The Economic Impact of 30 Sports Tournaments, Festivals, and Spectator Events in Seven U.S. Cities

Abstract

Most tourism attractions in the U.S. are financed and/or managed by public park and recreation agencies. Although park and recreation agencies are the engines of tourism, their central role in generating the economic impact emanating from tourists is not widely recognized by taxpayers or elected officials. Economic impact studies are a key tool for enhancing awareness of this role. The conceptual rationale for undertaking economic impact studies is presented. They enable agencies to produce economic balance sheets to supplement their legally required financial balance sheets.

Economic impact studies provide "best guesses" rather than inviolable accuracy. Different procedures and underlying assumptions may be adopted, and often these are inappropriate because study sponsors are more interested in generating high estimates of economic impact that will legitimize a position rather than searching for truth. Four principles central to the integrity of economic impact analyses are reviewed. They are ( 1) exclusion oflocal residents; ( 2) exclusion of "time-switchers" and" casuals"; ( 3) use of income rather than sales output measures of economic impact; and ( 4) careful interpretation of employment measures. Mischievous manipulation of analyses invariably involves abusing one or more of these four principles.

Results from 30 economic impact studies undertaken in 7 cities are reported and the patterns emerging from them are discussed. The data from the 14 studies relating to sports tournaments suggested that: if an overnight stay is not required, then the economic impact on a community is W(ely to be small; $55 per day is a reasonable basis for estimating expenditures at youth soccer tournaments; and $100 per participant per day is likely to be a reasonable basis for estimating the expenditures at adult softball tournaments.

Data from the 16 festival and spectator events suggested that: large numbers of participants and spectators do not necessarily equate to a large economic impact; failure to identifY time-switchers and casuals and remove them from the analyses is likely to greatly distort the results; reasonably accurate measures of economic impact are dependent upon reasonably accurate counts of visitors to the events; the economic impact of mega events is extraordinary; a larger proportion of sports tournaments are likely to generate substantial positive economic impacts; if an overnight stay is not require, then tl1e economic impact on the community is likely to be small.