The first luxury suite was built in 1968 in the Houston Astrodome, a building visible from space and known as the 8th Wonder of the World. It set the stage for an arms race to build bigger and better stadiums all across America. Today, the premium seating industry – consisting of club seats and luxury suites for sporting events and concerts – is a driving force behind the growth in the live event industry. Premium seats often account for less than 20% of the seats in a venue, but they usually generate over 50% of the ticketing revenue. When a new stadium is built, the guaranteed income from the long-term suite leases give bankers the confidence to make the large loans necessary to finance the stadium.
I’m fresh off dozens of meetings at the Association of Luxury Suite Directors annual conference. Here are the top 3 trends I heard at the show:
Teams and venues keep upping their game with technology and building design – the in-stadium fan experience has never been better. The Teams understand that the experience in your living room is more compelling with each passing year. That’s why they are designing stadiums to give you things you just can’t get at home. At AT&T Stadium, for example, guests in the Field Suites can stand just feet away as the players enter and exit the field. Some suite owners get to park their car underneath the stadium and take an elevator directly to their suite level. And if you thought you had a big TV at home, fans at the game can watch replays on the center-hung video board spanning 72 feet high by 160 feet wide. That’s hard to replicate in your living room. In addition, teams are leaning on third-party vendors to provide an added WOW factor in the suites. For example, suites at Churchill Downs feature Monsieur machines, a robotic bartender designed to mix you a perfect cocktail. If you get hungry in a suite during a Minnesota Wild game at Xcel Energy Center, ordering food is as simple as a few clicks on an an in-suite tablet, powered by Bypass. The Internet of Things just might have a bigger impact on luxury suites than on your living room.
Convergence of Primary ad Secondary Markets for Luxury Suites
The primary and secondary markets for tickets have converged; suites are next. TicketMaster now runs its own fan-to-fan resale marketplaces. StubHub’s name will be on the Jersey of the 76ers next year. Large brokers like Ticket Galaxy, DTI, and Dynasty have aligned closely with Teams to control secondary resale and they are sharing the data they collect with their Teams counterparts. That same level of collaboration isn’t yet happening between the primary and secondary suite market, but having a liquid secondary market for suites is good for teams (easier to sell and renew leases, more F&B revenue, fewer dark suites), and it’s great for the suite owners (higher ROI on their suite investment). Data from InviteManager shows that leased suites go unused or misused 43% of the time. That number will drop as Teams begin to collaborate with the secondary suite players to provide solutions to leaseholders looking to maximize the ROI on their multi-year investment.
Impact of Virtual Reality
The post-venue world is closer than you think. Ok, maybe that headline is a bit dramatic – the game will always need to be played somewhere, after-all. But if you listen to Andy Dolich and Wes Burtner from VHere, they make a compelling case for how VR can bring fans to places they could only dream of before. What if you could listen to Aaron Rodgers pump-up his team before taking the field, or be in the locker room for a championship celebration? Virtual Reality has the potential to put the fans right in the middle of the action from thousands of miles away.
How will the teams continue to innovate their most premium experiences? Touch-screen walls in the suite to monitor your fantasy team? In-suite VR headsets for a window into the home team locker room at halftime? Even more on-demand suite catering options at your fingertips? One thing is for certain: the best is yet to come in the world of premium seating.