Tag: Economic Activity

Colorado Crossroads – Girls’ Sports Impact the Colorado Economy

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One of Colorado’s top sporting events does not include the Broncos, Rockies, Nuggets, or other professional athletes. Instead it is an event that spans nine days and involves about 12,000 middle school and high school girls competing for slots in the USA Volleyball Girls’ Nationals.

This year the Colorado Crossroads was held March 2-4 and 8-10 at the Colorado Convention Center.  A few key facts about the event are listed below.
• The tournament started in 1985 and is one of nine national qualifiers.
•It has grown from 100 teams to over 1,200 teams.
• The first weekend featured team play in the 16, 17, and 18 year-old divisions.  Just under 6,000 players competed on 651 teams.
• The second weekend play was held for 12, 13, 14, 15 year-old divisions.  About 5,500 players represented 594 teams.
• A total 41 of teams in the various age brackets qualified for Nationals in Dallas.
• Nearly 167,000 people visited Denver because of the event.
• Seventy percent of the participants are from out-of-state.
• The caliber of play at Crossroads attracted 292 college scouts from 44 states registered to attend the event.
• The event is played on 88  courts. Players compete in pool play the first two days of the event. A single elimination tournament rounds out play on the final day.
• This year, the Convention and Visitors Bureau’s economic impact model, provided by the Destination Marketing Association International showed that the 2013 event was worth about $26 million to the Denver economy. Tournament directors believe this is a conservative estimate.

In addition, there are many intangible benefits associated with the event. It promotes the value of physical activity for young women. As well, it showcases Colorado’s active lifestyle and demonstrates  the state is a wonderful place to live, work, and play.

 

Bolder Boulder – $10 Economic Impact

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The Boulder Boulder road race is not just another 10K, it is an event that many Coloradans say you have to participate in at least once in your life. In fact some have suggested that running in the race should become a requirement for residency in the city. (The anti-growth segment of Boulder would add that only those who can run at a six minute a mile pace or better should be admitted on a permanent basis.)

Since its inception in 1979, the event has become a Memorial Day tradition and is a key part of the Boulder culture and sports scene. From a business perspective it is an event that has touched a variety of sectors within the local economy.

The Daily Camera reported (May 14, 2012) that the event has about 54,000 runners and 100,000 spectators. In one weekend the event has a $10 million impact on the City of Boulder.

The DC also reports (May 22, 2012) that total expenses for the event are almost $3 million. Some of the larger and more interesting expenses associated with the event follow:
• $371,442 for race shirts and numbers.
• $173,977 for printed materials and banners.
• $160,350 for prize money for the professional runners.
• $100,279 for results, timing, and scoring.
• $81,057 for postage for entry forms, finish certificates, medals, etc.
• $69,589 for transportation, accommodations and meals for professional athletes.
• $54,819 for costs covering the floor of the stadium to protect the turf on Folsom field.
• $33,968 scaffolding in the stadiums and along the course.
• $19,960 audio and video tribute (Memorial Day).
• $15,740 portable toilets.

For additional details about the Bolder Boulder, click here.

 

Women’s Sports Touted as Contributor to Colorado Economy

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On February 17th, the Denver Post reported “Women’s sporting events to be economic blockbuster for Denver.”

In the article, which was posted in the business section, Rich Grant of Visit Denver stated, “Women’s sports are becoming a huge economic engine, and Denver is poised to be known as a major center for this.” In particular, Grant was referencing the Colorado Crossroads volleyball tournament and the NCAA Women’s Final Four.

The Colorado Crossroads tournament is one of 9 national events where teams can qualify for the USA Junior Nationals. The Post reported that it will draw 11,000 players and 33,000 spectators over a two week period in late February and early March. The projected impact is about $22 million, with most of the benefit accruing to rooms, food, taxis, rental cars, trinkets, and other souvenirs.

The tournament reportedly hosted about 100 teams ten years ago, but is expected to attract 1,100 teams from 34 states this year. This speaks to the growth in the popularity of volleyball, the increased impact of USA Volleyball, and greater interest in women’s sports.

The NCAA Women’s Final Four will be in Denver April 1-3. In addition to the three games, the playoffs are billed as a three-day party, including events at the Colorado Convention Center prior to the tournament and a concert by Jewel. The direct economic impact is expected to be about $20 million. As with the volleyball tournament, the businesses that will feel the impact are hotels, restaurants, transportation, and retailers.

There is still hotel space in Denver during the Final Four and tickets were still available at the time the article was published. The Post cited enthusiasts who projected that hotel and tickets would pickup in the weeks ahead.

The two events attract very different crowds, which speaks to the diversity of the appeal of the region. The volleyball tournament will attract families to the area, who will likely spend less per person because of budget and time constraints. The Final Four is a special activity, which will have more corporate appeal. It will attract a crowd that is more likely to have time to explore the city and spend more in the local economy on a per capita basis.

The first event portrays Colorado as a place to be for participant sports, while the latter positions Denver as a location for the country’s top sporting events. The Final Four is expected to be covered in 177 countries.

As well as discussing the impact of the Colorado Crossroads and Final Four, the Post listed the economic impact of other previous sporting events:

2012 Women’s Final Four – $20 million – projected (direct benefits only)
2012 Colorado Crossroads -$21.9 million – projected (direct benefits only)
2008 NCAA Frozen Four Men’s Hockey – $15 million (direct benefits only)
2007 Rockies World Series (Games 3 and 4) – $10 million (may include direct benefits)
2006 AFC Championships $21 million (may include indirect benefits)
2005 NBA All-Star Game – $30 million (may include indirect benefits)
2004 Mountain West Conference Men’s Basketball – $4 million (
2002 Grand Prix Denver – $30 million (may include indirect benefits)

Comparisons of these events should be made with caution. Most likely these impact studies were calculated using different models. While the major source of impact for all events is food, room, transportation, and the purchase of goods and services, different methodologies may produce results that may not be comparable.

As mentioned above, some of the studies include direct impacts only while others include a much broader contribution to the economy (direct and indirect impact). This is like comparing apples and apple pie – they are different.

While it is important to understand the challenges in producing valid and reliable economic impact studies, the real point is that one-time special activities, such as sporting events, conventions, or film production can have a short-term positive impact on local economic activity. (This does not guarantee they have a positive fiscal impact on the economy.)

Of equal or greater importance are the intangible benefits of an event. Quite often they far exceed the economic activity. The above events have portrayed Denver in a positive light and helped mold the perception that it is a great place to live, work, and play.

 

Colorado Pro Cycling Race’s Economic Impact – $84 Million

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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.