Vacation rental managers are well acquainted with events being revenue catalysts. Sporting events especially have the power to completely disrupt a market, absorbing vast amounts of availability and catapulting ADRs. Through its duration, the 2018 football world cup is said to have more than doubled short term rental income (109% increase) in Russia, while supply was up 127% from the previous year, and the 2019 UEFA Champions League final alone caused a 2.5x increase in Madrid’s ADR.
This February and March European eyes will turn to the 2020 6 Nations rugby tournament, with matches hosted in each participant city – Cardiff, Dublin, Edinburgh, London, Paris & Rome.
We have analysed the effects of these matches on the host cities’ advertised rates, occupancy and crucially, demand. However, we’ve seen that the impact varies greatly from city to city. So which market has increased its rates by 42%? Which main tourist destination is experiencing a 29% boost in demand? But most critically – is your strategy aligned with your market’s reality? First we look at the larger cities, which are harder to impact, and understand how professional property managers are handling the tournament.
A note on methodology – For reference in all graphs we have highlighted (in aqua/green) the specific dates of matches hosted in that particular city. However, as matches are on Saturdays or Sundays, we have seen that Friday and Saturday nights of the weekends in question are consistently affected. Therefore, when reading the graphs it is worth considering the whole match weekends, and all calculations mentioned compare data from those weekends of hosted matches against data from the other weekends. Calculations are made using data from professionally managed listings only.
In our first chart (above) we can see occupancy vs. availability for London over the tournament period. It shows us that matches seem to have had no discernible impact on occupancy so far. Running the calculations, we found that those weekends actually sit 6% lower on average, mainly due to larger peaks for valentine’s day weekend and the preceding weekends that have passed their peak booking window.
Our second graph sees a similar story, with the number of listings unavailable across the tournament dates versus a week ago. Demand for match weekends in London appears significantly lower than the preceding weekends. As with occupancy, at the time of writing, these closer dates have been through their peak booking window, while the match weekends have not, which goes some way to explaining the difference. We can conclude however, that the matches have so far had negligible impact on London occupancy and demand.
Interestingly, while occupancy and demand currently sit decidedly lower on match weekends, professional PMs are pricing the dates 1% higher. With London generally accepted as Europe’s main business hub, a shorter booking window is to be expected. As a result, demand for the matches may no be quite as depressed as it seems, and holding out with higher pricing may pay off. On a more general note, we can see that the overall trends of demand and pricing in London are at odds – PMs could likely sustain higher prices closer to check in date given the strong demand.
The above allows us to visualise a 9% lift in occupancy on match weekends in Paris. With the first 2 matches on Sundays, we can see a more of a rise on the Saturday proceeding it. The below meanwhile shows that there is negligible difference in Parisian ADR, in fact it is 2% lower. The first two weekends show small Saturday peaks relative to surrounding dates, while the final match on the tournament’s closing day sees a significant spike. However, we also see big increases on other dates, including Valentine’s Day, Carnaval de Paris on 23rd Feb plus various concerts in the capital.
Interestingly, while prices are slightly lower on match weekends, We can see from the below chart that demand over these weekends is in fact heightened. The weekends of 2 Feb, 9 Feb and 14 March show a 29% average hike in demand over the regular weekends.
In a city with over 68k listings and many other things going on, it takes a lot of interest to move the market. However, increased occupancy and significantly more properties being booked on match weekends suggests that PMs should be elevating their rates – especially considering that match weekends are currently priced 2% lower than regular weekends.
Match weekends in Rome are recording a comfortable 11% more occupancy than regular weekends throughout the course of the competition – a healthy inflation given Rome’s size.
Our penultimate graph shows rates through the tournament in the Italian capital. Curiously, rates on 22nd Feb are considerably lower than the March match. 14 March is the final weekend of the tournament so that may contribute, but there is a more general surge in pricing from the start of March. March is the beginning of Rome’s shoulder season, where occupancy begins to pick up, and so it seems that professional PMs raise their base rates to coincide with this. Both matches do sit at rate peaks however, and are enjoying a 4% growth on regular weekends.
Our last chart is very interesting when considered alongside Rome’s rates. While rates are increased 4% on average for match weekends, demand is down 8%. Again, booking window will be impacting demand and this should pick up through the coming weeks, but the general pricing trend, as with London, seems to conflict with demand. The data suggests that lower rates now should attract the existing demand while, with demand still so strong for February, prices could be stronger also.
Dealing with 3 such big cities, whose supplies average 73,000 listings, home to so many internationally attractive events and a year-round baseline of tourism, it takes a lot of movement to forge a market-wide trend. Impact from any event is a tall order but, for property managers operating in these cities, it is important to analyse the effects and tailor revenue management strategy accordingly. For example, matching a date’s price with the demand it is experiencing and the existing occupancy. To find out how market intelligence can serve you with these insights, book a free demo for our dashboard at the button below.
We chose to analyse these big immovable European tourist capitals first as they paint a different story from our remaining 3 destinations. Edinburgh, and Cardiff and Dublin in particular, are big Rugby cities. In addition to this, with supplies around 8 times smaller (~9000) than the 3 above markets, events such as these have a huge capacity to impact. Part two should be interesting!