Unlocking the Revenue Potential of Playoff Games: Insights for Hotel Revenue Managers

In this webinar hosted by Lighthouse experts Blake Reiter and Daniel Foreman, the team explored the question: What’s a playoff win really worth to your bottom line?

Their data-driven insights reveal how hotel revenue managers can capitalize on the ripple effects of major sporting events to boost pricing power and increase occupancy.

Read on for a breakdown of their key findings and actionable strategies, and to dig deeper into the data, click below to download the slides!

Playoff Dynamics That Impact Hotel Pricing

When it comes to playoff games, several factors drive fluctuations in hotel demand and pricing:

1. Fan Base Travel Tendencies: Some teams boast traveling fanbases willing to journey long distances to attend games. Revenue managers should anticipate heightened demand when these teams are involved.

2. Proximity to the Venue: Hotels closer to the stadium often see greater demand. Conversely, in markets like San Francisco, where the "local" team’s games are held hours away, more distant hotels might underperform.

3. Playoff Round & Opponent Strength: Later-stage games (e.g., finals) and matches against high-profile opponents (think marquee matchups or games involving celebrities like Taylor Swift attending) generate higher pricing opportunities.

4. Timing Between Games: Sports like baseball, with closely scheduled playoff games, are subject to swings in pricing based on series momentum. In contrast, longer intervals between football games give travelers time to book further in advance.

5. Game Results: Blowouts can discourage travel for subsequent games, while tight series can drive last-minute bookings.

Real-World Examples: Maximizing Playoff Opportunities

NFL Case Studies:

• Detroit Lions vs. Tampa Bay Buccaneers: A win by the Green Bay Packers gave the Detroit Lions an unexpected home game, leading hotel prices to surge from $113 to $132 overnight. This demonstrates the importance of tracking the outcome of other games, even if they don’t directly involve your local team.
  
  Key Takeaway: Revenue managers should stay informed about playoff scenarios and use dynamic pricing to adjust as demand materializes.

• Baltimore Ravens’ 2024 Playoff Run: Despite clinching a playoff spot weeks earlier, pricing for the Ravens Texans matchup only spiked after the opponent was finalized. Then, prices rose 45%, jumping from $132 to $194 after the Ravens secured a match against the Chiefs, a strong team with a traveling fanbase and additional buzz from NFL star Travis Kelce’s relationship with Taylor Swift.
  
  Key Takeaway: Leverage the strength of the opponent and external factors like media buzz to justify price increases.

Baseball Pricing Trends

In baseball’s multi-game series, hotel pricing often mirrors the emotional highs and lows of fans:

• Phillies vs. Diamondbacks (NLCS, Game 6): Pricing power depended on whether fans believed a sixth game would even occur. Prices fell after a decisive Game 2 win as Phillies fans expected to sweep in four games, but rebounded once the Diamondbacks came roaring back and it became clear a Game 6 was guaranteed.
  
  Key Takeaway: Adjust pricing dynamically based on the likelihood of additional games, ensuring rates remain competitive yet opportunistic.

• Dodgers vs. Yankees (World Series): A 3-0 lead by the Dodgers led to plummeting demand for Games 6 and 7, neither of which ultimately happened. Revenue managers in Los Angeles weren’t able to capitalize on what could have been 2 very high-value nights due to the lopsided World Series ending in only five games.
  
  Key Takeaway: Monitor series outcomes closely and prepare for scenarios where games might not happen, balancing premium rates with base demand preservation.

International Insights: Champions League

In global sports like Champions League soccer, game results and geographic factors heavily influence hotel demand:

• Matches with tied first legs (e.g., Manchester United vs. PSG) saw significant hotel price increases for the second leg, as fans anticipated a decisive match.

• Conversely, blowouts like Real Madrid’s dominance over Liverpool led to muted pricing power for the second leg, as fans were less motivated to travel due to the dim prospect of their team mounting a comeback.

Pro Tip: Revenue managers should analyze likelihood of the opponent’s team to travel, how lopsided or close the series is and potential travel deterrents like weather to fine-tune pricing.

Strategies for Success: Actionable Tips

1. Track and React to Events in Real-Time: Stay informed about game outcomes, travel patterns and fan behavior. This allows you to adjust rates dynamically and capture demand peaks.

2. Leverage Forward-Looking Data: Use tools like Market Insight to monitor market trends and identify opportunities well in advance of game announcements.

3. Understand Market Nuances: Not all games are created equal. Consider proximity, seasonal demand and external buzz when setting rates.

4. Preserve Base Demand: Avoid alienating non-sports guests by overpricing rooms too early. Balance strategic price increases with the need to maintain steady occupancy.

Utilize Storylines to Your Advantage: Celebrity appearances or underdog narratives can create additional excitement—and demand.

Final Thoughts

Playoff games offer hotel revenue managers unique opportunities to boost revenue, but capitalizing on them requires agility and strategy. By understanding the interplay of fan travel, market dynamics and game outcomes, hoteliers can position themselves to win big, regardless of the scoreboard.