March Madness in Kentucky: the effects on Lexington restaurants
March Madness is huge around the country, but few places love the NCAA basketball tournament more than the home of the Kentucky Wildcats, and the school typically does very well in the tournament. As you might expect, March Madness brings big revenue to restaurants across the country, which see a significant boost. (Click here to read our detailed report.)
Do Lexington restaurants bring in more daily revenue during March Madness than during a typical weekend day?
If we start by looking at the average daily revenue for restaurants in Lexington, we see they brought in an average of $1,333 on March Madness game days—a significant increase over the $1,045 average revenue on a typical day. However, because restaurants do the bulk of their business over the weekend, we see a more moderate bump when comparing March Madness to revenues over a typical Thursday through Sunday timeframe.
When comparing average daily revenue on March Madness days against what restaurants would ordinarily expect on a Thursday through Sunday, restaurants nationwide generally made about 2% more, while restaurants in cities with teams in the tournament brought in about 4% more (or double the national average).
Statewide, Kentucky restaurants did as well as those playoff college towns specifically, and Lexington itself did better still with a daily March Madness revenue more than 5% greater than the national average weekend day. (Click here for our in-depth blog post detailing March Madness’s effect on restaurants in college towns.)
Do Lexington restaurants do better the farther UK Wildcats progress in the tournament?
Now let’s look at how Lexington restaurants performed throughout the tournament.
As you can see, Lexington restaurants saw a HUGE boost for the second round in 2018. These were the biggest days of the tournament for restaurants across the country but local restaurants in Lexington saw one of the biggest single-day revenue boosts of any team in the tournament. However, after Kentucky was knocked out, restaurants actually brought in less revenue during both Elite 8 games than the typical Saturday and Sunday.
This graph shows more starkly the difference between Lexington restaurants’ revenue during the second round of the tourney, and during Sweet 16, where revenues were close to those of a typical day.
Again, Kentucky fans seemed less likely to go out to eat during the Elite 8 games than during typical weekends, and much less than they did during the 2nd round Saturday and Sunday games. There was somewhat of a bounceback for the Final Four, and then the championship game showed flat revenue.
How did Lexington restaurants compare to the rest of Kentucky as the tournament progressed?
We next examined how restaurants specifically in Lexington performed as compared to the rest of the state as the team progressed (or didn’t) in the 2018 tournament.
The below graph shows that while national average daily revenue increased for the Elite 8 round, Kentucky saw a statewide dip in revenue, and Lexington specifically fell into a depression of restaurant revenue that was far below even a typical day.
We can only speculate that this “low” may have been a reflection of how low Wildcat fans felt.
What can Lexington restaurants expect if Kentucky continues past the Sweet 16 this year?
Finally, we dug even deeper and compared Lexington restaurants’ revenue to other cities whose teams either did or didn’t progress in the 2018 tournament.
Here we see that restaurants in cities with teams that played in the Elite 8 saw a nice bump in revenue, while those who were eliminated saw falling revenues, but still above the national daily average.
However, Lexington restaurants experienced an larger-than-average slump during the Elite 8 before recovering to closer to national averages for the Final 4 and championship game.
Of course, it’s hard to predict whether a deep run in this year’s tournament would translate into a huge Elite 8 weekend for Lexington restaurants. However, looking purely at the national trend from last year’s tournament suggests that the longer a team remains in the tournament, the better it is for local restaurants in their area.
Interestingly, the general trend is for restaurants in cities whose teams were eliminated to see better numbers on championship day than those in cities with teams playing in the championship. One possible reason for this might be that for the most important games, people prefer to watch them at home or at friends’ houses, rather than in a restaurant.
How to get the most out of March Madness if you own a restaurant in a college town
If you own or manage a restaurant near Lexington, you should make the most out of this yearly craziness—whether Kentucky goes all the way or not.
If you already experience a nice boost during March Madness, think about how to piggyback off of the increased traffic to pay off big after the tournament. Take advantage of the increased business to boost your online reputation, for example. Read our article on how to get more reviews for your restaurant for tips and ideas.
Does your restaurant struggle to see the same kind of extra revenue during March Madness we explored in this article? Think about ways to tap into the extra business out there. If you have TVs in your restaurant, share social posts encouraging fans to come watch the games there. If you don’t have anywhere in your restaurant for patrons to watch the games, consider running specials on on takeout or delivery. Consult our 4 key elements to building an effective marketing strategy for your restaurant as a good starting point.
Finally, consider using loyalty marketing software to help you build repeat business. With automatic emails and offers, you can get more loyal customers with just a few clicks. That way you can get the most out of March Madness long after the winners are done partying in the streets.
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