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SBJ/Nov. 1, 2010/SBJ In-Depth
Trends and challenges
Published November 1, 2010
What trends are you watching in premium seating?
DENNIS MOORE: 1. Less corporate buyers and more personal buyers. Corporations are just starting to come back to the table, but the decisions involve a lot more research, justification, and understanding of the value proposition.
2. Consumers are laser focused on value. Entry-level price points for both suites and club seats are selling very well. The buyer is not concerned with sitting at the 50-yard line; they would rather pay less to sit in a seat that is off the yard lines.
3. One size does NOT fit all. The demand for premium products is still strong, but buyers are only willing to purchase exactly what they want or what fits their budget. That puts the pressure on teams to develop additional premium seating concepts that speak to specific client needs and budgets. Three years ago, we had three premium products to sell. Today, we actively market and sell over eight premium products. This trend will only continue.
CHAD ESTIS: Consolidation of inventory. We’re still seeing venues that aren’t that old take suites and turn them into clubs and also find ways to reduce club seat inventory. We are still all trying to find the right mix and percentage of total inventory that should be premium. How does technology continue to play a role? What new amenities can we create to continue to
FRANK HUBACH: Now more than ever we have to offer something other than a traditional club seat or luxury suite. It seems businesses want the exclusive way to entertain clients but in a setting that is less than a suite for 12-18 people. Dallas/Fort Worth companies are trying to be the most cost-effective/conservative with their hospitality spend, and we have to offer them more variety to keep their entertainment dollars coming to sports and entertainment facilities.
PETER LUUKKO: We continue to see larger publicly held companies continuing to renew their leases on premium seating. There has been some hesitation by some of the corporations that have been severely hit by the economic conditions. Smaller privately owned companies still see the value of sports hospitality and entertainment and continue to be very interested in leasing premium seating. The length of term needs to be customized to the company’s internal philosophy. We have been able to do some price adjustments in our single-event suites and club box seating based on the popularity of a show/concert/event.
JOHN WEBER: The overall amount of available inventory. Premium seating is a fantastic seat, as long as you have a correct number. Also, clearly pricing and location play into premium seating. We are fortunate — we designed our ballpark with 3,700 premium seats. Clearly our success has helped, but I believe 3,700 seats for our market is the correct number for the up-and-down nature of our business.
JENNIFER ARK: Flexibility is the key word in premium seating. I believe the trends will focus on loge boxes as well as spaces that have flexibility to accommodate groups of many sizes. Teams will need to be flexible in terms of contract lengths as well. Shorter terms seem to be key in many situations. We have hired two salespeople this season to help create the awareness about the suite inventory we have now.
What’s been the most difficult inventory to sell and how are you meeting that challenge?
ESTIS: It’s always the middle pricing tier of suites and the last 10 percent of any club program. We are meeting the challenge by casting a wider net and utilizing data from CRM to better target new prospects.
MOORE: The most difficult inventory to sell continues to be suites on a multiyear commitment. To counter these challenges, we have rebranded specific locations and redefined what it means to own a suite. Example: Prior to the 2010 season, we rebranded 13 executive suite locations to Legends Rooms. Previously, these executive suites held 15-17 people and sold for approximately $100,000 annually. Legends Rooms hold eight people, include a base food and beverage package, and sell for $48,000 annually. All 13 Legends Rooms are now sold on multiyear commitments. Legends Rooms are also stripped of the standard suite amenities, i.e. no trips, VIP parties, etc. Simply a great game-day experience.
HUBACH: Securing new/fresh long-term suite leases. [American Airlines Center/Center Operating Co.] has been more flexible with terms and had to cater to smaller packages while offering many of the same amenities we do for full-lease sales. Companies seem to be doing fewer events with a greater emphasis on ROI.
WEBER: Our challenge is to continue with excellent customer service — with our premium clients and with all of our clients. We want all of our clients to understand they are a key reason why we have been successful on the field.
What will premium spaces look like in 20 years?
LUUKKO: Club box seating and private luxury suites still have an appeal. We eventually see potential in renovating suites in the balcony levels to become a combination of a great view and a great experience for up to 100 persons, or possibly converting that space to become a nightclub or a specially themed, sponsorable destination.
MOORE: It would be tough to answer where I see premium seating in five years, let alone 20 years. But, in 20 years I see the convergence of “the team” and “the fan.” As teams continue to push the envelope with new ideas and ways to provide value, “inside access” will further become the norm. Premium fans will interact on a more intimate level with the teams they pay to watch.
ESTIS: Continue to provide customers with closer access to team activities, incredible use of technology and create spaces that are utilized well outside of event day.
STEVE SCHANWALD: Over the years, we have changed from full suites to offering daily rental suites to fractional [shared] suites to smaller all-inclusive premium products. In my opinion, the future premium seating will revolve around more all-inclusive, especially in the full and fractional executive suites.
Turnkey Sports Poll
The following are results of the Turnkey Sports Poll taken in October. The survey covered more than 1,100 senior-level sports industry executives spanning professional and college sports.