Tuesday, December 20, 2005

Economic Impact of Festivals and Cooking Competitions

Two festivals in Charleston, SC held in 2000 generated $43 million in economic impact to the city and surrounding area according to a study by the University of South Carolina. The newspaper in my local community ran a front page story a few months ago about why they had to squash plans to host a chili cook-off in the city where I live. Without going into the politics of it all, the basic response city representatives gave for not supporting the contest is that the event had become too large for the community and it was drawing too many people into the city.

I couldn't help but equate the growth of bbq contests popularity to the situation.The city executives said that the expense of supporting the event with law enforcement had become too expensive and they simply could not afford to support the event any longer. One thing I think that the city is forgetting, or not giving enough weight to, is the potential economic impact the event could have on the city. Last year was the ninth year for the event and it drew 20,000+ visitors to the downtown area.

The newspaper quoted officials as saying the the expense of positioning 4 police officers at the event exceeded the benefits. I am more familar with potential effects a barbecue contest has on a community than chili contests, but let me go over the potential economic impact of cook-offs in general.

Direct Impacts:

Display booth rental
Advertisement income (from event program sales)
Sponsorship income Vendor booth rental

Indirect Impact:

Grocery Stores
Gas Stations
Discount Stores

Based on some Google research, a published report studying small town festivals list the potential impact of such an event at $150,000 - $200,000 or more depending on the level of support the event receives locally in the form of volunteers who are willing to support the event and to support their local community.

Suppose that the city made some sort of arrangement that they would keep part of the proceeds from vending to offset costs and suppose the 20,000 people in attendence at the one day event each purchased a $2 bowl of chili, that's $40,000 in potential revenue.

If the city kept 20 percent or $8,000, wouldn't that more likely than not pay for the expense of having extra law enforcement on duty for the event?

In the case of my local community, I think the executive may be missing the boat on what could potentially become a long standing tradition and source of pride for the residents.

In Tennessee, near where I used to live, the City of Columbia holds an annual "Mule Day" celebration that is supported by folks from more than 38 states on an annual basis. The economic impact of the event according to published reports totals approximately $14 million. Granted, the event dates back to the 1930's and has been held consecutively since 1974, but the event demonstrates the potential for bbq cook-offs, chili cook-offs and festivals in general to generate considerable economic impact on a city and the surrounding areas.

To keep this bbq related:

According to their website, the annual Memphis in May celebration provides $30 million in economic impact to the City of Memphis and is the largest tourism event the city see's all year.

The American Royal website contains a news release stating that the economic impact to Kansas City totals $62 million and revenues from the event increased 6% and attendance increased 11%

Maybe some of this data will help organizers and civic organizations approach their local leaders and educate them on the value of community festivals and competitions to their local economy.

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