Fans in the stands: Sporting event impact on hotel performance in New Zealand and Australia
The global hotel industry has lost many demand generators due to the COVID-19 pandemic. One of those demand sources is sporting events and the large crowds they attract. While it will be some time before these gatherings return to their pre-pandemic levels, there is early evidence that sporting events will provide hotels with demand just as soon as fans can return to the stands.
On 30 August, Auckland moved to Alert Level 2 with extra restrictions that limited social gatherings to just 10 people, when just two months earlier, 43,000 fans filled Auckland’s Eden Park for the Super Rugby Aotearoa. A similar scene occurred in Adelaide, when the state government approved 2,000 fans to attend Showdown 48 at Adelaide Oval on 13 June—the same night as the opening weekend of Super Rugby Aotearoa. On 28 August, South Australia eased restrictions, allowing residential gatherings of up to 50 people.
he date of the events and the permitting of spectators were not the only factors these two cities had in common. Hotels in the two areas saw higher performance levels on the night of the events, showing how in-person events impact the data.
On 13 June, Auckland hotels saw an occupancy level of 65.1%, which was the market’s highest daily occupancy level since 14 March. The year-over-year percentage change was also noteworthy, as a 7.4% decline was the first single-digit decrease since 10 March. All other days had shown double-digit declines—in fact, the market had seen double-digit drops as bad as 70% since the start of the pandemic. The same occurrence was seen in revenue per available room (RevPAR), as the market saw its first single-digit decline in the metric since 10 March as well, reaching a level of NZD112.47. Average daily rate (ADR), on the other hand, increased 1.7% year over year to NZD172.81.
hen looking at Adelaide on the same night, performance was slightly different from what was seen in Auckland, as less fans were allowed at the event. While performance was higher than the previous Saturday (6 June), occupancy (35.4%) and RevPAR (AUD42.16) were the second-highest levels seen in the market since mid-March. ADR came in at AUD119.13, which was still higher than the rates seen throughout the pandemic.
So what does this mean for hoteliers? A current lack of fans in the stands has an impact on performance. Confidence builds when social activities are allowed—so when spectators can join in-person for their favorite sports, hoteliers can expect to see a nice boost in performance. Live sporting events in Auckland and Adelaide gave a taste of what we can anticipate in the future, and we hope to see this positive trend in the coming months when restrictions ultimately ease.