Major events boost hotel performance in South America

Analysis by Hannah Smith

Events have been a major driver of success for hotels worldwide, and South America is no exception. Two recent events, Rock in Rio in Rio de Janeiro and the FIFA U-20 Women’s World Cup in Colombia, show just how important these major events can be for a market.

Rock in Rio (Brazil)

Rock in Rio is a biennial music festival hosted in Rio de Janeiro, which celebrated its tenth anniversary in the city this year. Rock in Rio takes place in September each year, consistently driving a strong hotel performance lift, and typically representing the third-highest revenue per available room (RevPAR) of the year, after New Year’s Eve and Carnival. Both occupancy and ADR peak at the weekends of the 10-day event, with most years showing the strongest KPIs on the second weekend. This year, Rock in Rio brought consistently strong occupancy for the second half of the event, between 81% and 84%, but did not see the same >90% occupancy spike for Friday and Saturday from the last three events. Though the market did not see the same high-occupancy days at the second weekend, Rio achieved a 78.2% occupancy for the full event period, second only to 2019 at 78.4%.

Even with strong occupancy performance from the event, average daily rate (ADR) growth has varied over the years, depending on the economic environment in Brazil at the time. The 2015 and 2017 events took place during a recession and recovery from that recession, respectively, causing overall declines in RevPAR across the market. Those Rock in Rio event years were also being compared to other strong event years – the FIFA World Cup in 2014 and the Rio Summer Olympics in 2016. However, even in tough financial times, Rock in Rio still brings stronger RevPAR performance when compared to the previous month.

RevPAR declines in 2015 were not as strong during Rock in Rio, and while the market was declining prior to the 2017 event, very strong occupancy performance lifted RevPAR?over the previous year. Something similar happened for the 2024 event; after strong growth in 2022 and 2023 coming out of the pandemic, Rio has been stabilizing this year, with months of low or declining RevPAR growth. Rock in Rio brought back strong RevPAR increases for the market, with RevPAR growing over 50% for the ten-day event and 35% for the entire month of September.

Hotels across the market benefit from Rock in Rio regardless of hotel class. However, ADR growth is strongest for Upscale hotels, which achieved a 60% increase in the metric in 2019, and 58% growth in 2024.

This shows that Upscale hotels during the event are achieving similar room rates to Upper Upscale hotels prior to the event. High-end hotels do not see the same level of pricing growth, with Upper Upscale and Luxury hotels growing ADR at approximately half the rate of Upscale. This leads to a tightening of pricing across the market, with lower pricing premiums during the event. Pre-event, a Luxury hotel in Rio cost approximately 3.2 times more than an Upscale hotel. Because of the higher growth on the low end and lower growth on the high end, during Rock in Rio that pricing premium shrinks, and a Luxury hotel room is only 2.4 times more than an Upscale room.

We’ve seen pricing in general become more dynamic over the years during the event. In 2015 and 2017, pricing was fairly stable across the week, with about a 25% difference between the lowest and highest priced days of the event. However, this has consistently grown each year of the event, up 71% in 2022 and 83% in 2024. Weekend peak rates were US$100 higher this year than the mid-week event rates.

Women’s World Cup (Colombia)

The 2024 FIFA U-20 Women’s World Cup was hosted in Colombia from 31 August through 22 September. The event took place in four venues and three cities across Colombia – Cali, Medellin, and Bogota (two venues).

Cali and Bogota both benefitted from hosting the event, with a 5% RevPAR gain in Bogota on game days, and nearly 25% RevPAR growth in Cali. However, performance in Medellin was lower than the previous year, with declines across all three KPIs. Markets across Colombia have shown declining occupancy this year. Medellin, while having the ?strongest growth in the metric of the three host cities, is the only city of the three to be experiencing ADR and RevPAR declines year to date. Though the city declined during the World Cup, those declines were not as severe as in other recent months.

Bogota is a great example of how hotel performance can vary during a tournament-style event. Often, the highest performance impacts of a tournament come in the early and late days of the event. At the beginning of a tournament, most teams are still participating, with those teams and support staff staying at hotels and filling those rooms. However, the final games of a tournament tend to get the most attention and coverage, bringing in perhaps a greater number of spectators or media.

We can see this dynamic play out in Bogota. During the Group Stage, 24 teams were participating across the three markets. Bogota saw its strongest occupancy growth during this period, supporting the idea that much of the demand was driven by the number of teams participating, as well as the number of games occurring. However, during the Third Place and Finals matches, Bogota did not see as strong of an occupancy lift, with much more of the impact driven by ADR. Fewer teams were left in the tournament, so there were less teams and support staff staying at hotels. However, since the finals bring the most spectator attention, there was more pricing power for the end of the event.

Overall, large-scale events tend to be a significant driver of performance, and can ultimately impact monthly, or even year-end, results. ?

Find additional global insights on our Hotel Industry Analysis page or sign up to receive our weekly Global Weekly Update in your inbox.