On October 19, 2001 the Denver Business Journal published a report stating “The inaugural USA Pro Cycling Challenge brought an $83.5 million economic impact to Colorado. By comparison, the National Western Stock Show generates over $100 million of economic activity with about 700,000 visitors. They are similar events in that visitor spending is the major source of economic activity.
The DBJ went on to say:
• $67.4 million in direct spending on lodging, food, transportation and entertainment by more than 1 million visitors who watched the race in Colorado.
• 22.9% of race visitors came from out of state, with 71.6 percent of them saying the race was their specific reason for visiting Colorado.
• 20.8% of visitors came from in-state and traveled more than 50 miles to see the race.
• The average party size for visitors from out of state or at least 50 miles away was five people.
• The average household income of spectators was $113,918.
• 94.2% of the spectators said they were likely or very likely to attend next year.
• The event received up to 25 hours of global television coverage (NBC and Versus) in 161 countries. This is an intangible benefit.
Clearly, the Challenge had positive economic impact, but the brief summary raises questions about the size of the impact.
• Colorado’s median household income is about $56,000 and the US median household income is about $51,000. It is difficult to understand how the average household income for all spectators could be $113,918 if almost 770,000 spectators were from Colorado.
• One million visitors had direct spending of $67.4 million on lodging, food, transportation, and entertainment. That equates to $67.40 for each visitor. A case can be made that the average household income of $113,918 would support a higher daily average. The spending data doesn’t seem to reconcile.
While it is appropriate to conduct analyses that only look at economic activity, at some point, the cities who host the events will be forced to ask the question, “Do local tax revenues exceed local costs?”
To that point the DBJ indicated that The Aspen Times reported Oct. 7 that city expenses associated with the race in exceeded tax revenues from visitors by nearly $16,000. How many other host cities experienced race related expenses greater than associated tax revenues?
It is evident that the USA Pro Cycling Challenge is an ideal match with the Colorado life style. Moving forward it will be necessary to have a better accounting of its economic and fiscal impacts on the state and the communities if it is to be an event that has a long-term future in the state. Challenge officials market the event as a Colorado event, not an event to promote the communities. If that continues to be the case, it may be necessary for the state to do more to cover a portion of expenses associated with future races.
