Factors Affecting the Price of Luxury Suites in Major North American Sports Facilities

in Journal of Sport Management

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Stephen L. ShapiroOld Dominion University

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Tim DeSchriverUniversity of Delaware

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Daniel A. RascherUniversity of San Francisco and SportsEconomics, LLC

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Luxury suites have become a key revenue source and an important element of sport facility design for professional sport organizations. There are a variety of factors influencing the pricing of luxury suites; however, the recent recession has impacted the premium seat sales market significantly. The current investigation was the first empirical examination of luxury suite pricing determinants for professional sport facilities. An economic model, utilizing multiple regression analysis, was constructed to examine the relationship between the current price of luxury suites for major North American professional sports facilities and selected demographic, economic, and team/facility/league-specific explanatory variables, in a uncertain economic climate. The final economic models were found to be significant, explaining 57% and 60% of the variability in luxury suite prices, respectively. Significant variables of interest included team performance and league affiliation, which had a positive influence and the number of competing venues, which had a negative influence on luxury suite prices. The current findings further the body of knowledge in the pricing of admissions to sporting events though the development of the first pricing determinants models for luxury suites, which take into consideration the tenuous economic environment.

Shapiro is with the Dept. of Human Movement Sciences, Sport Management Program, Old Dominion University, Norfolk, VA. DeSchriver is with Dept. of Business Administration, University of Delaware, Newark, DE. Rascher is with the Dept. of Sport Management, University of San Francisco, San Francisco, CA, and SportsEconomics, LLC, Emeryville, CA.

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