Economic Impact of Festivals, Events and Attractions on a Destination

1. Economic Impact of Festivals, Events and Attractions on a Destination By Dr. Godwin-Charles Ogbeide

2. Introduction How many of you will like many people in your homes?

3. Introduction • Why do you want tourist in your community?

4. Economic Impact • Because the economic impact on communities • Income for businesses/business owners • Employment within the community • Sales tax collections for the city and county governments • Enhancement of the communities

5. Economic Impact How do you justify the importance of these events to community leaders?

6. Economic Impact Use appropriately and well done economic impact study • To provide a more complete picture of an event, festival or attraction’s role in the community • To justify the expense of special exhibitions • To support an event, festival or attraction’s marketing of the full range of benefits it offers • To use as supporting evidence when seeking funding from the government or private donors

7. Economic Impact What is an appropriate and well done economic impact study?

8. “Ad Hoc” Methods • Not a quick and dirty study • A form of an “Ad-Hoc” study • Use of secondary data (addition of total hotel and restaurant sales in the region) • This method excludes attendees’ activity in many other parts of the economy

9. “Ad Hoc” Methods • Another form of “Ad-Hoc” study • Applies an average event attendees’ spending to some guesstimate or available estimate of total attendees in the affected region. • For example, an area attracts 2,000 visitors who each spend $100 per trip for a total of $200,000 in the affected region

10. Challenges of “Ad Hoc” Methods • Not easy to estimate an "average" across all event attendees due to variation in spending patterns • There are also significant challenges in measuring total event attendees without accurate data • These challenges can lead to biased valuation of both total number of event attendees and the spending estimate • Although the “Ad-Hoc” method contains some essentials of a more scientific method, the bias of its challenges could render it inaccurate

11. Better Methods for Economic Impact Study "Tourism Satellite Accounting” (TSA): • It relies on gathering tourism‐related economic activity from existing data of economic accounts. • TSA is generally known for estimating only the direct effects of tourism spending in the affected region and/or tourism‐related industries

12. Better Methods for Economic Impact Study "Visitor Survey” method: • It focuses mainly on the impacts of visitors’ spending (expenditure) while at the affected region • It relies on direct estimate of total event attendees (visitors) and expenditure estimates • Uses regional economic tools such as multipliers to calculate the indirect and induced impact

13. Economic Impact of Wakarusa Music Festival • The event is located on Mulberry Mountain in the heart of Arkansas' Ozark National Forest along Hwy 23 above the Mulberry River Valley. • It provides a four‐day, cultural event that attracts tourists from all 50 states and several foreign countries. • Total attendees in 2011 were over 21,000

14. The Economic Impacts • Direct Impacts • Visitors spends money in the region • Organizers spend money in the region • Indirect Impacts • Hotels bring in extra staff • Restaurants place larger orders with their suppliers • Induced Impacts • Local business owners spend the additional income they earned due to the event

15. Wakarusa Festival 2011 Spending Pattern

16. Direct Impact

17. Total Economic Impact

18. Economic Impact on Franklin County

19. Questions

20. For Economic Impact Studies • Contact: Dr. Godwin-Charles Ogbeide, Ph.D., MBA • E-mail: gogbeide@uark.edu or • Leadershipconsultant@yahoo.com • Office Telephone: (479)575-2579 • Cell Phone: (573)864-7653