According to the 2015-2016 Association of Luxury Suite Directors membership survey, long-term suite leases continue to be challenging for venues to renew in 2016. A number of suite sales departments noted that many of their clients were either not renewing their luxury suite leases or were opting for shorter lease durations. Here are the top 5 factors impacting suite renewals, straight from the teams and venues:
Top 5 Factors Affecting Suite Renewals:
1. Team Performance
Team performance trumped all other factors in the challenge of luxury suite renewals. The majority of venues chalked the lack of continued commitment up to their residing team’s under-performance and continued failure to make the playoffs. Suite owners did not see their lease as a savvy investment if it didn’t include a competitive, fruitful season and a ticket to the playoffs, as it makes it harder to get people to accept invitations to the suite .
2. Oil and Gas market
In certain markets, many of the former suite clients were oil and gas companies that were thriving at the time of committing to a suite lease. Because of the frequent instability of the oil and gas market, many of these clients either went bankrupt or were left on the verge of bankruptcy and therefore are not renew their leases when the time comes.
3. Decreased Entertainment Budget
Many businesses, when asked about their decision not to renew their suite lease, pointed to a reallocation of funds. This restructuring of their budget led to investing less in entertainment. Because of a cut in their entertainment budget, they were not able to commit to a multi-year, escalating cost lease.
4. The Economy
Many of the suite sales departments at popular venues named the overall economy as the main culprit in the decrease of suite renewals. That may encompass the oil and gas markets as well as a decrease in entertainment budget but may also point to an overall lack of disposable income by businesses.
5. Length and price of contracts
Some suite owners were unhappy with the business model of the venue as it pertains to luxury suites. Many venues were forced to lower prices or lessen lease terms in order to attract renewals. In addition, most suite leases include escalators, meaning the longer you are in your lease, the higher the annual cost. Many luxury suite departments had to decrease escalators or banish them altogether.
SuiteHop Can Help
Venues that allow subletting have a great deal to gain by recommending that at-risk suite owners partner with SuiteHop to add value to their excess inventory. We help suite owners make the most of their suite investment, allowing them to continue their leases despite a downturn in economy or decrease in budget. And, while we have no control over the team’s performance, we’re certain that a seat in a suite is a good time, win or lose!
Some of the Other Benefits of SuiteHop:
- Listing is ALWAYS FREE!
- Control your listings, including availability.
- Flexibility to list suites as private or individual seats in a suite.
- Set your asking price and receive that entire amount when suites sell.
- List exact suite location or by zone, according to your privacy needs.
- Our team qualifies the buyers and handles 100% of the customer service
- We provide dedicated marketing and advertising at no additional cost
- Complementary single event insurance covering general liability & liquor liability for all suites sold.
Are you a suite owner looking to add value to your investment? Visit www.suitehop.com/sell-your-suite or contact our suite experts online at email@example.com or by phone at 1-844-SuiteHop to learn more.