Dear Event Doctor:
We have a major event coming to our city and have already heard that hotels in and around the city are raising rates significantly in anticipation of the number of visitors we’re expecting. We want the hotels to do well, but we also want to make sure the rates aren’t so high that they cause people not to come. Any advice on how to have that conversation with our city’s hoteliers?
Sports events are partnerships between the organizer, host city and business community, including the local hotel and accommodations industries. As is the case in any partnership, it is essential for each party to define and discuss their expectations of one another before entering into a relationship.
Providing adequate hotel space at a reasonable cost to your fans cannot be an after-thought, and it is best to communicate your requirements during the bid process. Most events are great room-night and tax-revenue generators, which is why so many communities want to host them. Hoteliers often see these events as great ways to top off their annual budgets, especially at times when the hotels are expected to be full with other business if the event is not ultimately held in their market. However, overly avaricious room rates can put a bidding city at a distinct disadvantage in the pursuit of an event.
It is best to reach an agreement on room rates during the bid process, when the competitive pressures of potentially losing an event can help to keep room rates within reason. For events more than a year in the future, a rate escalator based on the consumer price index can be negotiated so hotels can reduce their risk of inflation (not much of a factor in recent years) and organizers can protect themselves against artificially increased rates after the event is awarded.
If you haven’t pre-negotiated rates with area hotels, you have little recourse. Fans, however, vote with their feet and gas tanks. I have experienced many events in which overly opportunistic room rates have resulted in higher vacancies closer to the event site, and sold-out conditions 20, 30, 40 miles or more from the hub of activity, where hoteliers offered more realistic price points.
In fact, at one recent Super Bowl, a mid-quality hotel that was directly across the street from the stadium remained unpopular with fans right through game day due to unrealistic rates and food and beverage minimums. This remained the case even when high occupancy levels at hotels elsewhere in the market forced fans to drive an hour or more to the game.
This first appeared in Sports Travel Magazine and appears here courtesy of SCHNEIDER PUBLISHING COMPANY, INC.