Identifying and measuring the impact of cultural events on hotels’ performance

Melis, Giuseppe;Piga, Claudio

2021-01-01

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Abstract

Purpose Focusing on two beer festivals held in Nottingham, England, we evaluate their indirect impact on the performance of city hotels. We build on theoretical insights from the Revenue Management literature to shed empirical light on the potentially beneficial effects of events on both the hotels’ performance. We investigate the impact of the differential support offered by the Destination Management Organization (DMO) over two years. Design/Methodology Using online prices posted in advance of the events on an Online Travel Agent, we assess hotel performance for each day of the events relative to the same day of the week in a week with no event. A similar comparison is made to assess the impact across two different years. In both cases, an Ordinary Least Squares methodology was used. Findings Both events appear not to have had a strong impact on hotel prices and occupancy in 2016, i.e., when the DMO’s promotional effort was more proactive. Instead, in 2017, one event registers higher hotel prices and occupancy both relative to the year before and to the “business as usual” week. Originality/Value The investigation adopts a more naturalistic experimental design to collect the data, which allows us to control for both the impact on prices and occupancy at the level of the single hotel. The evidence is therefore micro- founded. Moreover, results shed light on the role played by the DMO. Practical Implications The study identifies the existence of an indirect positive economic impact of the events on the hospitality sector.