Sports Business

Final 4 lodging scarce: 7 months before event, brokers lock up rooms

September 12, 2005

Basketball fans hoping to catch the action at next spring's NCAA men's Final Four in Indianapolis are more likely to score decent tickets than they are a downtown hotel room, though neither will come cheap.

As the event has moved from fan-centric to corporate, the demand and price for hotel rooms has reached new highs.

And the hotel room supply for Final Fours held locally is likely to tighten as NCAA officials push for larger Final Four venues-such as the 63,000-seat retractable-roof stadium being planned for the southern edge of downtown. A little more than 43,000 people are expected to fill the RCA Dome March 31 to April 3 and many of the area's 28,000 hotel rooms from Carmel to Greenwood are already booked.

"The demand is tremendous," said Marie Alexander, director of sales and marketing for Hilton Hotels Indianapolis. "We're already sold out for the Final Four, and we don't even keep a waiting list because it would just be too long."

"The demand is already spreading well beyond downtown," said Mark Prince, general manager for Indianapolis Marriott Downtown, which has sold out its 615 rooms for the Final Four weekend. "It would be difficult to say what would happen if the crowds swelled much bigger."

Some event organizers blame the constricting hotel market on ticket brokers who snap up blocks of hotel rooms to package with tickets and sell at increased prices.

Two tickets and a room at a four-star hotel close to the RCA Dome, where the games are played, are listed for $16,057 on the Internet.

It's not just glitzy downtown digs that are bringing in big bucks. Three nights at the Hampton Inn on the city's far-south side, along with two tickets in an unspecified location for the semifinals and finals, are selling for $5,700. That same hotel room usually sells for $89 a night and a ticket at face value would be no more than $140 for the three games.

"The thing that has really accelerated this and magnified this situation is the Internet," said Robert Jones, owner of locally based A Great Seat Co. Inc. "It seems everyone is getting involved in this now, and tying to make a big profit. A lot of ticket brokers are being forced to buy on the secondary market, and that seriously cuts into our profits."

Scalpers are making up for it by reselling hotel rooms at bigger mark ups.

Hotel managers admit they sell rooms to travel agents and others who repackage and resell the rooms, adding that once rooms are paid for, it's difficult to control the secondary market.

Packaging the hotel rooms with indemand tickets is the critical element in sending prices 10 to 20 times higher than normal.

"These [ticket] scalpers have every method imaginable to get these tickets, and now they're buying up hotel rooms and tightening up this already tight market," said Milton Thompson, board member for the Indiana Sports Corp., which helps organize the event, and president of Grand Slam Cos., a local sports marketing c o n s u l t a n cy. "They've found a way to make a lucrative business even more lucrative."

National brokers muscle in

It's not just the local brokers who swoop in to make a profit on the Final Four. Agencies such as North Carolinabased Premiere Sports Travel, New Yorkbased TSE Sports & Entertainment and Beverly Hills-based RazorGator began buying up blocks of local hotel rooms years out.

"As soon as the bid goes out, we're scouting the area and buying hotel rooms," said David Lord, CEO of Razor-Gator, one of the nation's largest ticket brokers.

Lord boasts that no ticket broker will sell more NCAA Final Four tickets than his firm, adding that selling travel packages is part of his company's heritage.

"We do this as a service to our clients," Lord said. "We're not in the exorbitant mark-up business. We're living on margins of 25 percent."

But Lord said there are many "mom and pop" ticket brokers and independent entrepreneurs who buy up hotel rooms and sell them to the highest bidder.

Dave Brusslan, owner of locally based Preferred Tickets, said he and other ticket brokers are merely meeting a demand, a demand that has skyrocketed in the last five to 10 years.

"The Final Four is now an event that parallels the Super Bowl, World Series and The Master's," Brusslan said. "When we were selling to just fans, demand for tickets and other accommodations was much lower, and so were the prices. We didn't create the situation. We're just meeting the demand of our clients."

Corporate crowd ups demand

Because so many Final Four ticket buyers are from out of state, Brusslan said, hotel demand is often greater than larger local events such as the Indianapolis 500 and Brickyard 400.

And, because Final Four tickets are more scarce than for most other events, ticket scalpers have a ready market for their offerings.

"People come to us looking for tickets," Lord said. "It just so happens, they also need a place to stay."

Other corporate representatives come to town with no intention of attending the games and further tighten the hotel market.

"There are so many contacts to make during the Final Four in the sports and entertainment industry," Thompson said. "A lot of people feel they can't afford not to come."

Bob Schultz, of the Indianapolis Convention & Visitors Association, said new hotels are being added to the local market.

"We have had more than 1,000 hotel rooms added since 2000," Schultz said. "Inventory is definitely going up, and I feel good about our capacity."

Brokers said demand-especially on the high end-is outpacing supply. Hotel rooms that normally cost $240 a night are now being listed by ticket brokers and travel firms at more than $4,000 per night for Final Four weekend.

Skirting anti-scalping laws

Thompson said packaging hotel rooms with tickets is one way to get around local anti-scalping laws.

Following the 1997 men's Final Four in Indianapolis, NCAA officials made it known that cities that cracked down on scalping would have a better chance of winning future Final Fours.

Indianapolis responded by passing an ordinance forbidding the sale of a Final Four ticket for more than $10 over face value. Face values for this year's threegame Final Four package range from $110 to $140.

"Some would say [packaging hotel rooms with tickets] is a pretty ingenious strategy, just good old American commerce," Thompson said. "Essentially, the NCAA has created a monopoly on college basketball and really pushed demand."

The market for tickets and hotel rooms is complicated by multiple release dates of tickets. About 20 percent of the tickets are dispersed through a public lottery held in July and announced in August.

Blocks of about 4,500 tickets are held for each of the four participating schools. Those are released only six days before the event after the participants are set. Many of those tickets go to wealthy alumni-eager to find plush hotel accommodations, or to students, some of whom use ticket brokers to resell tickets at a profit. Brokers said customers with corporate ties are waiting in the wings for those tickets.

While NCAA officials insist they want to retain the grass-roots feel of the event, ticket brokers locally and nationally said corporate attendance at the event has risen about 30 percent in less than 10 years. Brokers estimate that attendees with corporate ties now account for more than 55 percent of the crowd.

"The demand for Final Four tickets soared when this event went corporate," RazorGator's Lord said. "Corporate interests are the ones that can really afford to push the price, and they want more than tickets."
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