Show Me the Money: Using Research to Measure the Economic Impact of Festivals and Events

For all you festival and event organizers out there who have other departments eyeing your 2012 or 2013 event budget, we feel your pain. While the decision to save money and not put on a community event might make some leaders more comfortable, the truth is that festivals and events are increasingly being regarded as both important place-making cultural assets as well as critical generators of economic activity. When it comes time to argue for your event’s budget or even continued existence, it’s important to have a toolbox-type list ready of both the intangible and tangible benefits that your event brings to your community.

“How can I prove that my event is well worth the investment?”

I get asked this a lot, particularly by leaders in smaller communities who are responsible for putting on a local event. During budget conversations, especially in lean years, these event organizers are often faced with the challenge of convincing others that a festival or event is an INVESTMENT (and one with an immediate economic return) —not a liability. One participant at a recent roundtable discussion said “I know this event brings value—money and non-monetary benefits—because I hear so many positive comments and the local businesses are thrilled. Still, it’s like I’m fighting for the right to put it on every year.”

The truth is, as an event coordinator or organizer you often have to justify public funding for festival activities by educating public officials and business managers of event benefits. Intangible benefits such as exposure, furthering community reputation towards a particular brand identity, celebrating agricultural heritage or history, building camaraderie, and even contributing to residents’ quality of life and sense of pride by strengthening the community bond have also been listed as festival benefits. Despite all these benefits, when budgets are involved savvy community leaders often need more than intangibles to allocate precious public funds to what some consider purely “a fun time”. However, when you prove in dollars what your event generated for the community (and that the return was even greater than if the original investment was placed in a savings account or bond), leaders often sit up and pay attention.

Recently, North Star Destination Strategies measured the economic impact of the June 2011 BMW Motorcycles of America Rally on Bloomsburg, PA by surveying those who came to Bloomsburg for the Rally.

Rally attendees were asked about their spending during the event in the categories of lodging; food/dining at the event vs. in the local area; shopping at the event vs. the local area; attractions, museums and tours; entertainment; and transportation. North Star found that on average, a Rally attendee spent $105.61 per day, more than two times that of a typical Bloomsburg visitor ($47.32). The estimated revenue generated for the event itself is $1,342,270, and the estimated revenue generated for Bloomsburg is $1,479,341. This creates a direct economic impact of $2,821,611, and an overall estimated economic impact (includes induced and indirect effects of spending) of $4,655,658.

Generating that kind of revenue certainly proves that the Rally was a good investment. Another positive impact is the citizen satisfaction that results when residents are educated that revenue from the Rally reduces what they will have to pay in taxes the following year. What community leader wouldn’t want to pass on that kind of message?

~ Shannon
shannon@northstarideas.com