The Miami hospitality industry is rolling out the red carpet for the projected 110,000 football fans who will descend upon the host city this weekend for Super Bowl XLIV.
Luxury hotels near Sun Life Stadium—where the Indianapolis Colts and New Orleans Saints will face off Sunday evening—are offering beachfront suites with private yachts, limousines are standing by and local officials are sponsoring a star-studded line-up of public events, from celebrity fishing classics, to concerts to flag football games with VIP athletes.
The question is: will the fans be willing to pay?
Following a greater than 20-percent drop in spending surrounding last year’s big game, accounting firm PricewaterhouseCoopers estimates this year’s Super Bowl will generate $153 million in direct spending throughout the region by the National Football League, businesses, visitors and the media on lodging, transportation, food and beverage, entertainment, business services and other hospitality and tourism activities.
That may represents a 3-percent increase over last year, but it is 27 percent less than 2007—the last time the Super Bowl was played in Miami.
“Spending will once again be constrained by prevailing economic conditions,” says Robert Canton, director of PwC’s sports and tourism sector.
That’s no surprise to Melissa Bennett, owner of Ocean Drive Limo in Miami Springs, who says she’s felt the pinch of the recession first-hand.
“We’ve definitely seen a decline in business,” says Bennett, noting rentals have been off by 30 percent to 40 percent since last summer. “We haven’t seen any real activity from leisure customers for the Super Bowl, but we have a few corporate clients and they’re still booking. Are they going crazy? No, they’re not.”
Not So Fan-tastic
It’s not just Miami vendors, however, that are reporting lower sales.
Economic pressure is also driving down the price of scalped Super Bowl tickets.
StubHub, an online ticket marketplace and unit of eBay , reports the price of tickets for all major sporting events have been down 13 percent “across the board” since this time last year.
“It’s been a very interesting last couple of years,” says Joellen Ferrer, a spokeswoman for StubHub. “Sellers are realizing they have smaller margins and have to be a bit more competitive in listing their ticket prices.”
For the 2010 Super Bowl, she notes, fans are paying an average price of $2,824 per ticket, with a range of $1,590 to $7,650—depending on seat location.
Fans from California are dropping the most at an average ticket price of $3,919.
Ad Sales Slide
Ad sales are also trending lower.
Super Bowl commercials, of course, have become nearly as anticipated at the game itself, a marketing proving ground where some of the biggest brands flex their creative muscle.
In fact, the majority (51 percent) of Super Bowl viewers surveyed by the New York-based consumer research firm Nielson Co. said they enjoy the game’s ads more than the action on the field.
Yet, “the recessionary environment is expected to yield lower pricing for the 2010 game,” with CBS reportedly selling 30-second spots for between $2.5 and $2.8 million, reports TNS Media Intelligence, which tracks the industry.
That’s down from last year when ads on NBC averaged $3 million—a record high.
Some of the most loyal brands, namely PepsiCo , which has advertised in the Super Bowl for 23 years, and General Motors, are sitting this one out.
Game For A Good Time
It’s not all bad news, however.
For snack food vendors, Super Bowl Sunday remains the most important day of the year, and according to Nielson Co. most consumers plan to maintain their level of spending for 2010.
Viewers across the country stock their at-home parties with nearly 166 million pounds of snacks, the company reports, with potato chips being the most popular snack sold. Tortilla chips and pretzels and popcorn are close contenders.
As for alcohol, consumers last year purchased 49 million cases of beer during the two weeks leading up to the big game, the seventh biggest beer holiday after July 4th, Memorial Day and Labor Day, Thanksgiving, Christmas, and Halloween.
And this year, 71 percent of U.S. households surveyed said they will spend “about the same” on food and beverages for the Super Bowl compared with last year when sales totaled $645 million. Another 15 percent plan to spend less, 5 percent will spend more, and 9 percent
Still, as the Indianapolis Colts take on the New Orleans Saints (the first shot at a ring in their 42 year history) this Sunday, it won’t be the economy or jobless claims that fans gather by their flat screens to discuss.
In fact, it’s partly because of the recession that Rodney Barreto, chairman of the South Florida Super Bowl Host Committee, expects turnout to be among the bigger in NFL history.
“I think people are a little beaten up about the recession and are looking to have some fun,” he says. “There’ll be lots of visitors here for the parties, looking to be seen, chasing stars, playing golf. There’s something for everyone during the Super Bowl.”
Early on, he notes, the committee had “sponsors who were with us in 2007 decide not to stay on this year, but what we found is that other sponsors stepped up and saw an opportunity to advertise in the Super Bowl for the first time,” he says. “We’ve reached all our internal
Regardless of which way the economic wind blows, Barreto says, the Super Bowl remains one of the can’t-miss events of the year.