With performers like Lady Gaga and U2, Coachella is hot for hotels in Southern California's desert

Coachella 2017 featured artists Lady Gaga, Radiohead and Kendrick Lamar. (Coachella 2017 featured Lady Gaga, Radiohead and Kendrick Lamar)

Festival season is in full swing in Southern California, where Lady Gaga headlined at this past weekend’s Coachella Valley Music & Arts Festival in Indio, Calif. The pop star is also shooting scenes for her upcoming film "A Star is Born," alongside co-star Bradley Cooper, at the festival, held on the grounds of the Empire Polo Club.

Additional acts, such as indie folk band Bon Iver, Icelandic band Kaleo, hip-hop artist Kendrick Lamar and U2, comprise the event line-up, which carries over into the coming weekend and this year. Event organizer Goldenvoice added 20 acres to the festival site and received permission from city officials to boost capacity from 99,000 to 125,000 people. It comes as no surprise, then, that Coachella 2017 is poised to become the most successful in the event’s 18-year-history by StubHub ticket sales. Year-over-year tickets sales have grown steadily, with total ticket demand for the first weekend up 60 percent over last year and international ticket sales up 125 percent from last year.


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Cashing In on Coachella

Followed by Stagecoach, the Coachella Valley’s annual country music festival that runs the weekend after Coachella ends, April means peak business for Palm Springs and Coachella Valley hotels. According to Expedia internal data, area hotels benefit from the highest ADR of the year in April, with a 2016 average of $280 that to date has climbed to $340 for April 2017.

“April always leads the entire year for Coachella Valley hotels, from an ADR and Expedia travel demand perspective, thanks to the crowds brought in by Coachella and Stagecoach,” said La Neisha Young, Expedia’s Palm Springs market manager. The tech giant’s data additionally show that occupancy for Palm Springs and Coachella Valley hotels soars to more than 90 percent in April.

Young also points out that hotels can further leverage high occupancies and ADRs by bolstering services and amenities to maximize sales with value-add offerings as well as carefully structured restrictions that won’t limit appeal or reach; four-night requirements can limit bookings given that festival-goers typically book hotel stays for two to three nights. She also suggested hotels offer shuttle service to festival events as parking is limited and traffic is heavy as well as late checkouts on Sunday and Monday when occupancy drops.

The On-Property Festival Experience  

Some area hotels already have a more comprehensive selling strategy in place to lure Coachella attendees. This year, the Miramonte Indian Wells Resort & Spa, part of Destination Hotels, introduced a bevy of ancillary offerings ranging from a Coachella weekend package, including sunscreen and a collapsible water bottle, to live DJ pool parties, a Mixology Clothing fashion show and pop-up store and a late-night dining menu created specifically for Coachella 2017 and featuring Pedialyte popsicles and a tuna poke sushi burrito that marries hot Cheetos with pickled daikon.

Historically, business at the resort has been anything but slow during festival season. Katie Fletcher, marketing and eCommerce manager, noted that bookings start coming in as soon as tickets go on sale and the pace only picks up once the entertainment lineup is announced. “The demand is there and people flock to the valley for the festivals,” said Fletcher. “We are trying to craft an exclusive experience to position Miramonte as the preeminent place to be for festival accommodations," she said, noting add-ons such as simple flash tattoos to IV hangover cures. "Our added amenities help guests extend their concert experience before and after attending the festival," she said.

Palm Springs Hot With Hotel Development

According to Scott White, president and CEO of the Greater Palm Springs CVB, the Coachella Music Festivals, in April, drive the highest occupancy and rate for area hotels, along with the BNP Paribas Tennis Tournament in March. “Events are critical to the destination and drive both occupancy and rate,” he said. “But more importantly, they have attracted new investors, new audiences and greater visibility, while also increasing the destination’s appeal.”

The Coachella Valley Economic Partnership and Greater Palm Springs CVB projected the three consecutive weekends will generate upwards of $700 million in economic activity in 2016 and if new openings are any indication, the hotel industry has been taking note. A new Kimpton hotel will open in downtown Palm Springs this August, while Hotel Paseo, an Autograph Collection property, will open later this year in Palm Desert. In 2019, Montage International will debut two hotels: the 140-room Montage La Quinta and the 200-room Pendry La Quinta, in the SilverRock resort project. “These types of hotels align very well with these events and the travelers now coming to Greater Palm Springs,” said White.