Super Bowl LI proves a boost for Houston hotel rates

(This weekend the Patriots take on the Falcons in the biggest football game of the year, but hotels in Houston stand to win either way.)

This weekend’s Super Bowl LI is bound to produce winners and losers—the outcome of the game notwithstanding. With citywide events scheduled around the game, Visit Houston reports that the 10-day event is expected to have a $350-million net economic impact on the nation’s fourth-largest city and attract 140,000 out-of-town visitors. 

According to a report prepared by Baltimore-based Rockport Analytics for the Houston Super Bowl Host Committee, the city’s hotel industry will benefit from nearly $79 million of that total as the culmination of the football season will generate an approximate 422,000 overnight stays, an estimated 262,000 of which will have an average daily room rate of $300. The city’s hotel industry, comprised of about 84,000 rooms, including the new 1,000-room Marriott Marquis that serves as the official NFL headquarters hotel, still has rooms available and has, in fact, experienced peaks and troughs in booking patterns, particularly since Dallas lost in the playoffs in mid-January. 

Erratic Booking Patterns

“The biggest surprise we saw was the number of cancellations following Dallas’s division playoff loss,” said Heather Hickman, Houston market manager for Expedia. “Based on market proximity, a lot of Dallas fans booked early with the hopes of a Cowboys Super Bowl. Those cancellations went through the roof on January 15 to 16, immediately after Dallas lost the division playoffs.”

However, Hickman also stated that there was an even bigger spike in bookings once it was determined that the Atlanta Falcons would be playing the New England Patriots. That was certainly the case at the 312-room Hotel Derek, where a group cancelled its 10 rooms after the Cowboys lost, only for another to book that same room block when the Patriots won.

“That’s an indication of the demand,” said Stephanie Summerall, director of sales and marketing at the Hotel Derek. Otherwise, the property, which is located near the Galleria and part of Destination Hotels, has been fully booked for Super Bowl weekend for nearly a year and Summerall also noted that most of those bookings have been made at rack rates. “It’s our ADR that’s grown substantially; it’s in excess of $500 during Super Bowl weekend and the main driver for that has really been our 26 suites,” she said.

ADR Increases

At the 266-room Hotel Sorella CityCentre, situated in the city’s Energy Quarter, occupancy for game weekend has been at 100 percent for the last six months. “Nightly rates for the weekend were anywhere from $600 to $2,500 for our 22 penthouse suites,” said Nancy Alonzo, director of sales and marketing at the property. “When our rates are four times what they are normally, we’re doing very well.”

The spike in ADR should be citywide phenomena this coming weekend, as it was for Super Bowl host cities in 2016 and 2015. As per Expedia data, San Francisco’s ADR increased more than 100 percent year-over-year on game day 2016, and in 2015 Phoenix ADR spiked more than 200 percent year-over-year on Super Bowl Sunday. However, Expedia’s data also found that year-on-year searches for pre-game Saturday 2017 increased over 500 percent from 2016.

Concentrations of Reservations

Even twenty-five miles north of downtown Houston, The Woodlands’ three hotels—a 302-room Westin, a 205-room Embassy Suites and the 406-room Woodlands Resort & Conference Center—are also sold out, commanding a premium for room nights as well as a required Friday night stay.

“Rooms that typically sell for $250 a night were booked at about $500 nightly,” said Greg Parsons, VP of hospitality for The Woodlands Development Co. “We had more demand for standard rooms than for suites, but as downtown hotels filled up, we saw demand push out to The Woodlands.”

Bookings are indeed heavier near downtown Houston and the city’s airports, according to Expedia data. Yet while The Woodlands opted to rely on the natural demand driven by the event rather than launch any specific marketing initiatives, and the Hotel Sorella was about to attract groups that stayed at Hotel Valencia Santana Row, its sister property in San Jose, during last year’s Super Bowl, Expedia continues to work with Houston hotel partners to bring in bookings.

“We’re seeing some interesting hotel booking trends, and are working closely with our partners to ensure they maximize their hotel offerings for this weekend,” Hickman said. “One interesting development is the value add promotions we’re seeing for free drinks and late checkouts, to appeal to the sports-loving crowd.”

Competition from Home Rentals

But not everyone heading to Houston this weekend is looking for a bargain. Home rental site HomeAway reported a 350-percent increase in year-over-year Houston home listings for Super Bowl weekend. Roughly 350 Houston homes were available for rent on the site, with nightly rates averaging about $1,850 per night, and a few listed upwards of $10,000 nightly.

Parsons doesn’t believe the home rental sector had any bearing on The Woodlands’ business. “There was no impact because we sold out,” he said. Summerall was likeminded, further adding that the home rental client isn’t necessarily the same as the entertainment VIPs and clients of corporate sponsors who are staying at the Hotel Derek this weekend, in part for hotel services like security, pre-arranged culinary experiences to meet specific guest requests and basics such as shoe polishing and laundry service.

“With the amenities and services that this level of client requires, it would be difficult to facilitate a private home stay,” she said.