The First Serve

The Setup: Host Hotels, a large owner of luxury hotels, held their Investor Day on May 23rd. During the presentation, management discussed future plans for their real estate portfolio, including perspectives on growing their pickleball footprint across their properties.

The Inside View: The team noted the attractive revenue opportunities associated with ‘group experiences’, which uniquely benefit from sporting amenities. They highlighted two case studies: 1) Topgolf Swing Suite at the Marriott Marquis sees high utilization rates among groups and serves as a draw for conference / business groups who are looking for things to do while they’re in town. 2) Coronado Island Marriott converted the existing tennis courts and built new pickleball courts over the past 4 years at the request of hotel members and has hosted tournaments which draw players from across the country and provide new revenue streams.

Diving Deeper: The Coronado Island Marriott shifted plans for their sport facility and amenity renovations in 2019 to meet the demands of their 300+ local community members who sought an expanded pickleball offering. Initial design plans were revised to add an additional four courts, bringing the total to 8 courts, with 3 tennis courts that can be used for tournaments. The Coronado location has since hosted the World Pickleball Tour San Diego Classic, which drew 313 players competing for $5k in cash prizes and generated additional revenue through room reservations, event space bookings, and concessions. Host Hotels sees these active lifestyle offerings as a unique incentive for health conscious consumers when deciding where to stay on vacation.

The Reset’s View: Pickleball court construction (or conversion) appears to be a lucrative opportunity for property owners that have the pre-existing infrastructure in place to host events that benefit the core business (hotel room reservations).

The 5 advantages:
1️⃣ Gives travelers an additional reason to select these hotels. Pickleball courts are a unique amenity for travelers of all ages and skill levels to participate in a social and competitive activity during their trip. More avid players can easily bring their own equipment (try flying with a tennis racquet), and beginners or families can use off-the-shelf paddles to quickly get into a game.

2️⃣ Hosting nationally recognized pro and amateur pickleball tournaments provides ancillary revenue that is hard to monetize from tennis courts. If you assume a high-end hotel has 3-4 tennis courts, then they would struggle to host a legitimate tennis tournament. However, those courts can be converted to 12-16 pickleball courts, making it feasible to host most tournaments. The additional foot-traffic benefits the hotel’s core and higher margin businesses through higher room utilization rates, restaurants, and on-site concessions.

3️⃣ Companies that already own the existing real estate and facilities see better economics from converting their preexisting assets into pickleball courts. For hotels that already host tennis courts or indoor basketball courts as a guest amenity, they’re able to more quickly construct new courts to capture demand, compared to new market entrants that have to first buy land / facilities, determine the type of player base they want to target, and then conduct a full build-out. Stay tuned for a future breakdown of Life Time Fitness’ advantageous economics around court conversion.

4️⃣ Having a valuable sporting amenity opens the door to offer memberships and pay-to-play offerings for local community members who want to access premier facilities. These memberships help hotels open an additional revenue stream, increase the likelihood of cross-selling other hotel offerings to members (e.g. food & beverage), and build brand awareness for members when they travel or recommend accommodations to visitors.

5️⃣ Provides hospitality chains the infrastructure to host pickleball-centric travel experiences, such as Pickleball Getaways, Pickleball Trips, Straight Away Travel, and Destination Pickleball.

The Second Serve

First, if you haven’t seen the commercial yet, watch it here. And our official review here.

The TL;DR: Subway created an entirely new menu item, the Pickleball Club, which is now available across 37,000 locations. The Company partnered with former top tennis pro, Andy Roddick, for its release and debuted it at the inaugural Pickleball Slam - an exhibition match of former tennis legends John McEnroe, Andre Agassi, Michael Chang, and Andy Roddick. Oddly though, the spokesperson for the actual commercial is not Andy Roddick, but future hall of fame quarterback Peyton Manning…we work hard, but Manning’s agent works harder.

The Reset’s View: Every corporation looks for new marketing tactics to stay relevant with the hottest trends, and pickleball appears to be getting its time in the spotlight. From cable news coverage to emerging sports broadcasting deals, it’s now making its way into the marketing departments of established corporations. The Pickleball Club was only 1 of 2 new sandwiches the Company added to the “Subway Series” menu so far in 2023. One interesting piece to note is that Subway already had an existing “All American Club” sandwich on the menu, suggesting the company felt so strongly about this pickleball initiative that they decided to make menu space for it to compete with a nearly identical existing substitute. We’ll be keeping an eye out for other corporate marketing pushes in this direction.

The Third Serve

The Summary: We’re excited to release the industry’s first-ever pickleball market map, tracking the latest companies and categories emerging nationally across the sport. We’d love your feedback if you think we missed anyone.

On Our Radar

Quick Review: Drew Brees, a Future NFL Hall of Famer and co-owner of Austin’s MLP team, the Mad Drops Pickleball Club, announced that the Brees Dream Foundation will host a new annual charity event, The NOLA Pickleball Fest August 10-13. The tournament will feature 24 PickleRoll courts in the New Orleans Convention Center, alongside live music and local food offerings.

Who’s Playin’: The event will include a 3.0 - 5.0+ amateur round robin tournament, as well as an exhibition match featuring Drew Brees and other celebrities.

The Reset’s View: NOLA Pickleball festival is tapping into a unique charitable event format, which gives community members more reason and access to participate. Rather than standard charity events where guests watch and are asked to give, this format allows for people to freely participate in activities and connect with members of their community. Almost all cities have indoor venue space focused on engaging the community, and companies like PickleRoll enable an affordable way to make pop-up pickleball events accessible to charitable organizations. NOLA Pickleball isn’t simply doing this on a whim. Golf has historically been a common activity-based charity sport for years, with data in 2019 showing 12 million golfers played in 140,000+ charity events across 12,000+ courses and raised ~$4 billion in donations. While Pickleball is still in its early days, its accessibility for participants of any skill level make it a unique format for more charities to test in the coming years.

What we’re reading, watching, and listening to…

📚 Valid scrutiny around PPA’s current paddle testing process
🎥 An in-depth chat with veteran female pro Andrea Koop
🎧 Interview with Vatic Pro paddle company CEO