does your festival or event make cent$
DESCRIPTION
Presentation given to the Michigan Association of Convention and Visitor Bureaus during their annual conference in Ann Arbor on September 30, 2013.TRANSCRIPT
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Does Your Festival or Event Make Cent$?
How To Conduct an Economic Impact Analysis (… and why you should)
Photo: 401(k) 2013 on Flickr
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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
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What Is Economic Impact?
New money injected into a host economy by
people from outside the host economy.
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7 Benefits of Conducting an EIA on
Your Event
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#1 Justifies Financial Support
Photo: Michael @ NW Lens on Flickr
Anytown City Council
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#2 Proves Return on Investment
Photo: 401(k) 2013 on Flickr
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#3 Attracts Sponsorships
Photo: 401(k) 2013 on Flickr
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#4 Allows for Benchmarking
Photo: 401(k) 2013 on Flickr
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#5 Demonstrates Benefit to Partners
Photo: 401(k) 2013 on Flickr
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#6 Paves the Way for Expansion
Photo: AlBakker on Flickr
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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
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Is an EIA Right for Your Event?
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Don’t Conduct an EIA If …
• … your event draws mainly locals• … you lack the resources• … economic impact data is not needed
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EIA Example:Run Like the Wind Relay
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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
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#1DIY Method 1
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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
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Average MI daily spending ($pppd)
• Overall - $92.00• Business - $143.60• Leisure - $81.58
Source: MEDC; D.K. Shifflet & Associates
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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.
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#2DIY Method 2
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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
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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
Photo: llamnudds on Flickr
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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.
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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.
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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.
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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)
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Photo: andyde on Flickr
When To Seek Professional Help
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Photo: modenadude on Flickr
Accuracy
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Avoid This
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Credibility
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#3Method 3
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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
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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
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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
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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.
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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
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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)
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Where To Find Help
Photo: Theo La Photo
• Colleges and universities• Councils of Government (COGs)• Economic Development Corporations• Consultants
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Can I Help?
Call Me!
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Follow Me
Linkedin.com/in/sarahpageFacebook.com/SarahTPageConsulting
@pagetx
Sarah Page, PrincipalSarah T. Page Consulting, LLC
http://[email protected]
512-914-8873
Instagram.com/stpconsulting
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Thank You!Questions?