The Super Bowl Impact on Airbnb Markets: Minneapolis and Atlanta
For property managers and vacation home rental hosts, the Super Bowl means a lot more than football. Each February, the country’s most anticipated sporting event brings a staggering number of out-of-town, short-term visitors to one select U.S. city. The result? Massive upticks in the supply, demand, pricing, and the revenue earned by Airbnb Super Bowl hosts.
In order to gauge how the Super Bowl affects the Airbnb market of the host city, we’ve analyzed Minneapolis and Atlanta — the two most recent host locations — using unique AllTheRooms data. While it’s a safe assumption to say that the Super Bowl brings an overall increase in revenue across the accommodation industry, how exactly does it impact supply, occupancy rates, and average daily rates? Do event-based hosts fall victim to the lure of a primetime event and end up pricing themselves out of the market? Or is focusing on big-ticket events a smart and sustainable way to manage properties? Moreover, what happens to hotel chains with the Airbnb shake-up? Here’s what we found:
Increased supply & property listings
In the case of the 2019 Super Bowl in Atlanta, there was a significant rise in the raw number of properties available in the months and weeks leading up to the big game. For reference, throughout 2017, Atlanta had around 3,000 properties on the market, while in 2018, that number hovered at 4,000. After that, there were two major points when the numbers jumped again — September (when football season starts) and January (when playoffs start).
By September there were roughly 6,000 properties available, and by mid-January, that number hit 8,000. Come February 3rd (Super Bowl day), there were 13,354 properties available in Atlanta. All in all, there was a 208% increase in the total number of properties available from the summer before the season began and a 210% year-over-year increase for the same February weekend in 2018.
Minneapolis saw much of the same trajectory. While the Minnesota city is a lesser-known tourist destination, its 895 properties in 2017 spiked nearly 300% up to 3,553 on the day of the Super Bowl.
Arguably, what’s more interesting is the time at which these properties became available on the Airbnb market. In Atlanta, nearly 37% of all new properties were listed within just two weeks of the game — the time at which the teams are actually set (and when most people start booking their trips). Minneapolis hosts were notably more prepared: 97.3% of properties were already listed and active before this 14-day period.
Timeframes for ADR increases
According to both Atlanta’s and Minneapolis’ ADRs, for special events like the Super Bowl, guests are often willing to pay substantially more for accommodation. In Atlanta, while historically guests paid around the low $100s per night, that number shot up 360.4% to $496 per night on Super Bowl game day.
Minneapolis started around the same ballpark with ADRs averaging mid $90s to low $100s in the months and years before the Superbowl. However, the game’s impact on Minneapolis’ ADRs was almost double that of Atlanta’s. On the night of the game, guests paid $700.75 on average — a year-over-year increase of 654.3%.
Occupancy rates & overpricing
Big events mean big occupancy rates, right? Wrong. Looking at the Atlanta occupancy rate in the week prior to the Super Bowl, it hovered around 19%, which is a far cry from its yearly average of 41% for that same time period. Based on previous yearly trends, Atlanta’s annual occupancy rate stays around 50% and can even jump above 60% on summer weekends. Why then, did Atlanta’s Super Bowl week see such low occupancy rates?
One theory is that asking prices were far too high. For the week prior to the Super Bowl, the average ADR was $264 per night. Hosts’ average asking price was $611 — 131% higher than the rate at which rooms were actually booked. Minneapolis experienced the same issue. While guests paid on average about $357 per night, hosts’ average asking price was $835.
Another theory is that hosts listed their properties too late on Airbnb for the Super Bowl weekend, and the market became flooded with listings, of which there wasn’t sufficient demand to match. As previously mentioned, 37% of Atlanta’s new properties were listed a mere two weeks ahead of the game, suggesting that the majority of latecomers lost out on bookings because, for large events like the Super Bowl, guests prefer to secure accommodation well in advance. With that being said, the few properties of the 37% who did receive bookings (28.7%), made a significant profit in the late gamble.
Although occupancy rates climbed on Super Bowl Sunday as guests arrive (and give in to paying higher amounts), the week prior tells a story of empty rooms and lost revenue for many hosts.
Hotel losses & optimal markets
Undoubtedly, since the inception of Airbnb, hotel chains have suffered a noticeable blow. With thousands more properties available on the market during Super Bowl weekend, hotels have been forced to lower their ADRs to compete. Occupancy rates remain high — usually above 90% — but in reality, this only hedges their losses in gross revenue due to the slashed ADRs.
What’s notable is how different cities’ hotel markets react to an incoming Super Bowl. Hotels in large cities like Atlanta and New York experience a lesser impact as neither location’s gains nor losses are astonishingly high. However, when the Super Bowl comes to smaller cities like Minneapolis or Indianapolis, hotels can afford to maximize rates due to a limited supply.
The occupancy rate aftermath
The analysis up to this point has only focused on the months and days preceding the Super Bowl. However, the data reveals interesting trends even after the event.
In both cities, occupancy rates saw a considerable drop-off after Super Bowl weekend. To an extent, this is inevitable as thousands of people depart the city, but, that doesn’t account for the year-on-year discrepancies. Minneapolis’ post-Super Bowl rates are 40% lower than that same week in 2017. Meanwhile, Atlanta’s were about 27.5% lower than the year prior.
What does this tell us? Hosts tend to either be overconfident about how long guests will stay after a large event, or they are slow to react and adjust their rates accordingly.
Gross revenue stats
Despite these slip-ups, there is a lot of money to be made during the Super Bowl, and the event is an unquestionable goldmine for Airbnb hosts.
Taken in sum, Atlanta’s hosts earned a gross revenue of $2,049,940 on Super Bowl Sunday alone, which was 1,391.5% more than its previous non-Super Bowl year. Minneapolis’ stats are even more impressive: hosts earned a gross revenue which was 3,923% higher than the previous year, translating as $1,199,684.
Airbnb host income imbalance
Among the extreme increase in money and decrease in occupancy rates, one theme becomes clear — money is being earned, but fewer hosts are earning it. Only for a select few does overconfidence pay off when the Super Bowl is in town. In the days after the game, even though the occupancy rates are down towards 20%, it is those 20% of hosts that are accounting for a 1,113% increase in year-on-year gross revenue in Minneapolis. In Atlanta, it’s only 22% of people who are accounting for a 378% increase in gross revenue.
Interestingly, a large majority — roughly 67% — of the revenue earned on Super Bowl weekend went to “chance” hosts. Chance hosts can be categorized as those with few (or no) reviews that were decidedly opportunistic, having listed their accommodation within six weeks of the game. The chance hosts’ ADRs were almost double those of the established hosts, and their occupancy rates were about half. All that being said, taken in sum, the chance hosts’ gambles paid off and accounted for ⅔ of the total revenue earned.
When drilling down further into why exactly some of the chance hosts lucked out while others were left empty, our data show two main themes. The first (and most predictable) is that accommodations with lower asking prices were almost always booked more. And second, vacation rentals with a large number of sleeps (6+) tended to outperform the smaller accommodations. As events like the Super Bowl attract large groups and a demographic that is willing to spend more money, it makes sense that larger rentals performed better.
The point is, large, repeating events like the Super Bowl have the capacity to completely upturn Airbnb markets and entire vacation rental landscapes. There is money to be made, but there are both good and bad ways to manage a listing, and it’s tough to navigate the balance between smart pricing and pragmatism. Drilling down into the historical data reveals a clear picture as to how different markets react to large events, and how to learn from these host cities to make informed, sound decisions around pricing and occupancy for future events.