Evaluating the impact of mega-sporting events on hotel pricing strategies: the case of the 2014 FIFA World Cup

Abstract

Purpose-This study aims to examine the impact of a mega-sporting event "2014 FIFA World Cup" on hotel pricing strategies and performance. Design/methodology/approach-The present project examines the host regions' response to the 2014 FIFA World Cup which was established by the variance in the main hotel key performance indexes: occupancy, average daily rate, revenue per available room (RevPAR) and supply. Using data gathered from STR, this research distinctly shows how the Brazilian host regions reacted to the World Cup. Findings-Results suggest that the key performance indicators of Brazil's lodging sector reacted differently to the World Cup. Although all hosting cities experienced significant RevPAR growth because of the increase in hotel room rates during the event, the supply and occupancy performed differed from each city. Research limitations/implications-Research is limited to the case of hotel performance at the country level for mega-events. The study focused on the reaction of revenue managers in the Latin America context. Other contexts may generate different results. Practical implications-The study helps revenue managers to examine how the FIFA World Cup travel demand affected pricing strategies and revenue management practices in the Brazilian hotel sector in areas undergoing seasonal growths in overnight tourism. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events. Social implications-This study reveals that the benefits brought by a mega-event are not always translated into strong hotel revenue performance. This study highlights an important but understudied research area of revenue management pricing strategies and the effect of mega-sporting events in the hotel sector. This study contributes to the literature as one of the few investigations to benefit hotel pricing strategies and overall revenue performance. Originality/value-This study is one of the few studies about exploring the reaction of revenue managers during the execution of a mega-sporting event. The value of the present study lies in the fact that the authors extend previous studies examining the impact of the most important sporting event in the hotel industry at the country-level perspective. This study serves to inform hoteliers and practitioners about revenue management pricing strategies to improve hotel performance during mega-sporting events.

Geo-Tagged Social Media Data-Based Analytical Approach for Perceiving Impacts of Social Events

“…The case study based on the 2014 Shanghai stampede tragedy revealed why it happened, in what way in affected local citizens, and for how long. Compared with traditional sociological methods, the proposed approach combines the methods of social sensing, machine learning, and natural language processing and can thus facilitate efficient data acquisition and analysis [6][7][8][9][10][11][12][13][14][15][16][17]. Compared with some of the existing social network-based public opinion mining, this paper considers the dimensions of time and geo-space in observing the impact of social events in addition to sentiment analysis and opinion mining [19,20].…”

“…Using a social conflict analysis database, Moreno and Miguel analyzed the short-term causal impact of sports events on social unrest events in Africa [9]. Using case studies, Scholtens and Peenstra [10] and Barreda et al [11] analyzed the impact of sports events on the stock market and hotel industry, respectively. Regarding political aspects, Healy et al collected original survey data during basketball championships to study the impact of irrelevant events on voters' evaluations of government performance [12].…”

Short-term hotel room price effects of sporting events

“…As the accommodation capacity in the host country cannot be expanded at short notice, there is temporarily excess demand for accommodation and this in turn pushes accommodation prices upwards. As a rule, the demand for accommodation during the event period is inelastic for high-priced or high-quality room prices, indicating that travellers are willing to pay the higher prices during this specific period of time (Barreda et al, 2017).…”

“…Solberg and Preuss (2007) show that revenues per guest night (deflated by the consumer price index) in the year of the Sydney Olympics increased by 11%, but the trend is reversed thereafter. Barreda et al (2017) investigate the impact of FIFA World Cup (2014) on hotel prices (revenue per available room (RevPAR) and average daily rate (ADR)) in the participating cities. The authors find that hotel prices rise during the FIFA World Cup but quickly decrease after the event, to a price level similar to that of the pre-event period.…”

From Legacy Rhetoric to Business Benefits: A Case Study of the Gold Coast 2018 Commonwealth Games

“…In terms of hotel development, studies have shown that despite long-term pre-event planning, hotel occupancies can often fall short of expected demand, in turn impacting on the MS 17 077 Event Management E-pub economic gains promoted in event rhetoric (Barreda, Zubieta, Chen, Cassilha, & Kageyama, 2017;Sun et al, 2013). In the case of the 2009 World Games hosted in Taiwan, Sun et al (2013) found a range of factors contributed to lower than expected occupancy rates, including inefficient collaboration between stakeholders, competition from hotels in regional areas, and a perception of an unfriendly local area associated with illness, climatic conditions and political controversies.…”