This week’s Huddle Up title should be familiar to our readers who are also Clint Eastwood fans. However, this week’s topic is about economic impact rather than “go ahead, make my day”, the famous line from the movie Sudden Impact (circa 1983). If you can weave a Dirty Harry quote into a discussion about economic impact (I tried), score a gold star.
This past week we were invited to speak at the inaugural Virginia Sports Summit in Norfolk (thank you to Wes Hall and his team for putting together a strong program and for including us!). It was a great event, attended by the key sports tourism players in the Commonwealth, many of whom also brought their parks and recreation leaders along with them. We covered several topics over the course of two days: facilities, sports tourism marketing, technology, created events, and best practices across additional areas.
As is normally the case at these types of events, the discussions after the sessions are often even more lively than the breakouts themselves. At the VA Summit, a group of us got into a long dialog about economic impact. We do quite a bit of work in this space, and we have our own philosophies on the dos and don’ts in calculating economic impact. Here is a quick run down of things we take into consideration when evaluating a single event or the potential for a new venue, and the financial impact they could make on your community…..
Do: Use live intercept surveys to gather real data on attendee spending.
Don’t: Take an event (or venue) owner’s word for what their attendees spend.
Do: Plug in as much real data as possible in your calculations (such as the average room rate from your STR reports and your sales and room tax percentages for your destination).
Don’t: Use a blanket number from a national publication as a spending number for your destination.
Do: Use a nationally recognized calculator if you have access to one (such as the NASC/DI impact tool).
Don’t: Make up your own model without external input.
Do: Look at the “universe” of opportunity that an event or venue could generate.
Don’t: Think that you will capture ALL of the potential (or “universe”) that may be possible.
Do: Use ONLY direct visitor spending numbers.
Don’t: Use “multipliers” relating to how many times a dollar will turn over in the local economy once it’s spent the first time at your event/venue.
Do: Count each unique person/athlete one time.
Don’t: Count the same individual person/athlete for each event they enter (multi-sport events are often guilty of “double counting” their athletes as if they were 2-3-4 different people because they competed in different events). One athlete, one impact.
Do: Err toward conservative estimates.
Don’t: Overestimate economic impact.
Do: Be sure to provide political cover to your stakeholders with solid data that is defendable and/or achievable.
Don’t: Discount the need for carefully crafted and conservative data. Taking a thought out conservative approach will give your supporters (especially elected officials) the ability to endorse your efforts.
Those last two are the most critical for a couple of important reasons. First, if you are overzealous on your projections you will likely put your political leaders (and yourself) in harms way if your estimates don’t come to fruition. Second, while it is tempting to embellish impact estimates to make a project or event look better than it really is, that is a short-term solution at best. Play the long game when it comes to evaluating your work, especially when talking about economic impact. If you under estimate and over deliver, that is far better than the opposite outcome.
The reason we chose this week’s title is that often times CVBs or sports commissions get a fire drill type call from someone important (usually an elected official) wanting economic impact data for an event that is taking place. They want the information now, rather than after careful data collection and analysis. Thusly, they suddenly want an impact report. There are major pitfalls to giving in to these short turn-around types of requests, so we implore you to take your time, and get the numbers as solid as you can before circulating them to anyone. Yes, even the Mayor.
Our team at the Huddle Up Group strives to be a resource to the sports tourism and events community where we can add value to the industry, whether you are a client of ours or not. With that in mind, if you need an economic impact template, and want to talk through how to best develop an accurate economic impact measurement program, contact us and we can send you a model to use as a guide. We can also set up a call to go through the process that will generate solid results you can rely upon, and defend, over time.
Let us know how we can help along the journey. Have a great week ahead!