Are you measuring, communicating and leveraging the economic impact of your meetings and events? Economic impact offers a complete picture of the total revenue generated by your event, from lodging revenue to food and beverage expenditures to state and local tax revenue. Having comprehensive economic impact data is critical to communicate the value of your event during the bid process and beyond.
A recent study from Oxford Economics in conjunction with EIC and Meetings Mean Business shows the industry’s economic value has grown by 23% since 2009. The study quantified the total room demand of meetings of 300 million room nights, which includes both the contracted room block and rooms booked outside the organizer’s room block. This finding is significant for the industry to recognize simply because the room demand of events is far greater than what is being captured in the traditional room block.
On average, each meeting participant supported $416 of tax revenue in 2016, including $215 of federal tax revenue and $165 of state and local tax revenue. The total tax impact per household was $879 per U.S. household in 2016. This tax offset represents the federal, state and local taxes that would otherwise need to be paid per U.S. household to compensate for the absence of meeting sector activity. The state and local tax impact per household was $348.
Image Credit: K. Summerer for Visit Alexandria
Show Your Value
Let’s face it, going into the bidding process is a daunting task for planners, so having this type of market intelligence is substantial leverage. Instead of saying, “I would like to come to your city, is there anything you can do for me?” You can now say, “I would like to come to your city, and this is what I am worth to you, now what can you do for me?” By providing real actionable business intelligence from a trusted third party allows the planner to better show their worth to the destinations and gain bargaining leverage. By incorporating both big picture and granular, detailed data, a planner can be confident in the accuracy of their impact projections. Also showing that you are “in the know” regarding this type of information adds credibility to negotiations.
The “ingredients” of the analyses incorporate a comprehensive set of figures and projections. This includes lodging revenue, both inside and outside of the block, as well as estimates of short-term rentals, such as AirBnb. On top of lodging revenue, event attendees invariably generate revenue through their own expenditures on, for example, food and beverage, entertainment, and shopping. Transportation, including both event-provided transport, car rentals, parking and local transport such as ride sharing and taxis, is another area that is important to measure. Event vendor spend on categories such as catering is also factored in. Finally, a range of state and local taxes apply to each of these expenditure categories. These tax revenue figures add significant credibility and bargaining power to host city negotiations.
Image Credit: M. Enriquez for Visit Alexandria
Understand Attendee Demographics
The demographics of the attendees of a given event are also important to understand. Who is coming to the event? Where are they likely to stay? What are their likely additional expenditures? Depending on event type and location, it is possible to estimate the attendee expenditures discussed as well as propensity to stay outside the block, whether in another hotel or a short-term rental. In addition, accounting for event type and location, number of persons per room can be estimated. As an example, in Las Vegas, an estimated 14% of conference visitors further generate revenue by visiting nearby places, like the Grand Canyon or Hoover Dam.
City characteristics can also influence economic impact estimates. Are there easily accessible neighboring areas that might be more affordable? Depending on the type of event, this may or may not be a factor in attendees’ decision vis-à-vis where to stay. Further, growth in short-term rentals for business travel is also taken into account. Demographic information can be used to estimate the propensity of attendees to exercise this option.
In the case of ShowScore, a comprehensive data picture draws from a range of sources. In addition to information inputs by the planner such as number of attendees and contractual peak block, ShowScore calculations factor in a variety of external and internally-generated statistics and projections. Partnership with local CVBs and city and state tax authorities ensures that the data is up-to date. Data aggregators such as STR and CBRE are also excellent sources of top quality data.
Comparison between perspective host destinations further informs decision-making and strategy. Knowing relative “bang for buck” can help planners decide which destinations to approach, and further convince destination cities that your pitch is fully informed.
Insider Tip: When sourcing your meeting, including the value of your event saves time and gets your RFP noticed and moved to the top of the list. Make it easy on yourself and ask for the data immediately following your meeting. Your CVB rep can help!
John Sparico, CMP, is vice president of business development at ShowScore. Prior to joining ShowScore he assisted organizations such as Oracle and D.C.-based start-up Social Tables undergo dramatic and positive transformations. John has a diverse background in sales and marketing, with extensive experience in client communications and event management.
Header image by Cameron Davidson for Visit Alexandria