Despite Supply, Hoteliers Optimistic About Super Bowl

On Feb. 2, Super Bowl XLVIII—the biggest sporting event of the year—will invade MetLife Stadium in East Rutherford, N.J. The game and the lavish celebrations leading up to it are expected to infuse as much as $600 million into the economies in northern New Jersey and nearby New York City, according to a recent estimate from the National Football League. But with just weeks to go until kickoff, local hotels are left wondering how big their piece of the pie will really be.

At this point, “everyone wanted and expected more,” says Joseph Bojanowski, President of PM Hospitality Strategies (PMHS), operators of the new Hilton Meadowlands in East Rutherford, the closest hotel in proximity to MetLife. “But it’s probably not going to be that.”

Traditionally, Super Bowl host cities see a sizeable spike in occupancy and average daily rates (ADR) when the big game comes to town. Last year, New Orleans saw 96 percent occupancy on Super Bowl weekend, and in 2012, host city Indianapolis hit 95 percent, according to Smith Travel Research. But a recent report in the Wall Street Journal revealed that as of last month, only 27 percent of New York City’s 106,000 rooms were accounted for.

While that number has risen since the report, it’s still not where hoteliers hoped to be in mid-January. Most in the industry scoff at the notion that potentially adverse weather conditions in an open-roof stadium could scare away attendees. “The stadium will be full even if it will be cold. The game is historic in its own right,” says Kate Martin, general manager of New York City’s Hotel Chandler. Instead, analysts chalk the disappointing early returns up to an overwhelming amount of supply in New York City and northern New Jersey.


“NYC has more hotels than every other city that has hosted the Super Bowl, so consumers have plenty of choices of places to stay,” says Senior Vice President at PFK Consulting John Fox, who has kept a close eye on the city’s hotel market for decades. “Clearly an event like this is a bigger impact to New Orleans—which has 37,000 rooms—than New York, with [more than 100,000].”

Bojanowski agrees. “I believe there’s as much demand as there typically is, but it’s just spread across a significantly wider supply base and geographic region. In New Orleans and Indianapolis, all the hotels were in a very condensed area. This one is spreading it all over Manhattan, and the actual event is in northern New Jersey. It’s a lot more diluted than it’s ever been.”

Sean Hennessey, CEO of New York-based hospitality consultant Lodging Advisors, points to the area’s shadow supply as another potential factor triggering weaker results than anticipated. “There won’t be the 30% percent price increase that other cities have seen. Our analysis indicates this is not due to weather concerns as much as the many new hotel openings in the New York metro market and the growth in rooms available from Airbnb and similar services—with some homeowners putting their homes up for rent in hopes of a one-time windfall,” he says. “There has been a very sizable increase in the number of options for travelers—some of which are legal, some are not.”

Several industry experts pointed to another underreported issue that could negatively affect occupancy and rates: Many national media outlets and sponsors won’t have to travel to the Super Bowl since they’re already based in New York. “I think this may be a bigger influence than many expected, and I’ve been raising this point frequently,” Fox says. “Say a TV network wants to take several of its bigger advertisers to the game. The network people are likely already New Yorkers, and the advertisers in many cases are as well—thus no need for rooms.”

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