First time I lived through a major sporting event in a major American city was the 1984 LA Olympics. The hype was extraordinary, and the expectations were (understandably) that the city was going to get overwhelmed with all the visitors. People listed their homes for rent for outrageous amounts, hotels raised their rates through the roof, and everybody braced for the thundering hoards and the massive amounts of money flowing into the city.
Turned out to be just the opposite. There was, for the first time in modern history, no rush hour traffic for 2 weeks. You could go to just about any olympic event you wanted, restaurants had empty tables, and hotel rooms were even available. For me, it was the nicest 2 weeks that I lived in LA.
Now, fast forward 35 years or so to SF Bay Area and Super Bowl 50. So far, same thing as the LA Olympics. (see article pasted below). My best friend is seeing a play at ACT this evening (Union Square, so y'know, over run with tourists 3 days before the game, right?) Every restaurant he looked at when making reservations on Tuesday night had LOTS of tables available over a long period of time (I think he ended up booking Farallon).
This is EXACTLY the same thing that happened for America's Cup, which cost The City $11 million.
Now this. Another $5 million (or more) tossed into the pockets of one of America's richest corporations, the NFL.
It really does seem the only thing we truly learn from history is that it repeats itself.
Here's the link to the article in the Chronicle this morning about how this event is not meeting expectations for great wealth and riches:
Vacation rental market falls short of high hopes
By Carolyn Said
Kim Lain and Tom Doherty had high hopes for the Super Bowl. Their three-bedroom house is a 10-minute walk from Levi’s Stadium — so close that even a friend on crutches easily made the trek. They recently spent $50,000 on a major remodel, and can tick off luxury features like marble and hardwood floors, new landscaping, a surround-sound home theater system, commercial-grade kitchen appliances, and radiant-heat flooring.
They hoped to make $25,000 renting it for five nights via HomeAway/VRBO. But after listing it in December, they barely got a nibble. So they cut the price to $15,000 for the five nights — and are still seeking a renter for this weekend.
“It’s disappointing,” Lain said. “It’s not really worth it to us to rent for less than that because we’d have to relocate and clear out all our stuff.” They’re among scores of Bay Area homeowners who hoped to score riches by renting to Super Bowl visitors via Airbnb, HomeAway, Craigslist and other vacation-home sites. But the deluge of hopeful homeowners increased supply so much that it outpaced demand for the big weekend. The result is an Econ 101 lesson: Vacation-rental prices did not go through the roof.
“This isn’t a windfall for owners,” said Ian McHenry, co-founder and president of Beyond Pricing, which helps vacation-rental owners figure out what to charge. Some locals got overly optimistic about what the market would bear. “There is so much more supply that rates are pretty close to normal.”
Previous price spikes
Less-hyped big events in San Francisco like Salesforce’s Dreamforce conference and the Outside Lands music festival, by contrast, did result in desirable, well-located rentals getting up to triple normal rates because supply didn’t increase while demand skyrocketed, he said.
Beyond Pricing showed a 62 percent occupancy rate for two-bedroom Airbnb listings in San Francisco during the first weekend in February last year. For the same weekend this year, the occupancy rate is just 47 percent. Even though overall bookings have increased, the number of homes being offered has surged
more. When Dreamforce came to town in mid-September, the occupancy rate hit 75 percent.
Airbnb’s and HomeAway’s websites show hundreds of pricey rentals still available this weekend in Santa Clara, San Francisco and cities in between. Craigslist likewise is packed with locals offering to rent their pads for premium prices.
“It’s almost comedic to see all those thousand-dollar-a-night average suburban homes,” McHenry said.
Jen O’Neal, CEO and founder of Tripping.com , which does searches on multiple vacation-rental sites (other than Airbnb), said many owners may have been opportunistic.
“People are basically putting their wish list out there,” she said. “Hosts who ask for a lot of money just won’t get it.”
Tripping.com data shows Bay Area hosts asking an average $1,005 a night, 40 percent above normal. It doesn’t show what rates hosts actually scored, as bookings don’t happen on its site. The company said 38 percent of Bay Area rentals it tracks are booked for the weekend, as are 31 percent of those in Santa Clara.
Airbnb said some 4,000 listings throughout 40 Bay Area cities are booked for Super Bowl weekend, bringing in 15,000 guests. That’s double the region’s total guests at this time last year, according to the company.
But places are renting for an average nightly price of $225 — barely above normal. The company said more than 85 percent of Super Bowl bookings were for less than $300 a night.
“There are so many new listings that we’re not seeing people pay astronomical prices,” said Emily Benkert, founder and CEO of San Francisco’s Guesthop, which manages vacation rentals for owners. “The moral of the story is: The city’s been hyping this up so much that people will be a little disappointed.”
Another factor for people seeking a one-time bonanza: New listings without any reviews are less appealing to seasoned vacation-rental travelers.
High-end properties do best
Still, some properties commanded a premium. Benkert said the dozens of listings she manages in San Francisco did get booked, at prices up to 50 percent more than normal. The more luxurious the property, the bigger premium it could command.
For Airbnb and HomeAway, the big game brings in lots of new hosts, many of whom may stick around afterward.
“This time last year, Santa Clara had eight listings; now it has 150,” said Jon Gray, chief revenue officer of HomeAway/VRBO, which is now owned by travel giant Expedia. “Sunnyvale has 86 listings now versus 16 a year ago.”
HomeAway handles bookings for about half of its listings. Gray said those saw a spike in pricing but didn’t give specifics.
“People going to the Super Bowl are not super-budget-conscious,” he said.
But that fact may have worked against vacation rentals.
“If you spend $3,500 or more on a game ticket, you are looking for accommodations that fit that lifestyle,” McHenry said. “Paying $1,000 a night for the W (hotel) would be a drop in the bucket. But when the geophysicists come here for a conference, they’re more apt to say they want a $150 Airbnb instead of paying high hotel prices.”
And the greater Bay Area has plenty of hotel supply. While San Francisco has only 35,000 hotel rooms, there are another 30,000 on the Peninsula and in the South Bay and thousands more in the East Bay and elsewhere. That’s why there are still hotel rooms available for this weekend.
“Most hotels are running close to selling out, in general at prices double the same time last year,” said Rick Swig, a hotel consultant. “Some that tried to gouge did not, because customers didn’t choose to pay exorbitant rates.”
Carolyn Said is a San Francisco Chronicle staff writer. E-mail: firstname.lastname@example.org Twitter: @csaid