March Madness: the Redemption Tour
With an unfortunate buzzer beater ending loss to the Villanova Wildcats in 2016, the North Carolina Tar Heels were hungry for a redemption win as they stepped onto the court for this year’s 2017 March Madness Final Four.
March Madness is a three week tournament for collegiate basketball, ending with the final four and championship game. Looking at the men’s tournament for the past five years, we noticed a significant increase across the KPIs during a four day stretch from Friday, the night before the final four, through Monday, the night of the championship. The final games this year were held in Phoenix, AZ, with the championship result of a North Carolina victory over the Gonzaga Bulldogs.
The chart below shows the growth rates during the last six NCAA March Madness Finals Weekends. We aggregated the four days of the weekend (Friday-Monday) and compared that to a baseline of the average of every weekend (Friday – Monday) for the prior year.
AT&T Stadium, the site of the 2014 Final Four, is in the Fort Worth/Arlington Market which is also the stadium of the Dallas Cowboys. This has created a “Dallas Effect” where demand appears to be split between the aforementioned market and Dallas. To keep things consistent, we combined the Fort Worth/Arlington Market with the Dallas Market as one Market.
The average demand for the past 5 years has shown a 37% increase. Phoenix, AZ showed a smaller demand growth for this time frame having a 31% demand increase. Friday and Saturday for Phoenix showed roughly the same demand growth as the other markets, but it did not have the same pickup for Sunday and Monday.
We then calculated the difference in how much more revenue the Final Four weekend generated, compared to an average 4 day weekend. The average Final Four weekend performance from 2012-2016 achieved an increase of $19.5 million, ranging from $14.7 million to $23.0 million. This is a $4.9 million increase per day on average. Phoenix’s increased revenue is the most significant, bringing in an additional $25.9 million, which is almost $6.5 million a day over their typical Friday through Monday.
The North Carolina Tar Heels were not the only winners in the 2017 Men’s March Madness Tournament, as shown in the chart above, the Phoenix Market had a championship performance as well. Additionally, the average RevPAR increase in the other markets was a little over $68 during the final four weekend, whereas Phoenix attained just under a $100 increase. Although the Phoenix Market wasn’t the top host of the Final Four, they were still able to achieve a phenomenal four day weekend performance in 2017.