Hosting Super Bowl impacts host market hotel performance to varying degrees

Miami/Hialeah, Florida, the 2020 host market, is projected to reach a record hotel average daily rate (ADR) level during the event weekend – between US$520 and US$540 for Friday, January 31 through Sunday, February 2. The market will be starting from a higher basis because of the already high rates in the market. Miami is also expected to be among the top performers in terms of absolute occupancy, with a forecasted range of 91-94% during the 3-day period.

Miami last hosted a Super Bowl in 2010, but the landscape has changed drastically since, as around 10,000 additional rooms have entered the market, and the economy likely played a part in 2010 ADR levels.

This leads to the question of how other host markets over the last decade performed, and what can their performance tell us about the Super Bowl’s effect?

The overall theme is, unsurprisingly, strong growth. However, host market data indicates that historical performance during the Super Bowl period, and the composition and size of the market influence the level of this growth. While it’s tempting to dive straight into hotel occupancy as the barometer of success, often markets with lower occupancy compensate with ADR increases, which ultimately drive RevPAR growth.

Houston, Texas, is a case in point and the 2017 host exceeded expectations in reporting a year-over-year RevPAR increase of 356%, despite occupancy failing to exceed the 90% bar set by other hosts. However, this lift was helped by a low performance base in the same period of the previous year. While overall occupancy might have lagged behind other hosts, three submarkets reported levels above 90% – highlighting another Super Bowl trait of properties closer to the stadium achieving high actual levels. The Houston CBD submarket averaged occupancy of 99.0% during the three-day period, while the Houston Galleria/Greenway Plaza and Houston Medical Center/Reliant Stadium submarkets also surpassed 90% – at 98.9% and 92.7%, respectively.

San Francisco/San Jose, California, supports the idea that a market with slightly lower occupancy can still succeed, and reported higher ADR than its 5 predecessors for the 3-night Super Bowl period. The 2016 host market breached the US$400 ADR mark despite occupancy of just 77.1%. As shown in the table above, New York reported similar occupancy and, with the pair usually running at high occupancy levels, the impact from the event was lessened.

Minneapolis/St. Paul highlighted the impact hosting can have on smaller markets and achieved a 626% RevPAR increase during the 3-day Super Bowl period in 2018. The market benefitted from having the third-smallest hotel inventory among the previous eight hosts and this being a typically slow period for the market. Growth was to be expected and it was no surprise that occupancy surpassed 90%, while ADR reached US$327.70. Interestingly, STR submarkets in Minneapolis/St. Paul achieved a RevPAR increase above 450% and the two-week period leading up to the event also resulted in a 137% RevPAR lift.

Atlanta, Georgia, on the contrary, reported lesser impact than other hosts due to its significant size. The 2019 host market sat just shy of 100,000 hotel rooms at the time of event, which made it second only to New York in the markets analyzed here. Given this, the 387% jump in RevPAR reported by Atlanta hotels is pretty impressive. As mentioned, the submarkets around the stadium reported higher growth, and the Atlanta CBD saw an 812% jump in RevPAR to US$617.17 as a result of its proximity to the city’s Mercedes-Benz Stadium.

Read the full analysis of Atlanta and Miami for further insights into the Super Bowl’s effect on host market hotels.

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