How the UEFA Champions League Final Impacted Madrid Hotel Profits
By David Eisen, Director of Hotel Intelligence and Customer Solutions for HotStats
Hosting a premier sporting event isn't just a mark of stature—it can be a boon for the city's hotel industry.
In Europe, where football is king, playing host to a UEFA Champions League Final (a competition that decides the best football club in Europe) can rake in hotel profits that would have otherwise been absent. That was the case for this year's host city, Madrid, where the 2019 Final between Liverpool and London's Tottenham Hotspur was played on June 1 at Wanda Metropolitano Stadium.
All things being equal, findings suggest that key performance indicators are positively influenced by a large-scale sporting event, such as the FIFA World Cup, with RevPAR growth brought on by a surge in demand.
These one-off events are a boon for revenue managers, who are able to adjust rates in order to optimize revenues. This was the case in Madrid, leading up to the Champions League Final match. Estimates say that between 80,000 and 150,000 English football fans made the trip to the city, which created a swell of demand for lodging. So much so that it prompted airport officials to recommend that passengers bypass Madrid-Barajas Airport, in favor of Zaragoza or Valencia, since Madrid, which normally handles up to 3,000 passengers per hour, was expected to take in more than 6,000 per hour, causing lengthy delays.
Wanda Metropolitano Stadium, home to Atlético Madrid, is closer to the city's airport than Real Madrid's Santiago Bernabéu Stadium, located in downtown Madrid. And although as many as 150,000 fans made the trip, Wanda Metropolitano Stadium only holds around 68,000 people, meaning that many of the fans weren't even going to the game itself.
According to HotStats data, the Champions League Final boosted overall May numbers. The surge in demand helped fuel a 23.8% YOY increase in RevPAR, which was driven by a 16.9% increase in achieved average room rate to €190.40, Madrid's highest since June 2017. Occupancy checked in at 81.8%, 4.6 percentage points higher than at the same time last year.
Top-line growth, including a 6.6% jump in total F&B revenue on a per-available-room basis, contributed to a 19.1% YOY increase in TRevPAR to €210.36. All told, GOPPAR increased 34.4% to €99.46. Profit conversion at hotels in Madrid was recorded at 47.3% of total revenue for the month.
(Note: Data reflects the full month of May.)
Hotels weren't the only type of accommodation leveraging the Champions League Final to the hilt. Airbnb hosts were in on the fun, too. According to AirDNA, which tracks short-term rental data, rooms on Airbnb were going for as much as or more than £1,000 on and around the Final—like this one.
Data aside, mega-sporting events are good for a city's local economy—hospitality, retail, et al. (Another discussion can be had on the impacts of longer events such as the World Cup and the Olympics, which compel huge capital expense by the host city, and can actually have a negative long-term impact.)
Consider the be-all and end-all of sporting events, the Super Bowl: This year's big game was held in Atlanta, where there were reports of Motel 6 rooms going for as much as $1,000 per night! When economy hotels are generating rates higher than those of some luxury hotels, you know something special is going on.
In 2017, $31 billion was spent in the United States by travelers who spent at least one night attending or participating in a sporting event, according to market research firm Longwoods International.
Next year, the Champions League Final moves to Turkey, where the game will be held on May 30 at Atatürk Olympic Stadium in Istanbul. According to HotStats data, May 2019 GOPPAR in Istanbul clocked in at €31.52, which was 29.8% higher than it was at the same time last year. Average room rate came in at €105.76. If the trend holds true, Istanbul should see an even higher jump in its KPIs at the same time next year.
And, in case you missed it, Liverpool beat Tottenham Hotspur 2-0 this year to capture its sixth Champions League title. And while a team from England won the championship, Madrid had a victory of its own, and its trophy was euros.
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