Does Your Festival or Event Make Cent$

Does Your Festival or Event Make Cent$?

How To Conduct an Economic Impact Analysis (… and why you should)

Photo: 401(k) 2013 on Flickr

Agenda

Benefits of conducting an EIAIs an EIA right for your event?DIY Methods of conducting an EIA

Method 1Method 2

When to seek professional helpMethod 3 – Hire professional helpQ&A

Get these slides here:http://sarahtpage.com/MACVB/

What Is Economic Impact?

New money injected into a host economy by

people from outside the host economy.

7 Benefits of Conducting an EIA on

Your Event

#1 Justifies Financial Support

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Anytown City Council

#2 Proves Return on Investment

Photo: 401(k) 2013 on Flickr

#3 Attracts Sponsorships

Photo: 401(k) 2013 on Flickr

#4 Allows for Benchmarking

Photo: 401(k) 2013 on Flickr

#5 Demonstrates Benefit to Partners

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#6 Paves the Way for Expansion

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#7 Provides Market Research

12%

13%

19% 20%

28%

4%

How often do you come downtown?

daily2-3 times/weekonce/week2-3 times/monthonce/monthnever before today

Is an EIA Right for Your Event?

Don’t Conduct an EIA If …

• … your event draws mainly locals• … you lack the resources• … economic impact data is not needed

EIA Example:Run Like the Wind Relay

Run Like the Wind Relay

Photo: Ella Baker Center on Flickr

• Run Like the Wind Relay is held in Ann Arbor• There are 1,700 race participants

#1DIY Method 1

Use Method 1 If …

… you only need a very basic and generalized estimate

… you have little time to prepare and organize prior to the event

... there are few volunteers available to survey event attendees

… no one is available for data entry and analysis… you have a good estimate of the number of

event attendees

Average MI daily spending ($pppd)

• Overall - $92.00• Business - $143.60• Leisure - $81.58

Source: MEDC; D.K. Shifflet & Associates

Calculating the Economic Impact

1,700 race participants * $92.00 pppd spending = $156,400

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

The economic impact of the Run Like the Wind Relay was $156,400.

#2DIY Method 2

Use Method 2 If …

… you have little time to prepare and organize prior to the event

… you can secure the cooperation of local hotels, motels, and B&Bs

.. there are few volunteers available to survey event attendees

… someone is available to contact the lodging places before and after the event and to record the data

… you have a good estimate of the number of event attendees

Method 2 Process

• Uses algebra and actual hotel receipts to estimate the total impact

• Solves an equation to determine unknown quantities• Hotel receipts are the known quantities• Hotel receipts are a percentage of total travel expenses

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Method 2 Process

$315 ($ lodging) ÷ $1,372 ($ destination) = .2295 or 23%

23% of all expenditures in the U.S. are for lodging.

Method 2 Process

Make this assumption:

If 23% of all expenditures on trips in the U.S. are for lodging, then 23% of all expenditures on trips in Michigan

are also for lodging.

Method 2 Process

• Before the event• Step 1: Request that hotels ask guests if they are

in town for the Run Like the Wind Relay• After the event• Step 2: Call each hotel and request the “rack

rate” charged during the event. Also ask for the number of rooms sold and number of nights stayed specifically for the Run Like the Wind Relay.

• Step 3: Multiply the number of rooms by the rate for each property and total.

Method 2 Process

The economic impact of the Run Like the Wind Relay was $18,086.96

Hotel # of Rooms Sold for

Event

# of Nights Stayed for

Event

Rack Rate Revenue

Hotel 1 4 1 $65 $280

3 2 $65 $390

Hotel 2 10 1 $85 $850

Hotel 3 30 1 $60 $1,800

7 2 $60 $840

TOTALS 51 7 $4,160

$4,160 ÷ .23 = $18,086.96 (Direct Impact of the Run Like the Wind Relay)

Photo: andyde on Flickr

When To Seek Professional Help

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Accuracy

Avoid This

Credibility

#3Method 3

Use Method 3 If …

… you need the most accurate data possible… there is ample time available to plan and

organize prior to the event.. there are plenty of volunteers available to

survey event attendees… you have a good estimate of the number of

event attendees

Consultant Responsibilities

• Design the survey• Estimate sample size needed• Develop a sampling plan and surveying schedule• Guide in volunteer selection and provide

training• Determine/estimate event attendance• Collect and analyze the data• Produce a report detailing the results

You’ll Need a Questionnaire• Zip code• Number in the traveling

party• Number of days spent in

your town• Amount (or estimated

amount) spent in the following categories:– Dining– Lodging– Shopping– Gas– Attractions/entertainment– Other expenses

Sampling

• Survey – or sample – throughout the entire event.• This is the number of completed non-local surveys you

need.• Local survey responses DO NOT contribute to the

economic impact.

Estimating Attendance

• Guest book• Polling• Visitor counts• Traffic counts and average number of people per

vehicle• Interval counts from a high vantage point or in

quadrants• Tag and recapture• Aerial photography

Analysis• Spending from the surveyed attendees is applied

to the entire population (all non-local attendees)• Data is analyzed with economic modeling

software• The software produces the impacts:• Total impact• Direct impact• Indirect and induced impacts• Number of FTEs created• FTE income• Tax impacts (sometimes)

Where To Find Help

Photo: Theo La Photo

• Colleges and universities• Councils of Government (COGs)• Economic Development Corporations• Consultants

Can I Help?

Call Me!

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@pagetx

Sarah Page, PrincipalSarah T. Page Consulting, LLC

http://sarahtpage.comsarah@sarahtpage.com

512-914-8873

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Thank You!Questions?