The Formula One U.S. Grand Prix weekend in Austin, Texas, in late October shattered all previous records for the highest average daily rates and revenue per available room in the state's capital city.
Austin's Circuit of the Americas played host to the 19th round of the 2022 Formula One professional auto racing season on Oct. 21-23. The number of visitors for the three-day event was estimated to be over 400,000, with expectations of it being one of the city's highest-attended and most profitable events.
In 2021, visitors to the race spent over $400 million in direct spending and nearly $200 million in indirect spending, setting an expectation that this year's race would provide an equal or even bigger economic bump for the city and its hospitality sector.
While the total economic impact is currently unknown, preliminary data for the high-end hotel market over the three-day event saw a total occupancy average of 91%. Saturday resulted in 94% occupancy and the highest recorded occupancy rate over that weekend. Overall, average occupancy was higher during 2021's race weekend, at 92%. However, few markets have experienced the level of hotel inventory growth that Austin has in recent years, with over 650 high-end rooms completed in the last 12 months alone. This suggests that the market is absorbing new hotel rooms at record strength, with the increased supply contributing to the slight downturn in occupancy over race weekend.
More strikingly, the average daily rate, or ADR, increased by 33% on average compared to 2021 race weekend rates. ADR among high-end hotels hit an all-time high with an average rate of $676, with the highest ADR at $744 on Saturday, a 37% increase from the year prior.
Strong hotel performance from the race also drove RevPAR to new highs, averaging $619 across the three days, with Saturday setting a record high at $702. Overall, this was the single-highest RevPAR ever recorded in Austin, adding to the city's annual trend of October performance outperforming all other months since 2016. RevPAR is a key performance indicator for hotels because it combines occupancy and average hotel rates into one metric.
Group demand, which is rooms sold simultaneously in blocks of a minimum of 10 rooms, was higher than in years past, surpassing the average leisure traveler demand for the weekend by 30%. Group demand provides insight into what type of visitors make up a hotel's guests-revenue base and can demonstrate a clear pattern between group and leisure guests. The increase in group demand suggests a potential gain in corporate turnout.
An average of roughly 14,200 high-end hotel rooms sold over the weekend, resulting in $29 million in total revenue. That is an increase of 38% from last year's race.
With Formula One quickly racing its way to popularity in the U.S., its growth is expected to accelerate with a record 24 races in 2023, including a return to Austin and Miami and a new race on the Las Vegas Strip.