Rebekka Dudensing, Texas AgriLife Extension Service I January Economic Impact of the Brazos

Transcription

1 Rebekka Dudensing, Texas AgriLife Extension Service I January 2014 Economic Impact of the Brazos Brazos County County Expo Expo Complex Complex: Economic Fiscal Impact Year of Surveyed Events, Fiscal Year

2 Section I. Expo Events The Brazos County Expo hosted 155 events over 306 days in FY, up from 140 events over 262 days in FY More than 82,000 visited the Expo to attend horse and livestock events, trade shows, parties, the Brazos Valley Fair & Expo, and other events, up 17% from FY2012. Expo receipts paid by event organizers totaled $680,300, a 27% increase over FY2012. Total receipts, including stall and equipment rentals and sales of stall shavings paid by individuals rather than event organizers, totaled $887,600. Table 1 shows the number of events, event days, attendance, and event bills by event type. Table 1. Expo events by type, event count, days, attendance and bill, FY. Macro Event Type Specific Event Type Event Count Booked Days Attendance Invoice Horse Show Horse Show ,590 $189, Livestock Show Livestock Show ,480 $44, Rodeo ,500 $11, Rodeo, Other Equine Events Roping ,800 $22, Barrel Racing ,800 $111, Meetings, Seminars, and Educational Event ,455 $32, Educational Events Meeting ,800 $12, Career Fair 3 7 4,050 $18, Conferences, Career and Trade Fairs Conference 3 6 1,120 $17, Trade Show ,850 $41, Miscellaneous Miscellaneous 1 2 1,000 $4, Outdoor Event ,589 $9, Banquet ,315 $33, Fundraiser Banquet ,190 $45, Fundraiser 3 3 3,000 $10, Private Events Party 8 9 2,715 $15, Other Private Event $2, Religious $2, School Dance 3 3 3,180 $8, Wedding Reception ,815 $45, Total ,224 $680, Total receipts, including fees paid by individuals $887, *The miscellaneous category includes the Brazos Valley Fair & Expo with 15,719 tickets. The table above includes partnership events. Partnership events are held at the Expo but likely would have been held in Brazos County regardless. Some partnerships are part of larger events for which the Expo hosts only one component (e.g., the Special Olympics athlete village and the TTI fajita fest). Other partnerships reflect the availability of the Expo for local events such as the county/districts clerks association banquet. These partnership events are not included in the analysis of spending and economic impacts. 2

3 Revenue-generation is a priority for Expo management and staff, but Expo visitors generate more economic activity in Brazos County outside the complex than within it. Crompton and Culpepper note that publically owned facilities are often important parts of the economy because they attract visitors and non-local spending. i Indeed, such facilities are often built with a goal of garnering such outside spending as well as providing a venue for local events and fostering pride in the community through hosting a variety of events. The spending component of the facility s purpose suggests the appropriateness of an economic impact study. Section II. Spending and Impacts of Surveyed Events During FY (October 1, 2012 through September 30, ) a total of 39 events were surveyed, including 20 events for which individual participants were surveyed and 19 events for which event organizers were surveyed. spending and economic impacts in are based on the 20 events surveying individual participants. These 20 events represent 73 booked days involving 13,400 people. The 19 organizer-surveyed events represent an additional 24 days with 17,000 people. Results from the event organizer surveys are discussed in Section IV. Each surveyed event had a different spending pattern. spending per person, as reported in surveys, was multiplied across the respective event attendance to determine total event spending. The spending by category for the 20 participant-surveyed events is summed in Table 2 for both visitors to Brazos County and locals. Table 2. Spending by sector for the populations of surveyed events, FY. Spending Category Expenditures by Visitors Expenditures by Locals Lodging $635,630 $9,010 Food & Beverage $518,550 $41,380 Private Auto $443,320 $21,680 Retail Shopping $328,080 $13,490 Entertainment $44,910 $1,840 Access Fees $984,280 $50,150 Miscellaneous $187,050 $5,410 Total $3,141,820 $142,960 Total less access fees paid outside Brazos County $2,844,900 $130,940 The direct spending by visitors to the Expo Complex is not the only benefit to the local economy. Economic contribution analysis is based on the idea that a dollar spent in a region stimulates additional economic activity, or multiplies as it circulates through the economy. This multiplier effect recognizes that the total effect on output, employment, personal income, and government revenue in the region is greater than the initial dollar spent. A visitor s expenditure at a local restaurant or store contributes not only to that business, but to its suppliers and its suppliers suppliers (the indirect effect), the incomes of each of their employees who then spend their earnings (the induced effect), and tax revenues. Of course, some of the original expenditure leaks out of the regional economy, for example as inventory is imported from other regions, employees commute from other regions, and businesses and households pay state and federal taxes. Multipliers are calculated based on the purchasing patterns of industries and institutions in the regional economy. The total effects are the sum of direct, indirect and induced for each of the outcomes: employment, labor income, total value added (contribution to gross regional project) and 3

4 output (gross sales). Only expenditures by visitors are included in the economic impact analysis because their spending represents new money in the county economy. It is assumed that local county residents might have spent their money elsewhere in the county if they had not attended an Expo event; thus there is no economic impact. Access fees are excluded from the impact analysis because the fee is often paid to an event sponsor located outside Brazos County, and much of the fee is likely an immediate leakage from the local economy. Three types of multiplier effects are reported in the impact analyses. The Output or sales multiplier measures the effect of external spending on overall economic activity in the region. The output multiplier provides the largest economic impact value and therefore is reported in many studies; however, the output multiplier says nothing about how the event affects the welfare of households or the profitability of businesses. The value-added multiplier is a more appropriate measure of regional welfare. The valueadded multiplier measures Expo visitors contribution to regional gross domestic product (GDP). It is the value added to the regional economy or the return to local resources used in the production of goods and services in Brazos County. The labor income multiplier is part of the value-added multiplier but is often reported alone. The wage and proprietor s income multiplier measures the effect of final demand spending on the incomes of households in the region and is appropriate for discerning the benefit of an event to a region s residents. The employment multiplier measures the effect of the event on regional employment. Calculation of the employment multiplier assumes that existing employees are fully occupied and does not distinguish between full-time and part-time workers. The original $2.8 million direct economic contribution from visitor spending (less access fees paid to entities outside Brazos County) leads to a total county-level economic output of $4.4 million and 58.0 full- and part-time jobs annually (Table 3). ii This total contribution includes a $2.7 million contribution to gross regional product and a $1.7 million contribution to labor income across the region. Labor income is a component of value added, which is a component of output, so the figures in Table 3 cannot be summed. Again, these impacts represent only the 20 events for which participants were individually surveyed in FY. Table 3. Economic impact of visitors at surveyed events during FY. Direct Effect $2,844,900 $1,800,000 $1,192, Indirect Effect $630,900 $345,700 $217, Induced Effect $919,500 $561,700 $308, Total Effect $4,395,300 $2,707,500 $1,717,

5 Section III. Spending and Impacts Extrapolated Across Event Types. Not every event could be surveyed due to constraints on staff and volunteers as well as the characteristics of the events themselves. However, non-surveyed events also contribute to the local economy. Each event, and each individual participant, has a different expenditure pattern, although similar types of events tend to produce similar spending patterns. A different sample of events is surveyed each year in order to capture the spending patterns of a broad array of events. To improve the reliability of expenditure data, a three-year-average will be used beginning in fiscal year In, categorized expenditures for each event type were averaged for the 2012 and fiscal years. Spending averages were weighted by person-days of the surveyed events in each event category. Expenditures in were notably higher than consumer price index-adjusted 2012 expenditures, due in part to garnering larger shows associated with higher-spending clientele. Therefore, average expenditures per person per event-day were also used to extrapolate expenditures across event types. The average and the calculation are presented in the tables to provide a range of expenditures and impacts. Only the average is discussed in the text. Horse shows made up 22 of 155 events at the Expo (14%). Using average spending, an estimated $653,600 was spent by out-of-county participants and attendees at the 22 Expo horse shows in FY, resulting in an economic impact of $1.0 million in output and 13 jobs (Tables 4-6). Note: Ropings and barrel races were reclassified as other equine events rather than horse shows in, so horse show numbers are not comparable to the 2012 report. Table 4. Extrapolated spending by sector for the populations of all horse shows, FY. Spending Category Expenditures by Visitors Expenditures by Locals Lodging $185,100 $243,100 $24,200 $22,900 Food & $150,300 $200,000 $12,700 $16,400 Private Auto $118,400 $138,800 $10,800 $16,200 Retail Shopping $47,600 $73,800 $400 $600 Entertainment $10,600 $17,900 $2,800 $0 Access Fees $284,200 $372,200 $46,700 $64,800 Miscellaneous $20,500 $35,500 $4,000 $8,000 Total $816,600 $1,081,300 $101,600 $128,800 Total less nonlocal access fees $653,600 $867,800 $77,000 $94,600 Table 5. Economic impact of visitors at all horse shows, FY (2012- average spending). Direct Effect $653,600 $398,100 $259, Indirect Effect $157,800 $85,700 $54, Induced Effect $204,200 $124,800 $68, Total Effect $1,015,600 $608,600 $381,

6 Table 6. Economic impact of visitors at all horse shows, FY ( reported spending). Direct Effect $867,800 $529,000 $345, Indirect Effect $209,900 $114,100 $72, Induced Effect $272,000 $166,200 $91, Total Effect $1,349,800 $809,200 $508, Livestock shows made up 9 events. An estimated $530,600 was spent by out-of-county livestock show participants and attendees at those 9 events (using average spending), resulting in an economic impact of $823,400 in output and 12 jobs (Tables 7-9). Table 7. Extrapolated spending by sector for the populations of all livestock shows, FY. Spending Category Expenditures by Visitors Expenditures by Locals Lodging $181,700 $167,200 $0 $0 Food & $145,900 $139,100 $72,800 $102,200 Private Auto $94,400 $77,900 $55,700 $42,700 Retail Shopping $46,500 $57,900 $34,500 $18,500 Entertainment $6,100 $9,400 $0 $0 Access Fees $89,800 $97,300 $41,100 $45,100 Miscellaneous $41,300 $66,700 $55,100 $81,900 Total $605,600 $615,500 $259,100 $290,400 Total less nonlocal access fees $530,600 $534,200 $256,700 $287,700 6

7 Table 8. Economic impact of visitors at all livestock shows, FY (2012- average spending). Direct Effect $530,600 $329,200 $208, Indirect Effect $128,300 $68,800 $43, Induced Effect $164,600 $100,500 $55, Total Effect $823,400 $498,600 $307, Table 9. Economic impact of visitors at all livestock shows, FY ( reported spending). Direct Effect $534,200 $339,200 $217, Indirect Effect $123,800 $66,600 $41, Induced Effect $169,000 $103,300 $56, Total Effect $827,100 $509,100 $315, The expo hosted 11 rodeos, ropings, and barrel races in. An estimated $1,636,000 was spent by out-of-county rodeo and other equine event participants and attendees at those 11 events, resulting in an economic impact of $2.5 million in output and 33 jobs (Tables 10-12). Table 10. Extrapolated spending by sector for the populations of all rodeos and other equine events, FY. Spending Category Expenditures by Visitors Expenditures by Locals Lodging $219,800 $261,300 $7,000 $6,700 Food & Beverage $264,200 $310,500 $55,800 $42,800 Private Auto $327,900 $383,700 $33,800 $37,900 Retail Shopping $211,800 $276,700 $22,000 $24,100 Entertainment $26,400 $29,900 $8,200 $6,900 Access Fees $752,500 $668,700 $122,500 $61,900 Miscellaneous $49,200 $50,500 $7,700 $9,300 Total $1,851,700 $1,981,300 $256,900 $189,500 Total less nonlocal access fees $1,636,000 $1,789,500 $178,600 $171,700 Table 11. Economic impact of visitors at all rodeos and other equine events, FY (2012- average spending). Value Added Labor Income Direct Effect $1,636,000 $1,058,600 $712, Indirect Effect $330,200 $183,600 $114, Induced Effect $539,600 $329,600 $180, Total Effect $2,505,700 $1,571,800 $1,008,

8 Table 12. Economic impact of visitors at all rodeos and other equine events, FY ( reported spending). Value Added Labor Income Direct Effect $1,789,500 $1,176,500 $783, Indirect Effect $352,300 $195,000 $121, Induced Effect $591,200 $361,200 $198, Total Effect $2,733,000 $1,732,700 $1,103, Thirteen conferences, career fairs, and trade shows were held in. Expenditure data for this event type remains preliminary. Sufficient data was available to estimate visitors expenditures but not locals expenditures. An estimated $238,900 was spent by out-of-county participants, resulting in an economic impact of $379,100 in output and 5 jobs (Tables 10 and 11). Table 13. Extrapolated spending by sector for the populations of all conferences, FY. Spending Category Expenditures by Visitors Lodging $126,600 Food & Beverage $51,800 Private Auto $27,200 Retail Shopping $21,300 Entertainment $7,000 Access Fees $58,000 Miscellaneous $5,100 Total $296,900 Total excluding access fees $238,900 Table 14. Economic impact of visitors at all conferences, FY (2012- average spending). Direct Effect $238,900 $137,600 $84, Indirect Effect $69,400 $36,700 $23, Induced Effect $70,800 $43,200 $23, Total Effect $379,100 $217,500 $132,

9 Twenty-one meetings and educational events were held in, of which 13 targeted nonlocal populations while the remainder hosted mostly locals. Expenditure data for meetings and educational events remains preliminary. Data was available to estimate visitors expenditures but not locals expenditures. An estimated $253,100 was spent by out-of-county livestock show participants and attendees, resulting in an economic impact of $408,400 in output and 5 jobs (Tables 12 and 13). Table 15. Extrapolated spending by sector for the populations of all meetings and educational events, FY. Spending Category Expenditures by Visitors Lodging $169,000 Food & Beverage $54,000 Private Auto $20,700 Retail Shopping $3,900 Entertainment $4,400 Access Fees $3,500 Miscellaneous $1,100 Total $256,500 Total excluding access fees $253,100 Table 16. Economic impact of visitors at all meetings and educational events, FY (2012- average spending). Direct Effect $253,100 $133,700 $80, Indirect Effect $84,300 $44,400 $29, Induced Effect $71,100 $43,400 $23, Total Effect $408,400 $221,500 $133, Reliability of spending data will be improved as more data is available to complete a threeyear average. Future data collection will target conferences and meetings to better extrapolate spending across these event types. Section IV. Spending Associated with Private Events. The Expo hosts many private events, including fundraisers, organizational banquets, dances, and receptions. Surveying the attendees of such events is inappropriate. However, the organizers of 19 private events were surveyed regarding their expenditures in, representing approximately 17,000 attendees, including at least 7,600 visitors to Brazos County. Some of these events were partnership events, including the Texas Transportation Institute community event and Fajita Fest and the Chamber of Commerce Youth to Career Fair. Other events were primarily local in nature, such as Extension and Coalition for Life banquets. Other organizer-surveyed events included other banquets and lunches, wedding receptions, Taste of the Brazos Valley, and the Special Olympics Athlete Village. Data 9

10 provided by event organizers reflects costs of the event beyond fees paid to the Expo, but they do not include individual participants expenditures. reported expenditures to host an event were almost $6,700 in addition to Expo charges. Expenditures were highly variable across event types and sizes. The median expenditure was lower at $3,500 per event with a range of $0 to $39,000. Even at the lower median, these expenditures total $248,500 across the Expo s calendar of private events. Food and catering charges were a large category with average expenditures of more than $3,700 per organizer-surveyed event. Entertainment was an important category for banquets and receptions, although expenditures varied widely by type of entertainment (e.g., DJ versus band). Some organizers reported substantial local advertising expenses. Several event organizers also blocked rooms at local hotels for guests; however, hotel block data were not sufficient to extrapolate across events. Hotel and other expenditures by participants were not included in organizers responses. Wedding receptions averaged $6,000 in food costs (excluding alcohol) and $1,000 to $2,500 for flowers and decorations, plus $500 to $1,200 for entertainment (e.g., DJs). Extending these spending patterns over 18 wedding receptions in FY, expenses in just these three categories totaled more than $150,000. Section V. Summary Across the five types of events extrapolated, visitors to the county spent an estimated $3.3 million, calculated by average FY spending. These visitors contributed approximately $5.1 million in total sales and 67 full and part-time jobs across the county economy. When the larger spending figures are used, visitors spent almost $3.9 million, contributing $6.0 million and 79 jobs in Brazos County. Table 17. Economic impact of visitors at extrapolated across five event types, FY (2012- average spending). Direct Effect $3,312,200 $2,057,300 $1,345, Indirect Effect $769,900 $419,200 $264, Induced Effect $1,050,200 $641,600 $351, Total Effect $5,132,300 $3,118,100 $1,962, Table 18. Economic impact of visitors at extrapolated across five event types, FY ( reported spending). Direct Effect $3,859,200 $2,410,900 $1,569, Indirect Effect $896,000 $486,500 $307, Induced Effect $1,224,500 $748,100 $410, Total Effect $5,979,600 $3,645,500 $2,287, The above estimate does not reflect the expenditures of people attending wedding receptions and other private events at the Expo, which are discussed in Section IV. Nor does it reflect the value of expenditures by locals attending Expo events or the value of having a venue where locals can host and 10

11 attend community events. Furthermore, this analysis does not include the value of the Expo s own sales and expenditures, which resulted in an economic impact of $1.4 million and 13 jobs in FY (Table 19). The impacts of the Expo s operations include a portion of access fees and participant charges (e.g., for stall bedding); thus operations impacts cannot be summed with the expenditure impacts above. Table 19. Economic impact of Expo operations, FY ( receipts). Direct Effect $887,600 $489,600 $373, Indirect Effect $218,700 $126,400 $81, Induced Effect $293,800 $179,400 $98, Total Effect $1,400,100 $795,400 $552, i Crompton, John, and Juddson Culpepper The Economic Contribution of Texas State Parks in FY Texas A&M University, Department of Recreation, Parks, and Tourism Sciences, College Station, TX, December. ii Impacts were calculated using IMPLAN (MIG, 2010). 11