory for the festival and so it is definitely a point to be aggressive with pricing.
It seems most likely that room rates will exceed 2022 levels as we get closer to the event, even as peak prices are 73% above the annual average.
March 14 - April 3 & May 19-21
America’s entertainment and gambling capital is always a busy tourist destination, especially during major sporting events, but none more so than ‘March Madness’.
The NCAA Division I regional basketball finals, known as March Madness, routinely brings delight to the Las Vegas hotel market, with legions of basketball betting fans arriving on the strip - now making it the most bet-on sporting event on the calendar.
This event is causing a substantial spike in emerging demand and therefore pricing for the event dates in late March.
At this time pricing shoots per room night shoots up to $304, which is 64% more than the average price posted in 2023.
This is clearly a critical opportunity, which even exceeds the potential of the Superbowl for Vegas hotels if this trend holds up until March Madness begins.
Actualised and advertised hotel prices in Las Vegas 2019, 2022 & 2023 - All star ratings
We can also see a prominent spike over the weekend of the EDC Festival, which takes place in May. This event attracts more than 100,000 revellers to the city and already half of hotels are reporting unavailability, pushing prices up by a third, citywide, on average to $241.
The prominence of these two events on the city’s demand profile demonstrates that even in such a hotel-heavy location that is peppered with events, there can be major spikes to take into account.
As we move further away from the memory of lockdowns it is clear that the appetite for experiences remains undimmed for American consumers.
While you will need to monitor demand and pricing for events regardless of circumstances, it does appear so far that there is a sustained boost to experiential spending.
Rate increases for the events evaluated here range from 4% above the annualised average price per room night to 174%, with a median price increase of 43% at the peak of demand. Events are unequivocally a potent revenue driver.
The lesson for accommodation providers is clear: match your pricing strategy to market demand and pay special attention to how the demand curve is evolving in the run up to the event.
With the right data sets that show the true market situation from multiple angles you are best prepared to make the correct pricing decisions.
Giving you that information is our top priority and we hope that this set of insights has shown value of up-to-date market and pricing intelligence, especially when it is deployed to analyse these moments of massive potential profitability.
Why not take a look at our commercial platform and see how you can strategise around events in your market to optimise revenue?
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