BROOMFIELD, Colorado—As another NFL season draws to an end, the analysis of the season begins.
Over the last few years, two NFL teams—The St. Louis Rams and the San Diego Chargers—have left their cities and moved to Los Angeles, while a third team—the Oakland Raiders—is set to move to Las Vegas within the next few seasons. For the cities involved, one looming question is: What is the impact, if any, on the hotel industry in the cities that lose an NFL team and the cities that gain one? This analysis examines performance changes in the hotel markets affected by the Chargers’ and Rams’ moves.
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To analyze the impact on cities that lost NFL teams, STR—parent company of Hotel News Now—looked at hotel performance for the last season played in that city, and the year after the team departed. First, we pulled hotel data on days in which home games were played in the city, as well as data for the days before a home game. Then, we pulled data for those same days during the following year, when there were no games.
Chargers leave San Diego
The Chargers were the most recent team to move, when the team left San Diego to move to Los Angeles for the 2017 season. While a new stadium is being built—which will be shared with the Rams—the Chargers have been playing at the StubHub Center in Carson, California, about 15 miles south of downtown Los Angeles.
The data shows that San Diego hotel performance declined in 2017, the year after the Chargers left the city. There was a 7.9% year-over-year decrease in demand and an overall 15.45% revenue-per-available-room decrease from 2016.
When you exclude the eighth game of the 2016 season, which was played on a holiday weekend, most of the key performance indicators had double-digit decreases. Demand decreased 11.1%, and overall RevPAR decreased 19.5%.
However, in 2017, weekends in general in San Diego were performing at lower levels than in 2016. KPIs for an average weekend in San Diego from September through December were down between 2% and 3% year over year, so the declines cannot be attributed solely to the Chargers’ move.
Rams leave St. Louis
The Rams left St. Louis for Los Angeles before the start of the 2016 season. While the team’s new stadium is being built in Inglewood, California, the Rams have played home games during the past two seasons at the Los Angeles Memorial Coliseum, about three miles south of downtown Los Angeles.
The 2015 data for St. Louis—the Rams’ last season in the city—and 2016 show some decline in hotel performance, though not as significant as what we saw in San Diego. There was a 2.1% decrease in demand but a 0.2% increase in RevPAR when comparing dates of 2015 Rams home games with the same days the following year. Average daily rate in St. Louis also increased by 1.3% year over year on those selected dates.
When looking at average weekends from September through December in St. Louis, KPIs increased across the board from 2015 to 2016, although the absolute increases were not very significant.
The Los Angeles effect
The effect on Los Angeles is even harder to determine, because Los Angeles is such a large market with a large number of events occurring at any time. We looked at data for five submarkets, including and surrounding the StubHub Center—the current home venue of the Los Angeles Chargers—and the five submarkets including and surrounding the Los Angeles Memorial Coliseum, the Rams’ home stadium.
For both the Chargers and Rams, we compared hotel performance on the days in which home games were played in the city—and the days before those home games—with those same days the previous year, before the teams had relocated to Los Angeles.
For the Chargers, 2017 demand in the five LA submarkets studied increased by 4.4% over 2016 while RevPAR increased 5.5%. But the Rams’ move seems to have made a bigger hotel performance splash in its five submarkets, as 2016 demand increased by 5.1% over 2015 and RevPAR jumped by 16.4%.
While there are increases across all KPIs for these submarkets, we cannot conclude that the increases are solely caused by NFL games.
From previous STR research on the NFL’s impact on the hotel industry, we know that there are many factors that can skew the data. Although we may never know the full extent of the impact of an NFL team leaving a city, this analysis shows that there was some impact to the hotel industry for all cities involved.
The next NFL team that has announced plans to move is the Oakland Raiders, which will leave northern California for Las Vegas ahead of the 2020 season—but could move by as early as 2019—which many believe will have a significant impact on both cities.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.