NASHVILLE, Tennessee — Events such as concerts, conferences and sports can all net significant amounts of visitors to a given hotel, but each one can generate different levels of travel intent.
In order for hoteliers to properly prepare and capture the most demand possible, they need to identify the specific kind of traveler coming to their city rather than the sheer quantity of potential guests.
Nick Seaman, hospitality forecaster at STR, said the industry should challenge its preconceived notions about events and focus on forecasting human behavior rather than the events themselves.
"We've been conditioned to believe that event attendance equals hotel demand, but really it doesn't," he said during "The Event Effect" session at the recent Hotel Data Conference. "It only tells you [how many are] coming, and that doesn't really matter."
Seaman broke down event travelers into three categories: the pilgrim, the professional and the tourist.
Each traveler group behaves differently than the others. Knowing which group is correlated to certain events can help inform how hotel demand is likely to shape up.
"A World Cup and Super Bowl attendee, they behave differently than a conference attendee, who behaves differently than a concert attendee," he said. "What I find matters is how far people are willing to travel, how long they stay, how early they book, and how much they're willing to pay and who's paying the bill."
The pilgrim
Pilgrims travel to an event because they feel an emotional weight around the occasion. Think about die-hard fans who are following a team to the Super Bowl, or players to a World Cup. These types of travelers are "willing to pay whatever it takes" and are experience-heavy, he said.
This strong desire gives hoteliers pricing power.
"The thing to remember about the pilgrim is it's all about that emotional connection to the event," Seaman said. "That's what drives the will and the willingness to pay such high premiums."
The latest Super Bowl in Santa Clara, California, boosted average daily rate by 260% and occupancy by 71% in the San Francisco market.
"They're not just buying a ticket to the event; they're buying an experience, a journey, a lifetime bucket-list thing, and that creates tons of pricing power because you've got people willing to pay whatever they want and can to see these events," Seaman said. "And you get a bunch of them all at one time with something exciting like NFL football and the championship of that league."
The demand build-up for these travelers starts to show about a week before the start of the event as practice and media events begin. ADR typically skyrockets a few nights out from an event before tailing off the night after.
"So we should be asking, how deeply do people care about being there? What are they willing to travel for? How many nights are they likely going to stay, and how much are they willing to pay to access the experience?" he said. "These events don't just fill rooms, but they change the way of how much you can charge for a room."
Pilgrims' booking windows tend to be sporadic given the emotional nature of their travel, Seaman said.
"They're making decisions based off the excitement as it happens, well before they get to their hotel room," he said.
Robert Morse, vice president of revenue management, hotels and resorts at Davidson Hospitality Group, said for an event such as the Super Bowl, hoteliers see waves of bookings and cancellations in the months leading up to the game.
"It's the way it just is. There's a lot of speculation, especially for the Super Bowl, and you've got these fans that are super passionate," he said.
The professional
Professionals are going to corporate events or conferences that they are required to attend for their jobs. Again, these travelers — or their employers, to be more precise — will pay whatever it takes to book a room for these trips, but they are in and out of a market depending on the start and end date of their event.
Unlike pilgrims, there's no emotional tie to the booking behavior of professionals.
"If you sign up to be at a conference, you're going to be there on other people's money all at one time and get to that incredible compression ... with extremely high premiums, and that's because you're going to be there," Seaman said. "You're there for the event, and you have to be there. There's really no choice. It's a functional choice."
Pricing sensitivity is what sets this kind of traveler apart from a leisure-driven event.
"If everyone's expected to be there on Wednesday for the start of the event on other people's money, that's low price sensitivity, and that creates pricing power," he said.
Booking windows are more consistent for professional travelers compared to the other classifications. Once a professional is tasked with attending a conference, they'll book their travel and are unlikely to cancel. Occupancy on the books steadily grows in the months leading up to the event.
The tourist
Tourists, those who are traveling for a leisure event such as a concert, lean more on the transient side of the equation. They tend to look for whatever lodging option is the most convenient for them and have the shortest length of stay among the three classifications.
Seaman said the hotels see a boost from these events on the day of, but there's not a ton of buildup prior to or after the event.
"For the most part, you can see the impact happens the day of the event. They're in and they're out," he said. "It's never about how many people are coming, but it's who needs a hotel room, and it's really that simple."
The location of the leisure event can be crucial when determining these travelers' booking habits, he said. For example, a concert in Nashville is likely to net more tourists than one in East Rutherford, New Jersey, since tours generally reach more Northeastern markets.
A significant portion of tourist travelers wait until about a week ahead of the event to book their hotel stays.
"When you're looking at the event asking, 'Is this a tourist event?' You're not going to know until a week out, really," he said.
Booking pace didn't show up until a couple of weeks out even for a mega-concert such as Taylor Swift's "Eras Tour" from a few years ago, Morse said.
"It was really like 12 days out that all of a sudden we saw that surge," he said. "We didn't drop pricing based on history in the first couple of concerts, but ... GMs were getting anxious, nervous [about demand] not coming in."