NCAA Vs Pecan Growers

“That’s just crazy,” said Warren Calipari, the new FOM at the 400-room Courtyard Plaza hotel. “Of course we should hold all the rooms for transient. I was in Houston in 2011 when they hosted the NCAA finals. I saw the ADRs we ran. I don’t think you understand basketball!”

“I understand basketball, but I don’t think you understand this hotel or this customer,” replied Andrea Stidham, the hotel’s DOSM.

Warren and Andrea were discussing the NCAA’s recently announced selection of their city as the site for a future NCAA’s Final Four men’s basketball championship tournament.

“We need to block the rooms for those dates now,” continued Warren, “and put at least a four-day MLOS on them. Everything we have should be sold as transient. With this tournament in town we’ll sell out easily.”

“I already told you, that’s the same weekend as the Pecan Growers annual conference.

They have been coming to this property on that weekend for the past eight years. They take 85 percent of our rooms for three days. They have contracts in place now for the next two years. Each year when their conference is over they come in and extend their contract for another year. That way they always stay booked two years out. The men’s basketball final is three years out, but it falls on the same dates they will be requesting for that year,” replied Andrea.

“That’s great. They don’t have a contract in place for the rooms right now. That means we can hold all of our rooms for the NCAA tournament. Your group should have booked further out. Just tell them you are sorry. You know Andrea, in this business, if you snooze you lose. How can you turn down a sell-out weekend at double our rack rate?” said Warren.

  • Assume you were the decision-making RM at the Courtyard Plaza. Would you agree to block the rooms for transient sales as Warren suggests, or would you follow Andrea’s advice?
  • Assume you were the executive director of the Pecan Growers Association. What do you think your reaction would be if you were told you needed to move your conference due to the NCAA tournament?
  • Is this a revenue management challenge that is best addressed with a revenue displacement analysis? Explain your answer.