A study that compared hotel performance during the peak days of the 2012 Mardi Gras in New Orleans, Louisiana, and the time period leading up to the Super Bowl (which was played in New Orleans on February 3, 2013) showed that the Super Bowl drew much higher rates despite similar occupancy levels. Upscale hotels had an average daily rate of $460 during the Super Bowl, compared with an ADR of $265 for Mardi Gras 2012. A similar impact was evident for midscale properties- $392 for a nights stay for the Super Bowl and $273 for Mardi Gras. The rate gaps are significant. (Its interesting to note that the midscale hotels during the Super Bowl had higher ADR than the upscale hotels for Mardi Gras.) This differential indicates that the clientele for Mardi Gras has a distinctly different purchasing power and buying behavior than the clientele for the Super Bowl. Hotels in New Orleans reported a boost in weekly performance results during the week of 27 January-2 February 2013 (the week leading up to the Super Bowl), according to data from STR. The markets occupancy rose 24.5 percent to 71.1 percent, its average daily rate jumped 125.9 percent to $289.03, and its RevPAR increased 181.3 percent to $205.59. The New Orleans hotel industry also benefited from weekend events leading up to Super Bowl XLVII.

Overall, during that same time period, the U.S. hotel industrys occupancy rate was up 3.6 percent to 53.5 percent, ADR rose 6 percent to $106.64, and RevPAR increased 9.8 percent to $57.06.

Question 1. Is what the New Orleans hotels were doing acceptable practice during the two high-profile citywide events of Mardi Gras and the Super Bowl? 2. Were they practicing revenue management or were they price-gouging?