With Gay Pride events coming up this June in dozens of cities around the United States, we thought it would be only fitting to look at how such events impact local short-term rental markets.
At PriceMethod, everyday we collect and analyze over 500 million data points on the pricing and availability of both short-term rentals and hotels, which allows us to examine how local markets respond to Pride and other special events.
How to Evaluate the Effect of a Special Event on the Local Rental Market
Here is a list of key factors that contribute to pricing shifts:
1.How many people attend the event?
2.Does it occur during high season or low season?
3.Does it draw mostly locals or out-of-towners?
4.How many hotel rooms and rentals are in the area?
5.Where is the listing located relative to the event?
6.How are local hotels and rentals priced for the event?
In this article, we’ll look at a number of these factors as they relate to Pride events around the country. We’ll look at local hotel prices to gauge the demand for lodging. Because hotels tend to have sophisticated “revenue management” teams and systems, their pricing is a pretty good predictor of the demand for accommodation.
A Look at Pacific Northwest Pride Celebrations
How does Seattle Pride affect Seattle hotel prices?
As you can see, Seattle Pride makes a definite impact. It’s not the biggest event of the year in Seattle, but the hotels increase their prices, and many hosts will do the same.
Now let’s look at hotel rates in Portland:
In Portland, we see virtually no impact from Portland Pride. There are ups and downs, but those happen during weekends throughout the year in Portland, regardless of events. During the 10 days of Portland Pride, prices still dip mid-week as they do during the rest of the year. In fact, as far as Portland hotel prices go, Portland Pride looks like a normal 10-day stretch of summer. To understand why, let’s look at the size of both events.
How does Seattle Pride compare to Portland Pride?
Seattle Pride spans only a single long weekend while Pride Portland lasts 10 days. Seattle Pride is expected to draw over 350,000 attendees, while Pride Portland is expected to draw roughly 55,000. That’s a huge difference.
Since both cities have populations of around 600,000, it’s clear that the Seattle event draws a lot of out-of-towners, while the Portland one is composed largely of locals who don’t need to rent a place. This explains why Seattle Pride impacts local pricing and the Portland one doesn’t. It attracts a lot more people, and, most significantly, more people from out of town.
The Big Leagues: San Francisco vs. New York City Pride
You’d think that both events would have a huge impact on the local rental market, right? Well, not exactly. Let’s look at the data.
San Francisco Hotel Rates:
As you can see, SF Pride makes a huge impact on the local market, driving up hotel prices 64%. It’s one of the top five events of the year in terms of hotel price impact, and we would expect to see significant price increases in the San Francisco rental market as well.
Now let’s look at NYC Hotel Rates:
When we look at NYC Pride, it’s a non-event, statistically speaking. Prices are actually higher in New York City during the weekdays before Pride than during the event itself.
How could this be?
Basically, SF Pride is a huge event in a medium-sized city. San Francisco has only 852,000 residents, so with an estimated 1.7 million attendees, SF Pride is substantially larger than the whole city's population.
Although NYC Pride is an a million-person event, it only represents a fraction of the population, as there are 8.4 million people who live there. Consequently, there are more people who travel to San Francisco to celebrate Pride comparatively.
Where do Visitors to Pride Parades Stay?
San Francisco has 33,642 hotel rooms and 6,007 short-term rentals, according to sanfrancisco.travel, compared to over 90,000 hotel rooms and 29,262 short-term rentals in NYC, according to PriceMethod data.
NYC Pride thus has far fewer visitors for Pride but far more rooms, which explains why NYC doesn’t see much of an impact from Pride, while in SF it moves the whole market.
From Macro to Micro: How does Pride Affect Neighborhoods?
Now let’s take a closer look at the San Francisco market. We know the city market as a whole moves for Pride, but how does it impact individual neighborhoods?
To find out, we took a look at hosts in specific neighborhoods who actively adjust their pricing. First we’ll show you the average prices charged by these “top hosts” in the Castro, which is the most popular neighborhood in San Francisco during Pride.
As expected, there’s a significant increase it rates for Pride, from an average of $194 to $255 per night. That’s a 24% increase.
Now let’s look at prices in the Marina.
While the Marina is only about 3 miles from the Castro, Pride doesn’t move the market at all in this neighborhood.
It seems Pride-goers are able to find enough lodging closer to the event. And if they do need to stay in the Marina, they don’t need to pay higher-than-normal prices to do so.
Although Pride and other special events can have a big impact on the local accommodations market, it’s not always obvious what the impact will be. Only by looking at the specifics of each event, each market, and each listing can hosts and guests get a real sense of what the market impact will be.
If you’re either hosting or traveling for Pride (or any other special event), think about the factors listed above to determine how the event will impact the price for local rentals.
If you don’t have time to do all of this yourself, come to PriceMethod.com to see our free price recommendations for short-term rentals.
This article was written by Joe Fraiman, the co-founder of PriceMethod, a startup that provides dynamic pricing software to short-term rental hosts around the United States. PriceMethod is able to increase hosts’ revenue 20-40% by updating their prices daily with proprietary algorithms. These algorithms are developed by an in-house team of PhD data scientists and are informed by billions of data points.