No matter how hard times are, the corporate hospitality packages provided by Twickenham during major rugby events always sell out. And they are not cheap: an average package costs &£500 per person, plus VAT.
There is no doubt that major sporting venues are in a class of their own when it comes to an ability to pull the punters in. When companies want to treat their most important clients, tickets to a top sporting fixture always go down well.
A few years ago, according to event organisers, clients would pay whatever it took for corporate hospitality packages at certain sporting venues. Now, however, they are looking more closely at what they get for their money and asking whether they could get a better return on their investment elsewhere.
At the British Grand Prix last month, where prices range from &£300 to &£1,300 a person, hospitality packages did not sell out. And, although the Grand Prix has suffered bad publicity in the past few years – the date of the 2000 race was changed, and there have been severe traffic problems getting to and from the site – it is unusual that such a popular event was not sold out.
Mark Butler Associates group managing director Mark Butler believes that some sporting venues are not fully awake to the competition they face and are pricing themselves too highly.
He says: “Motor racing, generally, is phenomenally expensive and some of the Grand Prix packages were overpriced. They need to be more aware of what the market is prepared to pay.
“A few of the London football clubs have also been too highly priced in the past. However, I’m sure that this season, prices will be more reasonable. They must be aware that they won’t sell as many packages as in previous years if they keep their prices so high.”
But the fact remains that both football and motor racing are very expensive sports to run. Football clubs spend millions of pounds on salaries alone and motor racing costs huge amounts to stage. And although much money is made from sponsorship, corporate hospitality remains a very important revenue stream.
Horseracing is another spectator event that does well out of corporate hospitality, but again Butler believes some tracks need to be more careful about their prices: “Generally, horseracing is good value when it comes to hospitality – except for the major meetings, where packages sometimes cost three times what they would on a normal day of racing.”
It seems that sporting venues are not resting on their laurels, however, and many are making sure that they are able to offer the same quality of facilities that non-sporting venues do.
Skybridge account director Sam Howes says: “Sporting venues such as Ascot, Chelsea Village and the Reebok Stadium in Bolton are positioning themselves as conference venues in addition to their traditional roles. Large investments are being made in conference and meeting facilities.”
Sports facilities have to compete with a wide range of other venues, from the unusual (Skybridge has signed a deal with Endemol UK and Elstree Film & Television Studios to launch the Big Brother house as an events venue) to the highbrow – theatre and the arts are becoming increasingly popular hospitality options, being cheaper and more flexible.
Butler says that the spread of his business reflects changing trends: “Five years ago, 80 per cent of our business was in sport. Now it’s 50 per cent, with the other half being arts and theatre.”
The downside of arts and theatre hospitality, however, is that it is predominantly London-based. This is not the case with sporting venues.
It is not only the obvious sports that offer hospitality packages. Earls Court hosts a number of sporting events, including snooker, wrestling, boxing, table tennis and ice-skating, all of which provide hospitality opportunities. Earl’s Court senior communications marketing manager Julie Warren says that if people are interested in sport, they generally don’t mind what event they attend, as long as it is a sporting one: “Certain audiences are only interested in particular sports, but our research shows that the majority of people like a number of different sports.”
She adds: “I don’t believe there is a particular gender bias either. I went to Audley Harrison’s debut professional fight, and there were a lot of women there.”
But although Earl’s Court does well out of sporting events, it does seem as if purpose-built sports venues hold a particular allure. Sporting venues are often used by event organisers out of season and it is the kudos attached to a particular venue that draws the crowds.
All you need is the idea
EventWise managing director Penny Ellis says that the connection with a particular sport or game is what appeals to many people – even if the function is not connected to a specific event. As an example, she cites the Long Room at Lord’s cricket ground, which can be used to hold dinners.
Howes agrees, saying: “The benefit sporting venues have over other unusual venues is the associations between sporting and commercial achievement, as well as the chance for delegates to see behind the scenes.
“Sporting venues also benefit from ease of access, purpose-built space and the motivational appeal of attending a conference at a sporting location. The downside to most sporting venues is that they struggle to cater for very large groups, due to the fact that most meeting space is built into the stands, resulting in long, narrow function space with low ceiling heights.
“While sporting venues do not tend to offer the infrastructure of a traditional conference hotel, they do provide value for money and a unique environment.”
In the current climate, no matter how popular they prove to be, sporting venues will have to be competitive if they want to maximise hospitality revenue.
Butler believes that one of the biggest changes to take place in hospitality during the next few years will be a growing awareness by sporting venues that clients have a wide choice of alternative events and venues.
He says: “Corporate hospitality clients are much more aware of what is available and don’t automatically go for the major venues or events. Despite the downturn, clients are still buying hospitality, but they are looking much harder at their budgets and choosing events more carefully.”
Ellis says people are cutting back on hospitality expenditure and as a result are looking around for better value: “They want to spend less money, or they decide to entertain fewer people but provide them with something really special.”
The odds are against
A number of issues, then, face sporting venues: the prices they charge; the competition they face from an increasing variety of venues; and, perhaps most importantly, the lack of flexibility in the hospitality packages they provide. Packages may have a range of prices, but the formula is always exactly the same – a box or marquee overlooking the event.
Howes says: “We have found that clients are now looking for more unusual, interactive experiences rather than the passive experiences offered by the more traditional hospitality events such as rugby and motor racing.
“Also, hospitality providers’ target markets are no longer male-dominated. Sporting events such as rugby, motor racing and cricket have been replaced by events with a much wider appeal such as sailing, ‘one off’ concerts, film premieres and classic car racing.”
This may all be true, but it is unlikely that the Six Nations Rugby tournament is ever likely to have spare capacity at any of its games. Some events will always be popular.