Abstract
A difference-in-differences analysis is used to investigate the short-term price effects of eight sporting events in Finnish Lapland. Data consist of 220,000 room bookings from the reservation system of a nine-hotels chain. Treated hotels are those located within an area where sporting events are regularly held. The control group consists of hotels further away that are not affected by the event. Robust regressions show that hotel room prices rise by 14% on average during the event, when booking and guest specific factors are held constant. For the pre-event period, no significant positive price effect can be detected, and for the post-event period, there is even a significant negative effect of 6%, on average. In addition, there is a large variation in the price effects across the different sporting events, with the highest for the Levi FIS Alpine Ski World Cup competition (60%) and no effect for some small-scale events. Quantile regressions show that price effects are slightly higher for high-priced than for low-priced rooms.
Highlights
Nowadays, many small sporting events are organized all over the world
The results using the robust regression method and Ordinary least squares (OLS) show that sporting events are associated with higher room rates during the event period in six of eight sporting events with the price effect ranging between 3.5% and 63.5% (1⁄4(exp(0.49)À1) Â 100)
Previous studies have mainly focused on the economic impact of major sporting events such as the Olympic Games or the FIFA World Cup
Summary
Many small sporting events are organized all over the world. Major sporting events have become important attractions for tourists, such as mega-events like the Olympics (Baade and Matheson, 2016; Hall, 1992; Hudson, 2012; Nicolau and Sharma, 2018). There are many studies available on economic effects of sporting events but only a few examine the short-term impacts on hotel prices. This study explores the short-term effects of sporting events on hotel room prices by employing a difference-in-difference (DID) strategy. Barreda et al (2017) investigate the impact of FIFA World Cup (2014) on hotel prices (revenue per available room (RevPAR) and average daily rate (ADR)) in the participating cities. Depken and Stephenson (2018) estimate that small sporting events in the United States only lead to a temporary increase in the average daily rate of hotels with price effects in the moderate range. QR techniques make it possible to investigate to what extent the price effects of sporting events differ between low- and high-priced hotel rooms (conditional on control factors). Number of Number of Number of treated affected hotels in the hotels bookings control group
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