Estimating the Contribution of a Multi-Purpose Event Facility to the Area Economy

Abstract

While the economic impacts of professional sports events and entertainment facilities in major metropolitan areas have been the subject of numerous studies, sports and entertainment facilities in smaller cities have received less attention. This study addresses the economic impact of a multi-purpose sports and auditorium facility located in a small metropolitan area. Intercept surveys at eleven representative events provided information on attendees' expenditures and residence and on the role of the event in motivating visits to the area. Data on attendee expenditures, together with facility operation and vendor outlays, were applied to an input–output model to estimate secondary impacts. The results indicate that the events hosted at the facility varied substantially in their potential to draw attendees from outside the local area and that attendees' expenditure patterns also varied by event type. The overall economic impact of the facility was substantial.

Estimating the Economic Impact of Event Tourism

“…For example, perhaps estimating the impact of all the events hosted in one community or at a specific event venue may be the objective. An examination of the research question may lead to the hypothesis that the events may differ substantially with regard to attendee attributes (e.g., residence, income) and expenditures (Hodur et al, 2006). In such cases, it is important to select a representative sample of events.…”

“…Study results indicated that attendee attributes and expenditures did indeed differ substantially by event type. For example, expenditures (in addition to tickets and other spending within the facility) per non-local attendee ranged from $310 for a multi-day amateur athletic competition to $105 for a college football game to $26 for a high school sports event (Hodur et al, 2006).…”

“…Again a common sense approach is needed to determine what portion, if any, of expenditures by local residents are included in the estimate of economic impacts. Hodur et al (2006) asked local respondents what they would have done if they had not attended the event in question. Respondents' choices were "attend a similar event elsewhere," "attend a different event elsewhere," "spend my money on other entertainment in the area," or "stayed home and saved my money."…”

“…Respondents' choices were "attend a similar event elsewhere," "attend a different event elsewhere," "spend my money on other entertainment in the area," or "stayed home and saved my money." Only those who indicated they would attend a similar event elsewhere were included in the estimate of direct economic impacts (Hodur et al, 2006) No single methodology will work in all instances. Rather, an understanding of how attendee motivation is related to determining what portion of total expenditures represent economic impacts is critical.…”

“…However, economic impact analyses of sports facilities and other entertainment events have come under increasing criticism in recent years, with a number of authors suggesting 64 Developing a Successful Infrastructure for Convention & Event Tourism that these studies often seriously overstate the economic benefits accruing to host communities (Crompton, 2004;Matheson, 2002;Noll & Zimbalist, 1997). At the same time, other analysts have found that visitors to sports events, festivals, and other visitor-oriented and event related activities can produce very substantial economic impacts for the host area (Hodur et al, 2006;Chhabra et al, 2003;Gazel & Schwer 1997).…”