In mid-October, USA Pro Challenge officials released the economic impact study for the 2012 Professional Cycling Race. Essentially, the results are comparable to last year – a lot of people watched the race and “new” money was spent in the state as a result of the event. The “measured” economic impacts were just shy of $100 million.
Intangible Benefits
Of the various contributions to Colorado, the intangible benefits resonate with more people.
• Colorado has a tradition of bicycle racing that dates back to the Red Zinger Classic. Like its predecessor, the Pro Challenge is an event that reflects the outdoor, fitness-minded personality of the state.
• There were 31 hours of race coverage on NBC and NBC Sports Network in the U.S. As well, participants came from 25 states and the race received coverage in 175 countries. The mountain communities of Colorado present the state in a favorable light.
Attendance
Measuring the attendance of the Pro Challenge is difficult, to say the least.
• Race officials reported that 1+ million people attended the event both last year and this year.
• Throughout the race, the media suggested that attendance was down in some cities. They created the impression that overall attendance was less this year, but that the event was well received.
As a point of reference about 600,000 people attend 8 Denver Bronco home games, slightly more than 600,000 people visit the National Western Stock Show (NWSS), and 2.5 to 3.0 million people go to Colorado Rockies games.
Economic Impact
Economic impact analyses for events provide a general overview of economic activity in the region that is a direct result of that event. Some methodologies will present a breakdown of activity by wages and direct expenses related to the event. As well, expenditures in the region may be summarized for such things as lodging, food, or transportation.
If methodologies are similar, it is possible to compare the economic impact of multiple events. For example, the impact of the Pro Challenge is slightly less than the estimated impact of the NWSS. The impacts of the Women’s Final Four and the Crossroads Volleyball Tournament are about $20 million each. Each of these events has different levels of impact and makes distinct tangible and intangible contributions to the local economy.
Most economic impact studies do not look at the fiscal impact or the net fiscal impact of events. Those analyses are pertinent for many of the towns or regions because they compare tax revenues generated by the event to expenses of the events as a tool for determining their fiscal value to the community.
The economic impact of the Pro Challenge follows:
• The estimated economic impact to the state is $99.6 million compared to about $83.6 million last year.
• Given that attendance was similar for the two years, the increased impact is most likely a result of changes in the host towns.
• The press release stated that “Fans from outside the state and Coloradans traveling 50 miles or more to take in an event stage contributed $81.5 million on lodging, food, transportation and entertainment. The remaining economic impact came in the form of team, staff, sponsor and vendor spending, employment created by the event, and the resulting tax effects of the race.”
• The press release did not provide a breakdown of per capita spending (spending by Coloradans traveling at least 50 miles, out of state travelers, and locals).. Such an analysis may be in the full report and would help identify the true impact of the type of visitor to the tourism industry. Similarly, it would be valuable to understand the breakdown of spending by category (lodging, food, etc.)
• Since team, staff, sponsor and vendor spending and tax effects totaled about $18.1 million. It is likely that the fiscal contribution to the state, i.e. taxes paid, was a minor part of the total impact.
Other Interesting Tidbits
The research firm also collected the following snippets of information about the visitors:
• The average size of the travel parties was three people.
• While the median household income (HHI) of Colorado residents is $56,456, race spectators averaged a household income of $110,000.
• Surely, there is a typo in the above sentence. It is not appropriate to compare a median of one group to an average of another group. In most data sets the values of a median and an average are significantly different.
• It is also important to evaluate how the HHI for the spectators (median or average) compares to the HHI for non-spectators visiting the host cities. That will make it easier to differentiate whether cycling spectators have larger pocketbooks than other travelers.
• About 86% said they were very satisfied or satisfied with the race.
• More than half of spectators ride a bike for fitness and about 22% ride a bike occasionally or not at all.
• Slightly more than 93% watched part of the Tour de France on television.
• As a point of reference, the world-wide number of television viewers is 45 to 50 million. Does it make sense that about two percent of those viewers watched the Pro Cycling Challenge in person?
• About 64% of the spectators wanted to witness the elite level of competition, 45% were interested in the destination cities and 46% wanted to experience the start/finish festivals.
• About 75% of out-of-state visitors were more likely or much more likely to visit Colorado again based on their experience at the USA Pro Challenge.
• The press release stated “53% of spectators claimed they would not have traveled to Colorado at this time if it were not for the race. And with that, 75.8% stated they were very likely or likely to return to watch the race next year.”
o For these numbers to have full meaning, it is necessary to understand how many of the 1+ million spectators were local and how many were from outside the area. Presumably that information is included in the report.
Overall, these results paint a positive picture of the impact of the Pro Challenge race.
Conclusion
The USA Pro Challenge is one of many sporting events (Professional and college sports, ongoing events such as the NWSS, and other special events such as the Women’s Final Four) that contribute to the state economy and the perception that Colorado is prosperous state, with a diverse economy, and an active lifestyle.