It’s finally the week of the BIG GAME! In May of 2016 it was announced that Atlanta would be home to Super Bowl 53 on February 3, 2019. Although this announcement came almost three years prior to the big game, it’s difficult to prepare and create pricing strategies built to handle the influx of demand Atlanta is facing this week as crowds flood to the city to enjoy football’s biggest night. The closer you get to kickoff, finding a hotel near the stadium becomes increasingly difficult and as a result, rates of available rooms skyrocket, allowing hotels to capitalize on this incoming demand.
As with any large event, there are many factors that need to be taken into consideration before deciding on the pricing strategy that will be most profitable for your hotel. We’ve put together some considerations your hotel should be focused on when prepping for a large event near your property.
1. Forecast & Learn from Other Markets
Important forecasting insights can be derived from analyzing key competitors in your market and in previous host markets. It’s useful to look at how competitors in your market are pricing and at what hotels in different host markets experienced. Were hotels in the area sold out? Do you have a sister property in another market that could provide insight on how many guests booked at each rate, what restrictions were used and when did the demand materialize?
When forecasting for large-scale events, it can be tricky to pinpoint when the demand will come. If you can gauge how far in advance both individual and group guests are booking rooms for these events it will provide a much more accurate demand picture and allow you to price more strategically, and ideally not be the first in your area to sell out. Make sure your pricing strategy considers the potential for a spike in demand and rate closer to the event. This ensures that your property will leave some availability for guests willing to pay a higher rate on a last-minute trip. For Atlanta, this would be the Patriots and Rams fans who just found out they’re headed to the championship and are now booking their trips to the big game.
2. Focus on Value Proposition of Your Rates
Guests understand that with high demand comes an increase in price and expect to pay more for their lodging surrounding events or at peak times of the year. However, guests still expect to have a good experience while on property at your hotel. You will want to find the right balance between capitalizing on the opportunity to increase your rates and providing a quality experience to your guests – even during these high-demand times. This requires you to think about more than just the rate you are charging. A few ways to give yourself a leg-up on the competition and add value to your guests’ stay:
- Consider providing room packages, with inclusions such as transportation to the event and/or to and from the airport, local events/attractions, food and beverage, and so forth
- Leverage your suite inventory during these high-demand times
- Top-notch service delivery: have the right employees in place and ensure you’re providing your guests with an unforgettable experience
3. Mitigate Risks
Large scale events bring in massive crowds and an influx of demand to your hotel, but also leave your property with limited inventory for the event dates. As a result, you want to ensure that this inventory is available to your most valuable and profitable guests. Here are a few ways to mitigate your risks around peak dates.
Set restrictions early
No matter how hard you plan, cancellations and no-shows will cause a huge last-minute challenge. When you have the advantage of advanced notice, set restrictions in your systems early, ideally before you have anything on the books for the timeframe of the event. This will save you some of the headaches caused by late game cancellations.
Strategies you may want to consider:
- Require a fully prepaid, nonrefundable rate and acknowledge that there are no cancellations or refunds if they must cancel the reservation
- Implement a minimum length of stay to benefit shoulder nights and ensure an even stay pattern over peak nights
Manage travel packages carefully
If you are partnering with a 3rd party to provide a flight & hotel package or a VIP experience that includes a ticket to the event itself, make sure that you are capitalizing on your limited supply of rooms. Much like for transient reservations, you may want to build clauses into contracts for these rooms that require they are nonrefundable, guarantee a certain number of rooms, and so forth.
Consider leveraging OTAs for exposure to potential guests who are unfamiliar with your market but will be traveling in for events. Factor in the number of rooms you are allotting the OTA, which room types, and at what price. Acknowledge that the seemingly costly commissions are the price of acquiring a customer who would otherwise not find your hotel.
Prepare for the mass exodus
As much as you might think that visitors for your big event might want to hang around and enjoy the sights of the city after the event ends, they won’t. Over 100,000 passengers are expected to be flying out of Atlanta Hartsfield-Jackson Airport on Monday. This could leave you with a big occupancy hole come Monday night and even into Tuesday – plan ahead and devise a strategy for driving business early the following week, via groups, promotions, or otherwise, as this may be just as crucial to your revenue performance as what happens over event weekend itself. Alternatively, be prepared to give your hard-working staff some well-deserved time off after a hectic weekend.
Studies have shown that Airbnb and other home-sharing supply tends to swell around events, driven by owners who also are looking to make a nice buck, many of them purposely escaping town for the weekend to avoid the madness. As a result, Airbnb can steal a chunk of demand away from hotels during such periods. When planning for large events in your market you’ll want to consider Airbnb pricing in addition to the hotel competitors in your market. We’ve compiled some tips that may be helpful to combat pressure from the “sharing economy.”
- Have a strategy for hosting small groups of people that need multiple rooms and would typically look for a multi-room option on Airbnb
- Leverage your marketing teams if you’ve planned any packages surrounding the event such as transportation or food and beverage
5. Trust Your Systems
Events around your hotel that produce high demand are great for your property’s occupancy and profits, but how does it fare for the sanity of your revenue managers? We know that high-demand times can be some of the most stressful. Rely on your systems to help you quickly react to sudden changes or spikes in bookings, look at historical data to help plan for what’s to come and shop how your competitors are pricing during these peak times. Revenue Management systems and their underlying science inform and guide revenue managers, enabling them to price more accurately and receive information more quickly, in turn leading to more educated and effective revenue decisions.
We understand preparing a pricing strategy for events as big as the Super Bowl can be stressful, but hotels are sure to see benefits from the influx of demand. Atlanta area hotels are estimated to see up to $33 Million in revenue over the course of this week. Keep these tips in mind when creating your pricing strategy for forecasted events in your area and you’ll achieve maximum revenue potential.
Learn more about forecasting demand and increasing occupancy when demand isn’t as high with Rainmaker’s new eBook with Cvent &Social Tables: Innovative Forecasting & Demand Growth Strategies for Fueling Hotel Bookings.