The three-day 2023 Formula 1 U.S. Grand Prix drove hotel performance at upper-tier hotels in downtown Austin, but at lower levels on average than during race weekend in 2022.
The Formula 1 Grand Prix, at the Circuit of the Americas Track in Austin, is a highly anticipated annual event that attracts fans, celebrities and large crowds to downtown hotels. The first race was in 2012 at the prestigious Circuit of the Americas track, southwest of downtown Austin. Despite high expectations for this year's race, hotel occupancy and revenue per available room were lower on average, and there was a slight lift in average daily rates.
At downtown, upper-tier hotels, occupancy during the three-day event averaged 88%, compared to 94% last year. However, Saturday showed the highest recorded occupancy rate of 92%. Over the past five years, the highest occupancy rate on average was in 2019, when hotels were 95% full over the three days. Since then, high-end hotel room inventory has increased by 22%, thus offsetting demand absorption and potentially contributing to a decrease in occupancy rates.
During the race weekend, ADR increased by 5% compared to last year. The highest ADR was recorded on Saturday, the second day of the three-day event, and was $877 among high-end hotels. This is a 4% decrease from last year's record-breaking ADR of $913 on the same day.
Decreased performance also affected RevPAR, which was 5% lower than last year’s three-day average, suggesting that increased room rates on the first and last day of the Grand Prix were offset by lower occupancy overall.
This year's race may not have met the expectations set by the previous year's event. However, the upcoming Las Vegas Grand Prix, scheduled for Nov. 16-18, could attract some of the fans from the Austin market. Another significant factor is that the Vegas Grand Prix Race is taking place on Saturday instead of Sunday.