Australian Corporate Hospitality in Review Dr Stephen Dann (QUT) Dr Susan Dann (National Seniors) John Brown (Sparten)

Conceptual Framework Hospitality is seen as an opportunity for networking, negotiation, relationship building Occasionally – even entertainment value (The Economist, 1995; Gillis, 2004; Brooking, 2004; Bennett, 2003).

Hospitality is seen as an opportunity for

networking,

negotiation,

relationship building

Occasionally – even entertainment value

(The Economist, 1995; Gillis, 2004; Brooking, 2004; Bennett, 2003).

Conceptual Framework Role of hospitality blend of corporate communication brand building awareness generating relationship marketing role Bennett (2003)

Role of hospitality

blend of corporate communication

brand building

awareness generating

relationship marketing role

Bennett (2003)

Definitions corporate hospitality a sport event specific function, either exclusive or syndicated, which is organised by a clearly identifiable sport provider. exclusive hospitality the use of a facility such as a corporate suite or marquee by a single organisation or sponsor. syndicated hospitality single or multiple ticket packages in a single venue which is attended by multiple sponsors or organisations.

corporate hospitality

a sport event specific function, either exclusive or syndicated, which is organised by a clearly identifiable sport provider.

exclusive hospitality

the use of a facility such as a corporate suite or marquee by a single organisation or sponsor.

syndicated hospitality

single or multiple ticket packages in a single venue which is attended by multiple sponsors or organisations.

Market size Australian sport related corporate hospitality market has been estimated as being between $428 and $730 million (Sparten, 2004).

Australian sport related corporate hospitality market has been estimated as being between $428 and $730 million (Sparten, 2004).

Method Data was collected through a content analysis of brochures, websites and other corporate materials released by the key corporate hospitality providers.

Data was collected through a content analysis of brochures, websites and other corporate materials released by the key corporate hospitality providers.

Sample 1,035 packages 62 different providers Sports included Australian Football (AFL), Basketball, Cricket, Golf, Horse Racing (major events only), Motorsport (major events only), Rugby League, Rugby Union and Tennis

1,035 packages

62 different providers

Sports included

Australian Football (AFL), Basketball, Cricket, Golf, Horse Racing (major events only), Motorsport (major events only), Rugby League, Rugby Union and Tennis

Analysis Framework "corporate hospitality package" is not a single concept Package defined as Provided by the venue, original provider or the organisational body for which the original provider was employed/owned/affiliated Excluded resellers who purchased primary packages and on sold at a mark-up Involved a sporting activity

"corporate hospitality package" is not a single concept

Package defined as

Provided by the venue, original provider or the organisational body for which the original provider was employed/owned/affiliated

Excluded resellers who purchased primary packages and on sold at a mark-up

Involved a sporting activity

Results skewed distribution of hospitality packages Victoria (45%). NSW including the ACT (20%) Queensland (18%) Western Australia (10%) South Australia / NT (7%). 40% of packages were developed for events of international standing Australian component has international relevance

skewed distribution of hospitality packages

Victoria (45%).

NSW including the ACT (20%)

Queensland (18%)

Western Australia (10%)

South Australia / NT (7%).

40% of packages were developed for events of

international standing

Australian component has international relevance

Average Costs of Hospitality international event $22,300 for the package average $525 per person / session / game cost Australia specific event $17,500 for the package average $275 per person / session / game cost

international event

$22,300 for the package average

$525 per person / session / game cost

Australia specific event

$17,500 for the package average

$275 per person / session / game cost

Possible Case for Raising Prices Australian Open is approximately A$185 Cheapest at the US Open ~A$1,050. Final at Wimbledon is ~A$6,400 Final of the Australian Open is A$1,250.

Australian Open is approximately A$185

Cheapest at the US Open ~A$1,050.

Final at Wimbledon is ~A$6,400

Final of the Australian Open is A$1,250.

Price by Sport Motorsport had the highest Total Package Average (TPA) and Per Session Average (PSA) costs Highs and Lows Lowest overall - Tennis (TPA$5794, PSA$121), Lowest per session – Basketball (PSA$115, TPA$12800) Highest per session - Rugby Union (PSA $418, TPA $10,300)

Motorsport had the highest Total Package Average (TPA) and Per Session Average (PSA) costs

Highs and Lows

Lowest overall - Tennis (TPA$5794, PSA$121),

Lowest per session – Basketball (PSA$115, TPA$12800)

Highest per session - Rugby Union (PSA $418, TPA $10,300)

Football versus Football AFL Total Package Average $16500, Per Session Average $325 NRL Total Package Average $24500 Per Session Average $267

AFL

Total Package Average $16500,

Per Session Average $325

NRL

Total Package Average $24500

Per Session Average $267

Competition does not lower price Victoria 40% of the market TPA$25,337 and PSA$506. Non Victoria TPA$13,612 and PSA$273.

Victoria

40% of the market

TPA$25,337 and PSA$506.

Non Victoria

TPA$13,612 and PSA$273.

Victorian Pricing Possible causes international standard events tend to reflect international price points Grand Prix, Melbourne Cup, Tennis higher threshold of what is considered "acceptable" in terms of price very experienced in the use of corporate hospitality sport and club loyalty is very strong large number of AFL club packages AFL has a higher price point

Possible causes

international standard events tend to reflect international price points

Grand Prix, Melbourne Cup, Tennis

higher threshold of what is considered "acceptable" in terms of price

very experienced in the use of corporate hospitality

sport and club loyalty is very strong

large number of AFL club packages

AFL has a higher price point

Dimensions of Hospitality Duration, Price and Size

Table 1: Overview of Package Descriptions TPC - total package cost PSC - per person, per session cost $375 $537 $1039 $5600 $2750 PSC (upper) $167 $215 $243 $744 $336 PSC (mid) $5 $54 $22.50 $40 $30 PSC (low) $88000 $106015 $172454 $1200000** $57000 TPC (upper) $17397 $19821 $11465 $40172 $4988 TPC (mid) $160 $480 $180 $162 $125 TPC (low) 8.8% 19.8% 19.2% 24.1% 22.9% Percent* 57 240 221 249 237 N= 15 11-12 6-7 2-4 1 Days Kitchen Sink Full Season Short Season Event Single

Table 1: Overview of Package Descriptions Melbourne (59%) Melbourne (24%) Sydney (21%) Brisbane (25%) Sydney (23.5%) Melbourne (69%) Melbourne (50%) Location Summer (91%) Winter (83.8% Summer (58.4%) Winter (33%) Winter (50%) Season Basketball / Tennis (45%) AFL (55%) Cricket (56%) Motorsport (36.5%) Horse Racing (35%) Common Sport 2 8-12 8-12 32 15-20 Guest (average) 16 28 130 240 200 Guest (upper) Kitchen Sink Full Season Short Season Event Single

Conclusions Corporate hospitality has established itself as a major business to business marketing tool in Australia yet it remains under researched Further studies needed determine trends in package sizes, costs and dominance of different markets and sports expand the study into the areas of non-sport hospitality and reseller packages

Corporate hospitality has established itself as a major business to business marketing tool in Australia yet it remains under researched

Further studies needed

determine trends in package sizes, costs and dominance of different markets and sports

expand the study into the areas of non-sport hospitality and reseller packages