A race to raise hotel prices in time for the Kentucky Derby

The Year-on-Year (YoY) demand indicators are strong for this year’s Kentucky Derby, but thus far the pricing leap is far behind that seen in 2024. Are hoteliers gambling with the future with a misplaced bet on demand?

Putting our bets on high hotel demand for this year's race

All the indicators suggest a very strong turnout for this year’s Kentucky Derby, with searches up Year-on-Year (YoY) and plenty of hotels selling out in the run-up. 

This year’s Kentucky Derby takes place May 2^nd and 3^rd 2025, whereas in 2024 it ran from May 3^rd to 4^th, meaning that there is a slight difference to take into account in our daily YoY comparison of demand indicators. 

Nonetheless, where the two do overlap, on May 3^rd, the day of the 2025 Derby itself, demand is expected to be three times higher, with a YoY change of +295%, with a similar +298% the preceding day. Even on the following day of May 4^th, which was the day of the Derby in 2024, indicators are only down -16%, underlining a higher demand level across the weekend in 2025. 

Drilling down into searches made for hotel rooms on OTA and metasearch sites, which is a core component of the daily demand indicator, we can see a YoY increase during the months of March and April heading up to the Derby, which also occurs in prior years as people start to finalize their plans to visit Louisville. 

Looking at the available search data at the time of writing in March and April 2025, and the overall level is up around a tenth over 2023 and a fifth over 2024, which points to increased demand this year.  

We aren’t alone in our assessment that this should be a record-setting year for local hospitality revenues either, with the Louisville Tourism board forecasting a $441 million economic impact for the city in 2025, which is noticeably more than the $405 million forecast they publicized in 2024 and the $434 million impact eventually recorded. 

The CEO of racecourse owner Churchill Downs Inc. also said in a February 2025 earnings call that the pacing of ticketing was ahead of last year. 

That interest in the race is causing hotel sellouts within Louisville. As of the first half of April, 78% of hotels in the city were listed as unavailable, meaning they are sold out, have length-of-stay restrictions in place or are closed and indicate a limited pool of remaining available rooms.

Hotel room pricing in Louisville is still slow to catch up to last year's race

Despite all of this, prices are subdued compared to last year. Hotel rates during the week of the Derby in 2025 are closer to 2023 than 2024, even though demand and hospitality spend should exceed last year and 2023. 

While the average actualized pricing achieved during the week of the Kentucky Derby in Louisville in 2024 reached $347, average advertised prices in 2025 sat at $244 at the time of writing, which is slightly less than the $249 seen in 2023. 

That represents a 30% decline from 2024.

Potentially, this may be down to lower YoY interest in the Kentucky Derby Festival, which runs in the two weeks prior to the Derby. 

Compared to 2024, we're seeing lower demand and slightly reduced average pricing during this period. This earlier dip in demand and booking pace for Louisville hotels year-over-year might have suggested a less successful Derby, though data from the key Derby days themselves contradicts this. 

The more compressed demand fits within a US consumer picture of more discerning spending, with pressures on household finances leading to more careful budgeting, expectations of inflation rising to start 2025 and consequently spend on tourism and leisure becoming more refined. 

Will hotel room prices rise in the final furlong? 

Hoteliers do appear to be picking up these signals now, although it might be a case of too little too late.

Advertised prices at the time of writing for an average hotel room sat $393 on May 2^nd and $413 May 3^rd. These are increases of 11.5% and 17.2% compared to 30 days prior, respectively.  

With double-digit increases in pricing within the last month it appears that hoteliers are catching up to the true demand picture during the Derby days themselves. 

However, this may mean that revenue has been left on the table as hotels discounted rates more than they needed to in the months leading up.  

Judging how demand is evolving is complex and takes on special importance when it comes to major events, and the big boost to revenues that they can provide. 

Let the data guide you to higher revenue around events

Events of this magnitude can make or break your financial forecast for the year, so don’t let it go to a photo finish. Success depends on identifying opportunities before your competitors, and having the tools to capitalize on them immediately.

With our industry-leading Market Insight you have access to real-time demand signals and local market patterns, so you can anticipate demand surges, adjust rates proactively, and make decisions with clarity and confidence.