Danielle Hess, Hotel News Now
Read the story at: Hotel News Now
Hoteliers in the San Francisco area are expecting high occupancy for Super Bowl weekend, but it’s still unclear how that will translate in revenue.
SAN FRANCISCO—Hoteliers in San Francisco and surrounding areas are gearing up to accommodate millions of football fans spending this weekend in northern California for Super Bowl 50, but it is still unclear how much of a revenue driver the event will ultimately be.
Football fans from around the country started pouring into the area on Thursday, driving occupancy rates higher, according to Fairmont San Francisco’s GM, Tom Klein.
“Once the Super Bowl city was announced as San Francisco, it wasn’t too far after that when we started getting blocks through the NFL,” Klein said, adding that his hotel is “sold out” for the weekend leading up to the big game.
Hotels in the greater Santa Clara area, including those around San Francisco and San Jose (totaling 216 hotels and more than 52,000 rooms), are seeing significant increases in demand and commanding increases in rates, according to forward-looking data from TravelClick.
From 4 February through 8 February 2016, overall committed occupancy is up 11% and average daily rates have increased 90% year over year, according to the data. The majority of this demand is being driven by corporate and group business, while transient bookings are softer.
High competition, low expectations
Mike Depatie, managing partner of KHP Capital Partners—which owns The Kimpton Buchanan in the San Francisco area—said some hoteliers will be disappointed by their numbers at the end of Super Bowl weekend.
“Like a lot of these events, the anticipation is not always as good as reality sometimes for hotels,” Depatie said. “Everybody has really high rates with minimum stays, and then there ends up being a number of rooms available at the last minute that they couldn’t sell out.”
Given the number of people staying in the San Francisco area over the weekend, it's inevitable that some travelers are looking to sharing-economy sites such as Airbnb, Klein said.
“Airbnb is certainly in the market in San Francisco. … It pretty much started here,” Klein said. “They are being absorbed, and anytime you have that type of absorption, that does impact the hotel business.
“But for the three days leading up to the Super Bowl, most hotels in the city will be in the high (90%) or sold out. So I think there is certainly space for Airbnb, and it certainly does help in finding accommodation for those who are coming to watch the Super Bowl.”
While Airbnb might not have a noticeable effect on occupancy, Depatie believes it could chip away at hoteliers’ pricing power.
“My sense is that the sharing economy will put a dampening effect on the room rates that hotels can charge for the Super Bowl,” Depatie said. “There’s a lot of people here in town, and there are a lot of Airbnb units available.
“It used to be that that kind of compression from a big event would really drive up room rates, but I think we are going to see less compression because of the fact that there are so many Airbnb units on the market,” he said.
Preparing for the rush
David von Winckler, director of operations for Kimpton Hotels & Restaurants in San Francisco, said the Sir Francis Drake Hotel is mostly reserved by groups for a minimum four-night stay, and is expecting 100% occupancy for Super Bowl weekend. He said Kimpton properties in the area are prepared to take care of a many guests because they’ve accommodated large amounts of guests for conferences in the past.
“Overall, whether it’s Super Bowl weekend or a regular day in San Francisco, our team prepares the exact same way: We provide highly personalized service, and all of our unique Kimpton amenities that our guests know and love,” von Winckler said. “We know we have a lot of eyes on us this week and are excited to show the world what we do.”
Klein said his hotel’s Super Bowl preparations included setting up travel arrangements for guests and coordinating with local law enforcement.
“From a preparation standpoint, we think about the logistics of moving this many people to and from the Super Bowl,” Klein said. “There are about 260 buses. They’re going to be transporting people to and from the stadium in Santa Clara, in a city that’s just as compressed as San Francisco.
“That does strain the infrastructure from a traffic movement standpoint, but between the local police and the highway patrol, they’ve got a very good plan that we’ve been in discussions with them on over the last two weeks.”