Measuring the Economic Impact of Special Events

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Watching Margaret Miller across the table, one might think she was gushing about her grandchildren. But Miller’s contagious excitement was over the results of an economic impact study of the Peter Anderson Arts Festival, an annual event in Ocean Springs, Mississippi. With eyes twinkling and listeners enthralled, Miller talks about the first economic impact study of the event, conducted in 2010, which revealed that the annual festival grossed $13 million in a town of 18,000 people.

This is the second year in a row for us to have an impact study,” Miller breathed. “I can’t wait for the results; I think we could have significantly increased our results from last year!”

The local economies of many towns depend on the revenue, employment, and income that festivals and events bring to the community. Evaluating your community’s festivals and events, especially if they are supported by public dollars or investments, is a vital part of stewardship as a Main Street manager.

Let's take a look at two Mississippi festivals and how measuring their economic impact proved the value of the festivals and led to significant improvements.

Peter Anderson Arts Festival / Ocean Springs, Mississippi

The Peter Anderson Arts Festival was created more than 30 years ago to help bring business to downtown Ocean Springs. The community has just over 18,000 residents, and the annual Peter Anderson Arts Festival draws well over 100,000 people annually.

The research team for the arts festival, consisting of Dr. Albert Myles and Rachael Carter with the Mississippi State University Extension Service, decided that the best way to evaluate the event was first to conduct an economic impact analysis to see the positive influences the event has on the local economy. Second, they designed a survey to conduct a market analysis and consumer satisfaction study that would determine where visitors were traveling from, their demographic information, and suggested improvements to the event.

The Peter Anderson Arts Festival has effectively used intercept surveys to discover that its economic impact is not just local but regional; the event attracts visitors from several states. The study found that the economic impact of the festival was $13 million.

SOTW_6-27-12_Festivals_MMiller“We now have Peter Anderson every day, 365 days per year,” says Margaret Miller, director of the Ocean Springs Chamber-Main Street-Tourism Bureau. “Peter Anderson has had a direct influence on the number of restaurants and businesses we have here.”

Ocean Springs has more than 100 restaurants in the city and 32 of them are downtown.

“We know we have to keep doing things bigger and better to sustain the restaurants and businesses that the festival has created for our town,” she adds. Miller says the economic impact study gave them the courage to go after a national sponsor the next year.

“The timing of the study was fortuitous because I heard Sylvia Allen (of Allen Consulting) at a Main Street training talk about selling sponsorships and it gave us the courage to just go for it,” she says.
The Peter Anderson Festival secured a five-year contract with Blue Moon Beer, which allowed Ocean Springs to expand the festival to a four-day event and bring in more sponsors and names for the 2011 festival.

“Once Blue Moon was in place, everyone else wanted to be part of the event,” says Miller. “It definitely made a difference.”

“We have an unbelievable relationship with Blue Moon,” says Joey Conwill, board president of the Ocean Springs Chamber-Main Street-Tourism. “They have been so grateful and have seen the value of the sponsorship. Gaining a national sponsor and additional sponsors has allowed us to expand the festival and tell more people our story.”

Besides the national sponsorship, Blue Moon has helped promote Ocean Springs as an arts community by sponsoring pre-festival parties that included an art contest in which artists could enter drawings to become the official festival artwork.

After the success of the first impact study, Miller convinced her board of directors to approve a second study for the 2011 festival. The survey revealed that the economic impact of the festival rose from $13 million to more than $22 million and that attendance increased from about 104,000 to 119,000 in 2011, with more than 60 percent of the attendees crediting the new advertising strategies as the way they heard about the event.

“We had the study done again,” says Miller, “because we wanted to take this to the state, to our legislators, and show them what a festival can do. It’s more than about money. It shows that we make a difference!”

Market Street Festival / Columbus, Mississippi

The Market Street Festival in Columbus, a 2010 Great American Main Street Award winner, began in 1996 and is still receiving financial support from the local Convention and Visitor’s Bureau, which is funded completely by tax dollars. An economic impact study was conducted for the 2011 festival to show that the city was receiving a good return for its investment.

SOTW_6-27-12_Festivals_MktStFestMyles and Carter worked closely with regional and local Main Street directors to design an intercept survey that could be used to justify continued financial support of the event. The survey was designed to gather information from the local population to determine whether the festival was a quality community event and whether it was generating spending by attracting non-local and out-of-state visitors.

The research team conducted an economic impact analysis with special emphasis on the total value added to the community through increased spending and the city’s estimated tax collections through the event. The team also measured the level of satisfaction that the event participants had and determined the percentage of repeat visitors.

The study found that 34,000 visitors spent an estimated $7.32 million with local merchants on various goods and services during the festival. “New money,” or expenditures from outside of Columbus and the state, accounted for $3.66 million. The results suggest that for each dollar of direct sales, an additional 30 cents in secondary effects (mainly induced effects) occurred, yielding a total sales effect of more than $3.4 million.

The secondary or induced effects could account for items purchased or money spent to meet the needs of the direct impacts. For example, it is common during a tourism event for business owners to increase the hours of their employees or hire additional part-time staff. The induced effects could also include interest and profits incurred due to the event.

The positive economic impact, favorable reviews by attendees, number of return visitors, and variety of attractions that festival-goers selected indicated that this event is both a successful economic stimulus and an effective community development tool.

Amber Brislin, director of Columbus Main Street, says that the most important outcome of the study was that it confirmed the return on investment to the community. “The study has helped show that all the hours, efforts, resources, and financial support of our local community and sponsors are a wise investment,” says Brislin. “We plan to conduct a study every few years as a way to constantly improve the event and to ensure continued community and financial support.

MSN_May-June12_CoverRead the entire article, "Festivals that Say Cha-Ching: Measuring the Economic Impact of Special Events" in the May-June issue of Main Street Now. And check out the economic impact studies for the Peter Anderson Arts Festival and the Market Street Festival in our SOLUTION CENTER.