Short-term hotel room price effects of sporting events

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.