Hoteliers manage demand, rate around NBA, NHL playoffs
 
Hoteliers manage demand, rate around NBA, NHL playoffs
06 JUNE 2019 8:25 AM

Although the NBA and NHL playoffs are coming to an end, hotel companies with properties in markets where teams have enjoyed long playoff runs have similarly enjoyed high demand on game nights.

REPORT FROM THE U.S.—The economic impact of a professional sports team is huge on its market, and even more so when the team’s success in the regular season punches its ticket to the postseason.

Playoff games are big generators of hotel demand, too, which gives hotels in those host markets a boost to begin the busy summer season. The NBA playoffs began in mid-April and will conclude with the remaining games of the NBA Finals best-of-seven series between the Toronto Raptors and Golden State Warriors, which stands at 2-1 in favor of the Raptors heading into Friday’s Game 4 in Oakland, California. The NHL’s best-of-seven Stanley Cup Finals is currently tied at two games apiece between St. Louis Blues and Boston Bruins heading into Thursday’s Game 5 in Boston.

Bertrand Mangeot, GM of the Kimpton Saint George in Toronto, said his property has seen a noticeable benefit from Raptors home games throughout the NBA postseason.

“We have seen compression within the downtown market for home games held at the (Raptors’ venue) Scotiabank Arena,” Mangeot said in an email interview. “Toronto is already a busy city for business and leisure travel; add in media and out-of-town fans to the mix and you have a great recipe for high demand.”

Marcus Hotels & Resorts has three hotels in Milwaukee, the home of the Bucks, who were eliminated by the Raptors in the Eastern Conference Finals. Linda Gulrajani, Marcus’ VP of revenue strategy and distribution, said via email that the company’s hotels saw increased demand throughout the Bucks’ playoff run, which was historic in its own right.

“We have seen very strong demand starting with the first game,” Gulrajani said. “We have a new arena (Fiserv Forum), new entertainment venues, new owners and we haven’t made it past the first round of the playoffs since 2001, which has created a lot of excitement around the Bucks making the playoffs. Weekend game demand has been stronger than weekday, but both have created compression in the market.”

Pebblebrook Hotel Trust has 12 hotels in San Francisco, but EVP and CFO Ray Martz said in an email interview that the properties are a bit too far from the Warriors’ Oracle Arena across the bay in Oakland. But with the Warriors’ recent championships (2015, 2017, 2018) and fourth consecutive NBA finals berth this season, Martz said he’s excited for the team’s move to a new arena in San Francisco for the 2019-2020 season.

“When the Warriors relocate to the Chase Center in downtown San Francisco next season, this will have a more direct benefit on the San Francisco hotels and should add yet another demand driver to market that’s already on fire with the strong business, convention and leisure demand in San Francisco,” Martz said. “So let’s hope the Warriors continue their playoff run next year.”

The Pfister Hotel in Milwaukee benefited from additional demand during the Bucks’ NBA playoff run, which ended in the Eastern Conference Finals. (Photo: Marcus Hotels & Resorts)

Playoff revenue strategy
Marcus’ Milwaukee hotels—including The Pfister Hotel, a 307-guestroom property—earned increased group business during the Bucks’ eight home playoff games.

“Many of the teams stay with us, so they are our first priority,” she said. “We have a long-term relationship with many of the teams and want to make sure we take care of them, even if it means losing out on some higher-rated business. We have also seen group requests for media, fans, family, etc. that are coming in for the games.”

Gulrajani said beyond group business, Marcus’ Milwaukee properties received a mix of leisure business from online travel agencies and direct channels. She added the revenue-management team discussed how far out in advance to save room blocks in case the Bucks advanced to the Finals.

“For us, the largest strategy conversation is actually around how far out do we protect rooms for the teams and media, how many people might we have to relocate and when will the games be?” Gulrajani said. “For the first rounds of the playoffs, the game dates may change depending on if a team wins in four games or seven, so there are many different scenarios at play. We use the data we have, look at the odds of each scenario and price accordingly and adjust after each game.”

Ron Alfera, regional director of revenue management at Hersha Hospitality Management, said in an email interview that Hersha’s Boston properties have seen increased demand during the Bruins’ Stanley Cup run. One of its hotels, The Boxer, sits just one block away from TD Garden, the Bruins’ home arena, which will host its 12th Bruins playoff game Thursday night.

While bookings on game nights have come from a mix of direct channels and OTAs, Alfera said Hersha has been able to increase direct bookings via special promotions. In terms of pricing strategy, he said it’s best to take a proactive approach.

“It has been a very tight window to set strategy as the opportunity only exists if the Bruins keep winning,” Alfera said. “And the next game after a win is only a few days in advance. So it’s important to hedge and set the hotel’s rate strategy appropriately in anticipation of a high-demand game day. If there is no ‘next game,’ then we must quickly reset strategy.”

The 188-room Kimpton Saint George in Toronto has seen increased demand throughout the NBA playoffs as the Raptors have advanced to the NBA Finals. (Photo: Naomi Finlay for Kimpton Saint George)

The Kimpton Saint George has seen the most bookings during the NBA playoffs from direct channels, Mangeot said.

“Bookings come through various channels as transient guests are savvy buyers and like to shop around,” he said. “The majority of our bookings do come through our brand website, though.”

Additionally, guests have turned game nights into multiday trips and staycations, Mangeot said.

“We see out-of-town guests create staycations that include the game night and beyond, choosing to stay multiple nights and take advantage of everything Toronto has to offer,” he said. “In terms of revenue strategies, it is the same as always: analyzing supply and demand and understanding buying trends that reflect and mirror the guests’ value expectations.”

Mangeot described Kimpton Saint George staff members as Raptors fans at heart, and they’ve even wagered a friendly bet with staffs of the Kimpton Sir Francis Drake and the Kimpton Buchanan Hotel in San Francisco. Should the Raptors defeat the Warriors, both San Francisco properties must serve Ontario wine and maple desserts at their evening wine hours with employees in full Raptors gear, and Kimpton SVP of Operations Nick Gregory must wear an inflatable dinosaur costume.

If the Warriors win, the Kimpton Saint George team must wear Warriors gear the first Saturday after the series wraps up and Mangeot must keep a Warriors coffee mug on his desk for daily use.

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