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Economics Impacts on Events

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Elizabeth Copping

on 8 January 2015

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Transcript of Economics Impacts on Events

Misleading Presumption about Event Impacts
Presumption 1: To justify events, or to obtain grants, it is necessary to ‘prove’ their economic benefits.
Presumption 2: All festivals and special events create economic benefits
Presumption 3: construction of new facilities for mega-events is a benefit
Presumption 4: festivals are for everyone: all visitors are alike
Presumption 5: events create lots of employment
Presumption 6: all the expenditure of all event-goers can be counted as economic benefits
Presumption 7: multipliers and/or economic models must be used to estimate the ‘secondary’ impacts of events. (Getz 2005, p. 385-389)
for Events
“A primary concern of an event entrepreneur or host organisation is whether an event is within budget and, hopefully, results in a profit. This is a simple matter of whether the income from sponsorship, merchandise and ticket sales exceeds the costs of conducting and marketing the event.” (Allen et al. 2011, p. 68).
Definition's...
"Special events are that phenomenon arising from those non-routine occasions which have leisure, cultural, personal or organisational objectives set apart from the normal activity of daily life, whose purpose is to enlighten, celebrate, entertain or challenge the experience of a group”
(Shone and Parry, 2004, p. 4)

Monday, November 17, 2014
Alex, Liz & Liam
Economic Impacts of Events
Direct impacts
Induced impacts
Activity time
ECONOMIC CALCULATOR
This calculator has been provided to allow event organisers and funders to get a broad feel for the scale of economic impact that an event might achieve.


Event Planning Process
References....
Definition's...
“Estimates the net impact of money created from outside the region and the money that stays in the local economy. It represents the increased spending above and beyond what would be expected in the region if the event was not held”
(Doshi et al., 2001, p. 2)

for Economics
Introduction
Indirect impacts
Source: Adapted from Hall 1989.
(Adapted from Allen et al. 2011, p. 61)
Table 1: The impacts of events
(Janeczko et al., 2002)

Summary of the impacts of events
(Janeczko et al., 2002)
(Janeczko et al., 2002)
- Permanent jobs, wages and outputs

For example - the Open Day organiser at Bournemouth University
The jobs, wages and outputs created by businesses, which provide goods and services essential for the running of the event.
Referred to as 'supplier' impacts.
For example, the person working for a Christmas stall in Bournemouth selling Christmas gifts.

The result of spending the wages and salaries of the direct and indirect employees on items such as food, housing and transportation.
For example, the individual purchasing the Christmas Gift from the stall holder.
We are now going to show you some examples of direct, indirect and induced impacts.
'Displacement' and 'Leakage'
The Ryder Cup
Sources of festival inputs
“Gibson and Stewart (2009) found that certain inputs, such as staff, catering and staging, were primarily sourced locally, while stall holders and talent, including musicians, performers and contestants, were sourced from a wider geographical base. (See table 2).” (Allen et al. 2011, p. 70).
There are three main phases of the economic impacts of the event. The pre-event impacts, during the event impacts and post-event impacts.
The Ryder Cup- Direct Impacts Example
Pre-Event Impacts
Impacts first start to occur soon after the city has decided to bid (this can be up to 10 year prior to the actual event).
Investment and other preparation activities.
Tourism
During the Event Impacts
Post-Event Impacts
The Ryder Cup- Indirect Impacts
The Ryder Cup- Induced Impacts
Summary: Key Economic Benefits and Costs of a Mega Event
To create a successful and profitable legacy, requires a lot of planning.

Book references:

Allen, J., Harris, R., McDonnell, I. and O’Toole, W., 2011. Event Impacts and Legacies. In: Festival & Special Event Management. 5th ed. Australia: John Wiley & Sons Australia, Ltd, 59-85

Kirkup, N. and Shipway, R. 2012. Impacts and legacies of sports events. Emerald Insight.

Getz, D., 2005. Evaluation and Impact Assessment. In: Event Management & Event Tourism. 2nd ed. New York: Cognizant Communication Corp, 377-409

Shone, A. and Parry, B., 2004. Successful Event Management: a practical handbook 2nd ed. London: Thomson

Janeczko, B., Mules, T., and Ritchie, B. 2002. Estimating the Economic Impacts of Festivals and Events: A Research Guide [online]. Australia: CRC for Sustainable Tourism Pty Ltd.



Crompton and McKay, 1994, p. 33
Doshi et al., 2001, p. 2

Tejvan Pettinger, TP, 2012. Advantages of Hosting A Major Event. Economics.help. Available from : http://www.economicshelp.org/blog/4909/economics/advantages-of-hosting-a-major-event/

Ryder Cup Europe LLP, IFM, 2011. Economic impact assessment. Sport marketing surveys. Available from: http://www.eventimpacts.com/pdfs/IFMSMS_The%202010_Ryder%20Cup_EIA_Report.pdf

Derek Lawrenson, DL, 2010. Ready for the big showdown. South East Wale. MailOnline. Available from: http://www.dailymail.co.uk/sport/golf/article-1307474/RYDER-CUP-2010-Derek-Lawrenson-rates-Europes-Ryder-Cup-team.html#ixzz3IgIVBCOF

Bussiness insider, BI, 2011. Available from: http://www.businessinsider.com/everything-you-know-about-green-energy-job-growth-is-wrong-2011-1

Danny Ecker, DE, 2012. Available from: http://www.chicagobusiness.com/article/20120519/ISSUE01/305199972/ryder-cup-rivals-nato-summit-for-economic-bump-without-the-fuss

Roads, R, 1010. Rock of stone. Available from: http://roadsofstone.com/2010/10/06/229-ryder-cup-2010-the-perfect-blue-day/

John Vincent Fieno, JF, 2014, Four Years On, South Africe World Cup Has Failed To Live Up To Promises, webpage can be found at: http://worldsoccertalk.com/2014/06/12/south-africa-four-years-later/

Loretta Chao, LC, 2014, Brazil Welcomes 1 Million World Cup Tourists, webpage can be found at: http://blogs.wsj.com/dailyfix/2014/07/15/brazil-welcomes-one-million-world-cup-tourists/

FIFA.com, 2014, 2014 FIFA World Cup Brazil In Numbers, webpage can be found at: http://www.fifa.com/worldcup/news/y=2014/m=9/news=2014-fifa-world-cup-braziltm-in-numbers-2443025.html

Judy Cantor-Navas, JC, 2014, Brazil's Controversial World Cup Stadiums Poised To Expand Its Touring Market, webpage can be found at: http://www.billboard.com/articles/business/6214511/brazils-world-cup-stadiums-
touring-market

Manuel Rueda, MR, 2013, abc news, webpage available at: http://abcnews.go.com/ABC_Univision/brazilians-angry-world-cup-spending/story?id=19440162

2013, telegraph.com, webpage available at:http://www.telegraph.co.uk/travel/destinations/southamerica/brazil/10500251/Brazil-World-Cup-2014-travel-guide-for-England-fans.html

Image - south Africa stadia: http://ixwa.hubpages.com/hub/South-African-And-the-2010-World-Cup-In-the-Eye-Of-The-Storm

Image - South Africa Stadium: http://blogs.salleurl.edu/mba-360/2010/06/08/the-fifa-world-cup-2010-a-risky-business-for-south-africa/


Jamie Squire, JS, 2010. Getty Images. Newport, Wales. Available from: http://eurydercupgalleries.pga.com/gallery/2010_Ryder_Cup_Closing_Ceremony

Andrew Redington, AR, 2010. Getty Images. Newport, Wales. Available from: http://eurydercupgalleries.pga.com/gallery/2010_Ryder_Cup_Closing_Ceremony

Julie Whitfield The Economic impacts of mega events - PowerPoint presented on 27th October



The world cup is using its improved infrastructure and stadiums to host other events, and making other uses for the non-profitable stadiums.
Media exposure for Celtic Manor Resort, Newport and Wales,
Golf tourism from 2002-10
A lot of investment
Benefits for hosting the Ryder Cup
Ryder Cup- Total Economic Impact
Brazil- Rio de Janieros' Maracanã stadium
South Africa- Soccer City in Johannesburg
Here are two videos we found that give a brief summary of how sports can directly affect one particular area

Construction Workers
Christmas Shopping
Hotels and Restaurants used during the event
Richard Hills, the European Ryder Cup Director, said: "Major sports events consistently deliver considerable direct and indirect benefits to the Host Nation and venue. This is confirmed by the results of this Economic Impact Study, the increase in revenue brought into the Welsh economy by golf tourism and golf events, the growth of the game in Wales and the massive coverage the event achieved globally. All of this highlights why The Ryder Cup is considered by many observers to be one of the top ten global sporting brands."
Food consumed by employees
References....
BDBPBC, 2013. Economic Impact of the Sports Industry in Palm Beach County, FL [video, online]. Available from: https ://www.youtube.com/watch?v=IcYixMAQv3o [Accessed 9 November 2014].

Getz, D., 2005. Event management & event tourism. New York: Cognizant Communication Corp
 
Getz, D., 2008. Event tourism: Definition, evolution, and research. Tourism Management. 409-428

Elite NWO Agenda, 2014. Why locals are angry: An example of Brazil's budget for stadiums compared to previous years. [video, online]. Available from: https ://www.youtube.com/watch?v=Y7eY6bDq-cY [Accessed 9 November 2014].

Hayzmullins, 2010. Beach events in Poole have a positive economic impact. [video, online]. Available from: https ://www.youtube.com/watch?v=VSsNrcOUH0o [Accessed 9 November 2014]

Bill Watkins, BW, 2012, Economic Calculator, Website found at: http://www.newgeography.com/content/003141-cerfs-economic-policy-plan

Image – Richard Hills : http://www.golfbusinessnews.com/wp-content/uploads/2011/02/richard-hillsmod.jpg

Image - Creation of infrastructure :http://iceconnect.eletsonline.com/wp-content/uploads/2014/05/Real-Estate-Construction-and-Infrastructure1.png

Image - Investment :http://balliolproperty.co.uk/wp-content/uploads/2011/10/investment.jpg

Image - Marketing :http://processindustryforum.com/wp-content/uploads/2013/11/marketing.jpg

Image - Job creation :http://economicgrowthdc.org/work/assets/Job-creation-Just-Ahead.jpg

Image - Health and fitness :http://hdwallpapersin.biz/wp-content/uploads/2014/10/Health-And-Fitness-158610-Wallpapers-HD-158612.jpg

Image - Community pride: http://www.gloscityhomes.co.uk/CachedImage.axd?ImageName=%2FImages%2FIcons%2Fcommunitypridelogo.jpg&ImageWidth=400&ImageHeight=400

Paul Kiernan, PK, 2014, The Wall Street Journal, Rio Declares Holidays to Relieve World Cup Traffic Congestion. Website available at: http://online.wsj.com/articles/SB10001424052702304185104579435610752679396



Quiz time...
1. What was the percentage of spectator expenditure during the Ryder Cup in 2010?
2. What is the Total Economic Impact of The 2010 Ryder Cup in Wales?
3. What does indirect impact mean?
4. what does 'leakage' mean?
5. What are some of the direct impacts from events?
South Africa can't sustain its Legacy promise. i.e wasted stadiums and a high speed rail link which is too expensive.
6. How much do you think the world cup cost the Brazilian Government?
7. In contrast how much do you think it cost the South African Government? What was their budget and how much did they really spend?
8. In groups, discuss which government thought more about the post-event impacts of the world cup?
Example
Brazil spent $4 Billion on renovating the stadiums for the World cup.
Why locals are angry: An example of Brazil's budget for stadiums compared to previous years.
For example, Brazil had issues with the pre event planning process where there were riots erupting.
- Major events can cause smaller events to arise.
- During the Brazilian World Cup:
- approximately 1 million additional tourist
- extra coverage
- repeat tourism
- boost to the economy, tourism sector and local businesses
Negative side:
- trouble commuting
Solution:
- public holiday declared
- revoking of licenses
This refers to the 'Event Legacy'
i.e what it leaves behind.
Misleading Presumption about Event Impacts
Presumption 1: To justify events, or to obtain grants, it is necessary to ‘prove’ their economic benefits.
Presumption 2: All festivals and special events create economic benefits
Presumption 3: construction of new facilities for mega-events is a benefit
Presumption 4: festivals are for everyone: all visitors are alike
Presumption 5: events create lots of employment
Presumption 6: all the expenditure of all event-goers can be counted as economic benefits
Presumption 7: multipliers and/or economic models must be used to estimate the ‘secondary’ impacts of events. (Getz 2005, p. 385-389)
Brazil budget: $13.3bn
South African budget: $4bn, but overblown by $12bn
Full transcript