2019: a record year
Downtown Indianapolis saw record visits in 2019, led by the city’s impressive calendar of national conventions and major sporting events. The award-winning Indianapolis Convention Center (ICC), with 749,000 square feet of exhibition space and twelve interconnected hotels, hosts several national conventions, exhibitions, and events each year. Lucas Oil Stadium (LOS) is located next to the ICC and is a multi-purpose stadium with a retractable roof and 67,000 seats that is home to the NFL’s Indianapolis Colts. Major citywide conventions in 2019 included GenCon, the Indiana Comic Convention, FDIC International, the Performance Racing Industry Trade Show, and the National FFA Convention & Expo. Indy is known as the “Amateur Sports Capital of the World” and annually hosts the Big Ten Football Championship Game as well as numerous youth and university sports tournaments. Professional sports are also rampant in Indianapolis with the NFL Scouting Combine and the Indianapolis 500, the world’s largest one-day sporting event. Overall, the city’s state-of-the-art facilities helped draw more than 29.2 million visitors to Indianapolis in 2019. These visitors booked over two million hotel stays downtown and 7.94 million across the metropolitan area, speaking to the far-reaching economic ripple effect of Indy’s visit to the area. Overall, this attendance record helped generate over $ 5.5 billion in visitor spending for the greater Indianapolis area.
Last year was set to be another record-breaking year for downtown Indianapolis. However, the outbreak of the COVID-19 pandemic in March 2020 brought the national tourism, events and hospitality industries to a standstill. The Indianapolis Convention Center and Lucas Oil Stadium ceased operations in March as the state required large gatherings to contain the spread of the coronavirus. As of August 2020, Visit Indy reported the loss of 306 conventions and events scheduled for 2020 and 2021, representing a loss of nearly $ 550 million in revenue for the city. These cancellations include, but are not limited to, GenCon, the FFA Convention & Expo, the NCAA Men’s Big Ten basketball tournament, various NCAA swimming events, the USA Scuba Diving Olympics, and numerous high school sports tournaments.
According to Visit Indy, the city is the most convention-dependent city in the country. As a result, the impact of these widespread cancellations has been devastating to the city’s hoteliers, who rely on the city’s robust calendar of events as their primary source of business. There are over 7,800 hotel rooms in downtown Indianapolis. Data from STR and Visit Indy show that downtown Indianapolis occupancy fell from 71.7% in 2019 to 28.8% in 2020, a decrease of 60%. Meanwhile, the Average Daily Rate (ADR) dropped from $ 166.64 in 2019 to $ 134.47 in 2020, a decrease of around 19%. Depressed market conditions caused by the pandemic caused countless hotels across the country to cease operations, creating a hospitality crisis unlike any seen before, and Indianapolis was no exception. Some of the full-service Indy landmarks, such as the JW Marriott, the Marriott Indianapolis Downtown, and the Conrad Hotel, ceased operations from March through mid-July.
Year-on-year market performance indicators
Source: STR, Visit Indy –
2021: silver lining
There are some silver linings that suggest Indianapolis may already be on the road to recovery. For example, despite a significantly reduced operating time compared to a typical year, ICC and LOS continued to host events in 2020, unlike other large venues across the country that have switched to temporary COVID-19 hospitals and support centers. Youth sporting events made up the majority of the gatherings, according to Visit Indy. One article noted that despite the circumstances, the city managed to host over 18 events in the summer and fall of 2020, which attracted nearly 40,000 people to the city center. This enabled the city to practice, implement, and perfect new protocols and efficiencies related to the COVID-19 pandemic, which is likely to be a new reality (and, for some, a logistical battle) in the industry for the foreseeable future. By maintaining the status quo, ICC and LOS were even able to attract companies that were originally planned elsewhere in 2020. For example, some of the youth tournaments should take place at McCormick Place in Chicago. However, due to tighter restrictions in Illinois and McCormick’s temporary use as a COVID-19 hospital, these have been relocated to Indy. Overall, the continued operation of the ICC and LOS throughout 2020 has certainly provided the city with a solid foundation to spur the 2021 recovery.
As another positive for 2020, many events that were canceled in 2020 have been postponed for 2021, and some added another year to their contracts. For example, GenCon, which was supposed to meet in Indy every summer until 2025, extended to 2026. Likewise, the FFA Convention & Expo extended its contract, which should end until 2031, to 2033. By the end of 2020, over 200 events were planned for Downtown Indy in 2021.
A major win for Indianapolis was the announcement in early 2021 that the NCAA will host the entire NCAA Men’s Basketball Final Four tournament in Indiana from mid-March to early April, with most of the games being played in Downtown Indy. The games are played in the LOS and the exercises are held in the ICC on twelve makeshift places. Five of the city’s landmarks (the JW Marriott, the Marriott Indianapolis Downtown, Westin, the Hyatt Regency, and the Le Méridien) will host the 68 teams coming to town. In addition, most of the around 7,800 hotel rooms in the city center are booked to a certain extent for the tournament, be it as a partner hotel or as an overflow for fans. Officials estimate the tournament could have an economic impact of around $ 100 million on the city. Additionally, Indy’s hosting of the Final Four may have led other event planners to target the city. The men’s Big Ten Conference basketball tournament in mid-March has been relocated to Indianapolis, another event originally planned for McCormick Place in Chicago. This tournament is preceded by the Big Ten Conference women’s basketball tournament in early March, which was to be held in Indy all the time. The relatively busy first half of 2021 in Downtown Indy bodes well for the city, which is generally facing an uphill battle as the meeting / group business will return more slowly than other segments.
New supply update
Until 2019, the number of new hotel openings in Indianapolis were relatively limited. Between 2011 and 2019, Downtown saw its new supply increase by around 4%. However, in response to the city’s heavy visitor numbers in the years immediately prior to the COVID-19 pandemic, the pipeline was expanded accordingly. According to STR, over 1,000 rooms were launched in 2019/20. One particularly notable opening for Downtown Indy in 2020 was the 139-key Bottleworks boutique hotel, which went online in December. The hotel is a historic refurbishment of an old Coca-Cola bottling plant and features a new luxury lifestyle destination hotel within the growing mixed-use development of the Bottleworks District.
At the time of this writing, there are 655 hotel rooms under construction, including the TownePlace Suites by Marriott Indianapolis Downtown, the Tru by Hilton Indianapolis Downtown, a two-branded Hampton / Homewood Suites by Hilton hotel at Indiana University-Purdue University Indianapolis ( IUPUI) and the Kimpton Indianapolis Hotel, all of which are slated to open in 2021. Another proposed hotel is the 40-story, 800-room Signia Hotel for Pan Am Plaza, which will be connected to the convention center. The start of construction is planned for the end of 2022. Completion is planned for late 2024 or early 2025.
While Indy’s event schedule and the hotel industry took a devastating setback due to the pandemic, the city’s strong foundations and numerous future prospects add to the overall recovery. Its resilience in 2020 adds positively to its reputation as a premier convention and sports / entertainment destination that should strengthen the city for years to come.
Indianapolis Business Journal, “Visit Indy Sets Tourism Record.” Retrieved February 5, 2021.
Indy Star, “Abandoned Sporting Events and Lost Conventions: How Indianapolis Hopes To Bounce Back.” Retrieved February 5, 2021.
Indy Star: “Indianapolis has kept its events industry open through most of the pandemic. What’s the tradeoff?” Retrieved February 5, 2021.
Indy Star: “Indianapolis expects March Madness to generate an economic boom of at least $ 100 million.” Retrieved February 5, 2021.
Indianapolis Business Journal, “Big Ten is moving men’s basketball tournament to Indianapolis, sources say.” Retrieved February 5, 2021.