Curtis Baddeley from United Center in Chicago wraps up his panel at ALSD with moderator Adam Kellner, director of stadium Sales & Services, Chicago Bears, and Ryan Coyle from Olympia Entertainment - Detroit Red Wings. (VT Photo)
REPORTING FROM ORLANDO, FLA. — He’s not so naïve as to believe that winning the Stanley Cup didn’t help single-game suite sales soar this season. But Curtis Baddeley, senior director of rental suites at United Center in Chicago, said that besides having a great team on the ice, the home of the Blackhawks had a successful season of single-game suite rentals due to the implementation of dynamic pricing. During the “Packaging and Flexibility: What’s Selling?” panel at this year’s Association of Luxury Suite Directors Conference here, June 30-July 3, panelists discussed new strategies such as dynamic pricing for single-game suite rentals.
About 800 total attendees came to this year’s event — a number on par with the last few conferences. “This is a very good number because we are normally in cities with four major sports, where Orlando has one,” said ALSD Chairman Bill Dorsey. “I think, more importantly, is that this show had the most actual teams that we have ever had.”
Five teams spanning National Football League, National Hockey League, Major League Soccer, and Major League Baseball, took part in the panel. In the case of the Chicago Blackhawks, Baddeley said they implemented dynamic pricing because they were leaving money on the table for top-tier games. When it comes to the Detroit Red Wings at Joe Louis Arena, Ryan Coyle, Director of Premium Sales for team owner Olympia Entertainment, said that the shift came due to need.
“We did it out of pure desperation — it had nothing to do with revenue,” said Coyle. “It was literally a way to make ends meet in the beginning.”
This was the third season the Red Wings used a dynamic pricing model. In 2010, the building had about 30 open suites on a nightly basis, priced at approximately $4,000. To move inventory and create value in the building, the team made the decision to shift to a dynamic pricing model. They started selling 20-guest, premium suites at a price they hadn’t been sold at in 10 years — $1,000.
“The real worry was price integrity,” said Coyle. “If we start liquidating suites at $1,000 per night, are we ever going to get it back up to $4,000?”
After the first couple of months, the Red Wings had sold a number of suites and started pushing up the price. There was no firm strategy for price increases, instead relying on a ‘gut feel.’ The decision has been a huge revenue-driver and a catalyst for long-term suite leases.
“This year, we sold out every game and averaged about $5,000 per suite,” said Coyle, who added that they’ve sold suites as high as $8,000 per night and suite leases are higher than they’ve ever been. Single game suite rentals no longer start at $1,000.
The Chicago Blackhawks celebrate winning the Stanley Cup Final at United Center. (Photo by Chicago Blackhawks)
At the Chicago Blackhawks, the team put the focus on maximizing revenue. Though Baddeley would only say that the price for a 20-person rental suite during Game 7 of the Stanley Cup Finals was “astronomical,” he did reveal that prices during other playoff games reached $28,000.
“The market dictates that price point. Tickets were going for $3,500, so in order for us to maximize revenue, we had to keep up with that,” he said. “All it takes is one buyer for that last suite.”
Baddeley said that he spoke with Coyle before implementing dynamic pricing for rental suites this season, and came up with a tiered pricing system for 20-person suites on the Penthouse level. Baseline pricing started at $3,500 for preseason.
Primary suite pricing started at $4,750, bumping up to $5,750 with a top-tier price of $6,250. Those prices were published in the brochure, but changed based on availability.
“It’s reeducating the customer to create that sense of urgency — that’s the key element to this,” said Baddeley. “If you do it right, you’ve basically trained your customers to call you the minute the schedule is released to try to get that best price.”
Prices rose one-to-two tiers depending on availability and, in some cases, even higher. By the time the high-end games were nearly sold out, the Blackhawks were looking at renting suites at double or even triple the original price.
“It’s not a perfect system,” cautioned Baddeley. “It’s a game, and you have to play it to sort of feel your way through it” when it comes to pricing. Suites for Chicago Blackhawks game are all inclusive, and those for Detroit Red Wings also include VIP parking passes, a gift, and a food and beverage credit.
The Red Wings don’t begin renting suites for each game at the same baseline price, but each game still uses a dynamic model. Coyle said the game against the Toronto Maple Leafs will be huge this year, and he’d like to get to the point where suites rent at $12,000. However, he said if they start the game with 12 open suites, they’re not going to sell all 12 at $12,000, so instead they’ll dynamically price the game starting at a higher price point.
“Everything is dynamically priced, but bigger games will start at a much higher liquidation price,” Coyle said. “Our company hates the word ‘liquidation,’ so I’m trying to come up with something better.”
“’Firesale’ is another word we used,” he added. “That didn’t go over too well, either.”
Interviewed for this story: Curtis Baddeley, (312) 455-4119; Ryan Coyle, (313) 471-3208; Bill Dorsey, (513) 674-0555