NEW YORK—Super Bowl XLVIII, set for 2 February at MetLife Stadium in East Rutherford, New Jersey, will be an important event for the region’s hotel industry, although it probably won’t match the impact the game has had on previous host cities, said sources.
Less than two months before the game, some hotels in Manhattan and throughout the region, especially those closest to the venue, are either fully booked or close to it, while hotels in other parts of the city or surrounding areas still have availability. In part, it’s a matter of geography.
“New York is unlike any of the other markets that have hosted the game,” said Janis Milham, senior VP of Marriott International’s modern essentials and extended-stay brands. “Unlike New Orleans and Indianapolis, where the event absolutely took over the entire city and it was very difficult to get a room, there’s lots of inventory still available in New York.”
She said the Courtyard by Marriott at Herald Square and across from the Super Bowl Boulevard multi-media fan event is booked, while a Courtyard due to open in the next few weeks on Broadway near Central Park still has plenty of rooms.
As the official hotel chain of the National Football League, Courtyard has some special events planned at several of its New York hotels. During the season, seven Courtyards in NFL cities hosted tailgate parties for guests that featured appearances by football legends, prizes, and food and drinks. The Herald Square and Central Park hotels will host similar tailgates during Super Bowl weekend.
Executives at Hersha Hospitality Trust believe the game will have a significant impact on its portfolio of 19 hotels in the New York region. During a recent earnings call, Ashish Parikh, CFO and assistant secretary, told analysts he expects the event to boost the company’s revenue per available room.
“It could add anywhere between $8 and $9 to our New York City RevPAR and maybe $3 to $4 to the total portfolio RevPAR,” he said. “We are looking at an incremental (increase) of anywhere between $1.5 million and $1.75 million in revenues on a same-store basis.”
Steven M. Angel, principal of Fulcrum Hospitality, an asset management and advisory services firm that oversees several hotels in the market, believes the impact of the event will be more muted than some people anticipate.
“Nearly 20% of the teams that could be playing in the game are in drive-in cities. And much of the high-end demand for Super Bowl tickets is generated from the wealth in the New York region, and few of those people will be traveling to go to the game,” he said, adding that New York is the headquarters for many media outlets. “It all adds up to less demand than when the Super Bowl is held in some smaller markets, and the 140,000 or so hotel rooms in the region only accentuate this further.”
A soft time of year
The timing of the event in early February, typically a relatively slow period for travel to New York hotels, will help hotel performance, said Sean Hennessey, founder and CEO of Lodging Advisors, a New York-based consulting firm, and a Hotel News Now contributor.
“We anticipate occupancy levels for the impacted area will be up three to five percentage points over the course of the prime two-week period, and it should boost the month by at least three points,” he said. “We’ve also seen a lot of hotels that would not otherwise have any pricing power in February that are raising their prices steeply (for the Super Bowl).”
According to data from STR, parent company of HNN, occupancies in Manhattan hotels during the same weekend in 2013 averaged 70.3% on Saturday night and 54.8% on Sunday. In Brooklyn, occupancy was 79.3% on Saturday and 58.8% on Sunday.
Because the upcoming Super Bowl is the first held in the New York area, it’s difficult to accurately predict the event’s impact on the hotel industry. While admitting it’s not a perfect comparable, Hennessey said one way to measure a winter-time event in the city is to look at the impact the 2005 Central Park art installation The Gates had on hotel performance.
The event, which was held for 16 days in February of that year, helped to boost Manhattan occupancies to 80.4%, up 9.3% over the same month the previous year, according to STR. Similarly, ADR rose 11.1%, and RevPAR increased 21.4%.
The ability for hoteliers to significantly raise rates during Super Bowl weekend is another concern.
“The question is how much of a bump are the area hotels going to get?” said Carter Wilson, director of STR Analytics, a sister company of HNN. “New York and New Jersey probably won’t see much of a bump because their hotels likely run at higher occupancies and rates year round than many other Super Bowl locations, so it will be hard, for example, to triple their rates.”
Carter said he expects area hotels will be fully sold out on the day of the game, with rate premiums somewhere around 100% to 150% higher than the Sunday from the prior years. According to STR data, average daily rate for the same Sunday earlier this year was $189.78 in Manhattan, $142.39 in Brooklyn, $129.40 in Jersey City/Secaucus, New Jersey, and $83.04 in the Brunswick/Edison, New Jersey market.
Because of the anticipated crowds and media attention surrounding the game, some business and leisure travelers might avoid the region in the week or so before and after the event.
“While we’ll lose a little bit of the business marginally from people who defer their visits, that actually helps the city from a broader perspective,” said Warren Marr, managing director at PricewaterhouseCoopers. “Because January, February and March are by far the weakest months of the year, many of these travelers will push their meeting or visit a couple of weeks before or after (the Super Bowl), so the city will still be capturing the business.”