The impact of the Web Summit on hotel performance, the case of Lisbon

Abstract

Dynamic pricing is a response to fluctuations in demand for a product or service making it possible for hospitality companies to have a better performance. Demand generators such as events have a heavy impact in hospitality performance because they create demand that otherwise would not occur. Portugal has seen an exponential growth in tourism in the past years and major events play an important role in investment decisions, both private and governmental. The Web Summit is an annual technology event held in November. Lisbon has been the chosen city for the past three years, 2019 making it the fourth.Literature has focused its attention mostly on the impact of cultural or sports events, such as the Olympics, revealing positive long-term impacts on performance. It is fundamental to understand what the exact impact of these type of events -business fairs -have in the local economy in order to justify investments.Methodology: daily data collected from STR allow for a comparative study between hotel performance before and after the Web Summit. We compare the 3 years prior to the event and the last three years of the event, taking place in Lisbon. The sample size is 63 hospitality companies that range from Economy to Upper Midscale Class and data of ARD, RevPAR and Occupancy.Results show that on the dates of the event ADR and RevPAR increase 115% and occupancy 21% when compared to the previous year. However, on the third year of the event, 2018, these numbers do not see the same increase and remain somewhat similar to the previous year, 2017. This shows that there is major impact on hotel performance justifying the interest governments and other tourism agencies have in attracting these types of events.

The influence of Web Summit attendees' age and length of stay on leisure activity preferences and city image

“…Web Summit lasts four days, is held in November and “brings together the people and companies redefining the global tech industry” (Cosgrave, 2018). The event is strategically held in November, a low seasonal time for the city of Lisbon, with lower occupancy and lower prices which means that during the days before and before the event, hotel occupancy rates rise exponentially, as does revenue per available room (Bento et al ., 2021). The Portuguese government decided to support Web Summit coming to Portugal and it will continue to do so by investing 11 million Euros per year until 2028 (Amorim et al ., 2018).…”

The value of revenue management and pricing in a challenging environment

“…The research identifies how customer satisfaction through customized offers and improves pricing decisions through more granular willingness-to-pay estimation. Bento et al ( 2021 ) paper examines the impact of a mega business event—the Web Summit—on local hotels’ key performance indicators, thus showing that there is a major impact on hotel performance justifying the interest governments and other tourism agencies have in attracting these types of events.…”