the business of sports hospitality

THE BUSINESS OF SPORTS HOSPITALITY

THE “RETURN ON OBJECTIVE” OPPORTUNITY THAT SPORTS HOSPITALITY PRESENTS.

CONTENTS

1. Background

2. Research purpose

3. Methodology

4. Results

5. Implications

6. About

1. BACKGROUNDIn December 2013, the official hospitality provider for Rugby World Cup 2015, Rugby Travel & Hospitality Ltd (RTH), appointed YouGov / SMG, a research agency, to undertake a project whereby the benefits of sports hospitality and in particular rugby hospitality could be measured against qualitative marketing metrics.

The sports hospitality industry as a whole understands the intrinsic value of hospitality for both companies that are both purchasers and receivers. Rugby Travel and Hospitality Ltd along with group company partner Prestige Ticketing Limited have strong heritage and history in the hospitality sector, delivering successful programmes for Rugby World Cup 2007, 2011 and the Olympics. We have collected positive sound bites and feedback from attendees at our events for nearly a decade but it has always been our ambition to accurately measure the benefits of hospitality for businesses. In a modern, financially accountable business climate where businesses are more focussed than ever on return of investment, we set out to identify a clear measure of return on objective for companies that buy or attend hospitality.

The results made for compelling reading, with some long held suspicions confirmed and some surprising results surfacing in regards to brand loyalty and the effectiveness of hospitality when compared to other marketing initiatives.

The purpose of this project and indeed this report is not to try and reinvent the hospitality industry. It is our first step in putting some solid data behind an opinion. We started with a fairly broad view across sports hospitality as a marketing and business development channel and then applied that to Rugby specifically and ultimately to Rugby World Cup 2015 hospitality.

At a macro level, the report results were very positive for the sports hospitality industry with strong evidence from our responders that sports hospitality can augment and enhance business development and relationship management for new and existing clients across all industries and sectors.

2. RESEARCH METHODOLOGYIn December 2013, the official hospitality provider for Rugby World Cup 2015, Rugby Travel & Hospitality Ltd (RTH), appointed YouGov / SMG, a research agency, to undertake a project whereby the benefits of sports hospitality and in particular rugby hospitality could be measured against qualitative marketing metrics.

This study was undertaken by SMG / YouGov. It was determined that an online survey would be the most effective way to speak directly to a time poor audience and would enable us to collect honest and open opinions from a total of 500 UK companies (x250 Buyers and x250 Receivers).

We elected to sample the views of corporate hospitality purchasers and receivers of hospitality who had participated in this activity in the past 12 months. In order to achieve this, the survey was split into the two groups with quotas on company turnover and business industry sectors applied.

Buyers and Receivers of corporate hospitality were asked to measure corporate hospitality and other marketing tools against the following metrics. These metrics were chosen as the most measured and most sought after objectives when undertaking key marketing and business development initiatives:

• Business Relations Improved personal relationships between your business and your clients

• Brand Value Increased brand value amongst your clients

• Brand Loyalty Increased brand loyalty from your clients

• Business Spend Increased spend on your services from your clients

• Recommendation Increased likelihood your clients will recommend you to others

Corporate Hospitality Buyers

Sample 250

Criteria- Turnover £5 million- +1 Emplo

50 in Financial Sector

75 in Business Sector

125 in sectors that purchase corporate hospitality

Corporate Hospitality Receivers

50 in Financial Sector

75 in Business Sector

125 in sectors that purchase corporate hospitality

Sample 250

Criteria- Turnover £5 million- +1 Employee- Public sector screened out

250 UK Companies

250 UK Companies

3. RESEARCH RESULTSThe first step in our study was to develop an understanding of the sports hospitality market in general and how these events worked for business from a marketing perspective. 3.1 Corporate Hospitality and International Rugby Union matchesAs part of our survey we asked RECEIVERS of corporate hospitality:

Which marketing tool is most effective for businesses at driving brand metrics?UK senior managers stated that of the marketing tools at a business disposal, the following activities achieved a rating of ‘very or quite effective’:

The results were resoundingly positive for Corporate Hospitality, with it out performing all other marketing activity for key marketing objectives like increasing brand loyalty, recommendations and brand value.

83%

57%

40%

70%

37%52%

IMPROVING BUSINESS RELATIONS

INCREASING BRAND LOYALTY

INCREASING RECOMMENDATIONS

INCREASING BRAND VALUE

INCREASING BUSINESS SPEND

69%

39%44%

68%

37%61%

63%

38%47%

advertising, online and print

telephone calls

corporate hospitality

3.1 Corporate Hospitality and International Rugby Union matchesWe then asked BUYERS of corporate hospitality specifically about Rugby Union:

How effective is corporate hospitality for buyers of corporate hospitality at international rugby union matches?UK buyers of hospitality, when asked, stated that the corporate hospitality at international rugby union was ‘very or quite effective’ at:

As has been the perception at the outset of our research, “Improving business relations” is easily the most effective role of hospitality. Being able to spend quality face time with your most valued clients is the best way to improve your relationship and drive increased loyalty and consideration.

After establishing that hospitality delivers Improved Business Relations we decided to delve deeper into the audience experience and see if there was any preference towards a specific type of sport hospitality that they would consider purchasing over the next 12 months.

At which of the following events would you consider purchasing corporate hospitality for a client?

International Rugby Union matches were by far the most popular hospitality purchase with 41% of responders indicating their interest in purchasing hospitality for this type of sport in the next 12 months.

89%IMPROVING BUSINESS RELATIONS

INCREASING RECOMMENDATIONS




59%

57%

52%

50%

41%INTERNATIONAL RUGBY UNION

CLUB FOOTBALL MATCH

INTERNATIONAL FOOTBALL MATCH

HORSE RACING

TENNIS

36%

24%

22%

20%

3.2 Corporate Hospitality at RWC2015After the strong results in favour of hospitality, and Rugby in particular, we asked our audience specifically about their opinion on Rugby World Cup 2015 Official Hospitality. The same sample was used across both Receivers and Buyers of hospitality, and the questionnaire focussed on the benefits of hospitality from

a marketing objectives perspective.

How effective would corporate hospitality would be for buyers of RWC 2015 corporate hospitality?UK buyers of hospitality when asked stated that the corporate hospitality at international rugby union was ‘very or quite effective’ at:

How effective do you think purchasing corporate hospitality for the RWC 2015 will be? UK buyers of hospitality stated that the corporate hospitality at RWC 2015 would

be ‘very or quite effective’ at achieving the following marketing objectives:

International Rugby Union matches were by far the most popular hospitality purchase with 41% of responders indicating their interest in purchasing hospitality for this type of sport in the next 12 months.



INCREASING RECOMMENDATION



86%

83%

82%

71%





INCREASING RECOMMENDATION

64%

61%

57%

56%

4. WHAT DOES THIS MEAN FOR SPORTS HOSPITALITYThe benefits of sports hospitality for both audiences that buy and receive the experience is clear. Selecting the right event and matching this to an audience offers brands the chance to spend quality face time with new and existing clients and develop stronger relationships against the backdrop of world class sport with first class service.

According to our audience, what is most important is the ability for Sports Hospitality to deliver a “Return on Objective” and not just a “Return on investment”. Many of the benefits of sports hospitality cannot be measured in a simple calculation of investment vs revenue generated. It is important to be aware of the qualitative measurement of activities like sports hospitality. The measures that seem to resonate with survey participants include both branding and positive sentiment, which according to our research are affected greatly by sports hospitality and in particular Rugby hospitality. The ability to spend up to six hours with your most important clients, at the biggest sporting events in the finest hospitality experiences should not be underestimated.

5. ABOUTRugby Travel & Hospitality Ltd is the exclusive provider of official hospitality for Rugby World Cup 2015 TM© RWC Ltd 1986

SMG Insight is an independent research consultancy specialising in the business of sports and sponsorship fields. The company has many years of experience of working in the rights marketing environment, and in the development and application of sponsorship valuation models.No part of this document may be copied or distributed in any form or by any means, including photocopying and e-mail, without the prior written permission of SMG Insight Limited. Written permission must be obtained before any part of the report is stored on any retrieval system. All rights of publication are solely reserved by SMG Insight Limited.

The opinions, conclusions, projections, evaluations and estimates in this report are based on more than 40 years of experience in the media, sports and lifestyle research industry. However, whilst great care has been taken in the preparation of this document, SMG Insight cannot guarantee the accuracy of the information contained herein and disclaims all liability for any loss or damage from reliance there upon.