Super Bowl 2022 in Los Angeles to test if big spending is back

Circus performers, carnival games and rapper Lil Wayne will descend on the Shrine Auditorium in downtown Los Angeles as part of a Super Bowl weekend celebration hosted by former NBA center Shaquille O ‘Neal.

In Santa Monica, an outdoor mall fashion show hosted by Off the Field Players’ Wives Assn. promises an afternoon “where fashion, football and philanthropy collide”.

But the NFL Players Assn. he himself has canceled all of his Super Bowl activities, including his Friday night VIP party and a separate fundraiser and art auction. He cited “the Omicron explosion and its pervasive and evolving impacts,” showing how difficult it has become for organizers and businesses to plan for COVID contingencies.

Major sporting events are usually a boon for the cities that host them, with hotels and local businesses preparing months in advance to welcome hordes of tourists and coming up with creative ways to capture their money. But with the Omicron variant still in circulation and live events returning after long hiatuses, are Super Bowl fans ready to party and spend in Los Angeles?

It depends on who you ask.

“People are tired of being home all the time and this is going to be their big splurge,” said Roy Weinstein, managing director of Micronomics Economic Research and Consulting, who was hired by the Super Bowl organizing committee to study the economic benefits. expected from the game and related events.

The Feb. 13 Super Bowl, one of the nation’s first major sporting events with in-person parties, concerts and other gatherings since the pandemic began, will be a big test of whether pandemic-weary Americans are ready to socialize and spend in really big ways again.

For Super Bowl organizers, tourism promoters and local business owners, that will mean trying to walk a tightrope between promoting safe health protocols and encouraging football fans to celebrate and spend.

We will wear our masks and spend money.

Vaughn Davis, General Manager, Dream Hollywood Hotel

High hotel prices and occupancy levels for Super Bowl weekend suggest that the lingering threat of the Omicron variant hasn’t totally dampened the appetite for celebrations and spending.

Like most major hotels in downtown Los Angeles, the Intercontinental Hotel and the JW Marriott are fully booked for the weekend. In Hollywood, rooms at the Dream Hollywood Hotel cost about four times the region’s average nightly rate of $445.

Weinstein’s so-called economic impact study predicts the Super Bowl will generate up to $477.5 million in profits, from about 150,000 out-of-town visitors who are expected to spend up to $350 $ per night in a hotel room and $300 per day in other things. No less than $22 million in taxes will go to local and state coffers.

“Ridiculous” is how Lauren Heller, an associate professor of economics at the Campbell School of Business at Berry College in Georgia, describes the total number of benefits.

Heller, co-author of a 2020 study of Super Bowl spending in the Sports Economics Journalsaid the economic impact of these types of sporting events is typically a tenth of what those studies predicted: “Anyone with common sense will say it will be less.”

Nola Agha, professor of sports management at the University of San Francisco, estimates the economic effect of this year’s Super Bowl will be closer to $47 million.

According to some experts, economic forecasts for such mega-events can be dubious in their methodology and are notoriously overstated, acting more as a marketing tool for the events and their host cities than a true analysis of the business and tourism expenditure likely to increase. ‘take place. .

“In general, these numbers are grossly overestimated,” Agha said.

And the speed of COVID-19 outbreaks only complicates the ability to make an accurate forecast.

Other events scheduled around the big game include a dominoes tournament, cigar night, cannabis tour, comedy shows and several watch parties, including a party at the Abbey Food and Bar in West Hollywood which will offer special drinks served by waiters dressed as referees. .

“It’s as if, weekend after weekend, [spending] the numbers are going up again,” said Todd Barnes, general manager of the trendy restaurant frequented by Hollywood stars. “I think it’s going to be a big weekend.”

Organizers of Shaq’s Fun House, held each year around each Super Bowl weekend, say tickets are selling out 30% faster than the previous two years, and more than a dozen corporate sponsors are lining up. are registered to participate in the festivities. Prices for the event, which is limited to 5,000 people, started at $250 per person for advance sales and can reach $1,300 for VIP tickets.

“I think people are ready to get back to business as usual,” said Joe Silberzweig, co-founder of Medium Rare, the company producing the event. “The Super Bowl is the best weekend to do that.”

Adam Burke, president and CEO of the Los Angeles Tourism & Convention Board, is also upbeat: “From what we’re seeing, a lot of people are booking pre-Super Bowl and post-Super Bowl stays,” he said.

Burke pointed out STR analysisa Tennessee-based hotel data company, which predicts daily hotel rates in Los Angeles over Super Bowl weekend will average $445, the second-highest average of any Super Bowl — behind only the average rate of $616 per night during Super Bowl 54 in South Florida.

LA’s home team, the Rams, will face the San Francisco 49ers in the NFC Championship Game on Sunday. Although fewer out-of-town visitors will be drawn to Los Angeles if the Rams continue to play in the Super Bowl, experts point out that the 70,240-seat SoFi Stadium is already sold out and many of the most major hotels are already fully booked. , regardless of who plays on Super Bowl Sunday.

Heller, who has studied Super Bowl spending, said his work suggests that most economic impact studies overestimate hotel revenue generated by the events, counting revenue that would otherwise have been generated at hotels without the game. .

Also, most economic impact studies don’t subtract accommodation costs to cities, such as paying for extra policing, traffic, waste and transportation, she said.

Weinstein defended his official estimate, saying he was too conservative in his analysis and relied on what economists call IMPLAN, a software model developed by academics and the US government that has been used since the 1980s.

The software allows economists to input numbers such as hotel room rates and ticket sales for a specific region to get an overall forecast of economic activity. Critics like Heller say IMPLAN is not sophisticated enough to account for pandemic spikes, among other factors.

Recent sporting events don’t offer a clear picture of how spending around the Super Bowl may pan out, but it seems clear that some Americans aren’t ready to party like 2019.

Many of the Super Bowl events last year in Tampa Bay, Florida were held virtually, via streaming video, due to the pandemic. Gatherings allowed last year were limited in size and included only vaccinated fans.

Accounting firm PwC predicted the previous game in 2020 in South Florida — Super Bowl 54 — would generate $218 million in out-of-pocket spending.

PwC did not conduct a post-match follow-up study to determine if the pre-match predictions were accurate. Heller, an economics professor at Berry College, said such reports are rare.

“They don’t want to come back and see how flawed their studies were,” she said.

No financial forecast has been commissioned for this year’s Rose Bowl game in Pasadena. The game was sold out, but event organizers said attendance at the Tournament of Roses parade on New Year’s Day was down slightly, and a rise in Omicron infections forced the cancellation of several events in hall, including a New Year’s Eve black-tie gala.

Ticket sales to allow up to 30,000 fans to watch the parade floats assembled inside large warehouses ahead of the parade have also been canceled to reduce the risk of the virus spreading.

“The economic impact could have been a little low on the parade side,” said David Eads, general manager and executive director of the Pasadena Tournament of Roses. “Some people didn’t feel good in large crowds and didn’t come because of it.”

Gregg Smith, co-founder of Smith Brothers Restaurant Corp., which operates three Pasadena restaurants, said sales for the parade weekend were “a little light,” declining to give a number.

“My feeling is that there is still a bit of caution here,” he said. “People aren’t ready to go out and party yet.”

Pasadena Chamber of Commerce President Paul Little said food sales to visitors watching the floats after the parade accounted for about 40% of sales at the event years before the pandemic.

“The parade wasn’t as crowded as it used to be,” he said. “Obviously people still don’t want to be around other people.”

As work crews cleared homeless encampments near Los Angeles International Airport in anticipation of the influx of out-of-town visitors, downtown Los Angeles hotel managers hope the images of sunny Southern California shown on television across the country during the Super Bowl will spur more visits. .

Some said demand for rooms among holidaymakers has been on the rise lately.

“We are feeling a sense of resurgence,” Javier Cano, regional general manager of the JW Marriot and The Ritz-Carlton told LA Live. “Things Come Back”

At the Dream Hollywood hotel, general manager Vaughn Davis feared the coronavirus was prompting booked guests to cancel. This does not happen.

Hotel occupancy rates in Los Angeles in October and November hit pre-pandemic levels, and Davis said her rooms were renting about four times the area average.

Several gatherings are planned at the hotel, including a private rhythm and blues party around the rooftop pool and bar, attended by about 200 guests, Davis said. All party guests must present proof that they are fully immunized.

“We’re going to wear our masks and spend money,” he said.

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