When Major League Baseball's owners and the MLB Players Association could not come to an agreement on the collective bargaining agreement before the originally scheduled start of Spring Training, the impact was wider than just baseball.
Communities in Florida and Arizona, which host the Grapefruit and Cactus leagues respectively, were left without the familiar sign of early spring, and hotel markets in those two states were left with two fewer weeks of room nights to sell to visiting fans, a valuable demand source.
By commanding higher rates, hotels in Florida and Arizona still achieved revenues higher than during Spring Training in 2019, but a more typical booking volume at those rates could have meant another $30 million in room revenue in Arizona and another $21 million in Florida, according to analysis by STR, CoStar's hospitality analytics firm.
Typical Spring Training: A Boon For Florida and Arizona
MLB Spring Training typically runs for five to six weeks from mid-February through late March, bringing not just the teams themselves, but also diehard baseball fans looking to catch an early glimpse of their team’s chances for the season and to have the opportunity to interact with players in a more informal environment. In 2019, more than 1.4 million people attended the Florida Grapefruit League's Spring Training games, while the Arizona Cactus League games drew more than 1.7 million.
This influx of players, coaches, support staff, sports journalists and fans is a big boon to area hotels. For the six markets that have at least one MLB team facility, Spring Training consistently represents the market’s strongest performance of the year. In 2019, the highest weekly occupancy, average daily rate and revenue per available room for each market was achieved during Spring Training — excluding ADR for hotels in Palm Beach, Florida, which peaked in the week ending Dec. 28. In 2019, more than 20% of the annual hotel rooms revenue for Phoenix was collected during the Spring Training period.
However, baseball is not the only demand driver in these markets, especially as Spring Training coincides with school spring breaks. According to STR’s School Break Report, 75% of college students were on spring break at some point during the Spring Training period in 2019. With beaches drawing spring breakers to Florida and outdoor recreation attracting visitors to Arizona, this strong performance cannot solely be attributed to the impact of Spring Training. However, in 2022, markets experienced what a spring looks like without baseball.
2022 Spring Training: A Disappointing Loss
This year, Spring Training was originally scheduled to run from approximately Feb. 15 — when pitchers and catchers were due to report — through March 28, the final day of Spring Training games. The ongoing negotiations over the collective bargaining agreement both delayed and ultimately condensed the Spring Training period in order to have a full season of regular season baseball. The start date was pushed to March 11, with games concluding on April 5, reducing the length of Spring Training.
The impact from the delay was stronger for hotels in Arizona than hotels in Florida. The Cactus League is much more geographically dense than the Grapefruit League, thereby intensifying the impact on just one market. All of the Arizona stadiums and practice facilities are within the Phoenix metro area, while in Florida teams are spread between the Tampa, Sarasota, Palm Beach, Fort Myers and Florida Central markets.
After some omicron-related volatility at the beginning of the year, the Phoenix submarkets that host Spring Training had neared or exceeded 2019 occupancy levels in the week ending Feb. 12, prior to the scheduled start of Spring Training. However, in the weeks between the scheduled start and the actual start, those occupancy indexes fell as much as 16%.
Once Spring Training started, hotel occupancies started to rebound, with most submarkets exceeding 2019 occupancies in the final full week of games on April 2. That week in 2019 was after Spring Training had concluded. If the 2022 data was instead indexed to the final full week of games in 2019, hotels in those submarkets would instead have been between 85% and 92% of 2019 occupancy levels.
Strong ADR performance offset the occupancy declines to push RevPAR over 2019 levels in most weeks; however this depressed occupancy still greatly impacted the market. Had occupancies in the four key submarkets maintained the Feb. 12 weekly index for the originally scheduled Spring Training, that would have represented more than 125,000 additional room nights of demand. At the current ADR levels for these submarkets, that could have meant an additional $30 million in room revenue. For the overall markets, hotel revenue is just the beginning in terms of total economic impact from this shortened and delayed Spring Training.
Florida's hotel markets did not experience as strong of an occupancy dip. Florida's west coast markets struggled more with the loss of Spring Training, with the greatest dips in occupancy in the Fort Myers/Bonita Springs, Sarasota/Beaches, Tarpon Springs/North Shore submarkets, as well as Fort Pierce/Port St. Lucie on the east coast. While hotels in these submarkets did not fall to the same low occupancy index as the Phoenix submarkets, they were performing at a consistently higher level than Phoenix hotels at the start of the year, relative to 2019.
As in Phoenix, strong ADR kept RevPAR well above 2019 levels, but the decreased demand still represented a missed opportunity for Florida hotels. Had the submarkets that declined instead maintained their Feb. 12 occupancy indexes, that would have equated to an additional 91,000 room nights of demand across the 14 submarkets that host Spring Training. At current ADR levels, that would have represented an additional $21 million in hotel rooms revenue.
After the COVID-19 impacts of 2020 and 2021, and the delayed and shortened Spring Training this year, Florida and Arizona markets — and baseball fans — will be eager to return to a hopefully normal Spring Training in 2023.
Hannah Smith is a senior consultant at STR, CoStar's hospitality analytics firm.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to contact an editor with any questions or concerns. For more analysis of STR data, visit the data insights blog on STR.com.