2012 elite/u23/junior/paralympic road national ......usac economic impact report 6 reported their...

2012 Elite/U23/Junior/Paralympic Road National Championships Economic Impact Report

Prepared for USA Cycling, Inc.

By

Daniel J. Larson, Ph.D. (University of Oklahoma- Department of Health and Exercise Science)

TABLE OF CONTENTS

Page

Executive Summary ............................................................................................................. 3

REPORT SECTIONS

1 Background/Purpose ........................................................................................ 5

2 Data Collection ................................................................................................. 5

Methods ...................................................................................................... 5

Responses ................................................................................................... 7

Analysis ....................................................................................................... 7

3 Results: Participant/Registrant Expenditures ................................................... 8

Lodging patterns/Hotel utilization .............................................................. 9

4 Results: Spectator/Visitors .............................................................................. 10

5 Resident Impacts ............................................................................................. 10

6 Summary Expenditures/Multiplier Effects ..................................................... 12

7 About the Researcher ..................................................................................... 14

A APPENDIX .............................................................................................................. 14

IMPLAN model assumptions ................................................................................. 14

USAC Economic Impact Report 3

Executive Summary

In order to fully characterize the economic impacts that USA Cycling national championship events have on host communities, this study was commissioned to perform an economic impact analysis of the 2012 Elite, Under 23, Junior, and Paralympic National Road Championships in Augusta, GA. The events were hosted in the Augusta, GA vicinity between June 20th and Jun 24th, 2012. The following summary list enumerates some key findings of the study, while the complete methods, results, and analysis follow in the body of the report. Key Findings

The Championships brought at least 1928 visitors into the Augusta, GA area. This consisted of 958 participants and an estimated 973 additional non-local spectators and travel companions. About 52% of the participants were ‘Adult’ (Elite Men, Elite Women, U23 Men, U23 Women, Paralympian), and the remainder were ‘Junior’ age competitors (18 and under). Only 1.4% of all participants live in the local area.

The Adult partcipants’ average reported spending was approximately $922 and included 4.2 nights lodging in the local area.

Lodging for event participants alone generated a ‘lower-bound’ minimum of over 2700 paid hotel room nights, with the true number likely closer to 5500 (assuming double occupancy).

About 21% of the Adult participants were also the parent or guardian of at least one Junior competitor, while approximately 6.7% of the Junior competitors were financially responsible for their own visit to Augusta.

The spending associated with the remaining Junior competitors, i.e. not attending alone or with another adult participant, was derived from the questionnaire responses of respective parents/guardians. On average, these guardians were financially responsible for 2.3 juniors, and including their own expenditures, spent an average of $1833 and 4.1 lodging nights in Augusta during their National Championship visits.

While the number of spectators was negligible for the Time Trial and Road Racing events due the rural and restricted access nature of the venues (< 200 maximum at each venue), the criterium racing venue in downtown Augusta drew a measured peak of 914 on-site spectators. Of these, an estimated 378 (41.4%) were non-local, non-competitor visitors to Augusta.

Non-local spectators reported spending an average of 3.8 nights in Augusta with average local expenditures of $773, for a total contribution of approximately $292,307 in direct local spending during their visits.

The total spectator counts at the criterium course ranged between 500 and nearly 1000 individuals, depending on the time of day and racing category competing. This is a notable level of viewership, considering that the marketing emphasis of the


championships is almost exclusively on the participants rather than the accumulation of a large audience.

The induced spending associated with the event organization also contributed nearly $53,000 in local expenditures to the Richmond county economy.

In total, the direct expenditures in Augusta, GA (Richmond County) associated with the USA Cycling National Championships’ presence was approximately $974,939.

Due to a variety of conservative assumptions, measures, and estimation techniques, these figures could be viewed as constituting a “lower bound” for the levels of direct spending a USA Cycling National Championships hosting should bring into a local community. In contrast to many commercially hosted and solicited economic impact analyses, which seek to paint the rosiest picture of an event, this report specifically sought to estimate the minimum verified impacts, with confidence that the “true” total impacts would only be greater than estimated.

When factoring the indirect and induced spending in the Richmond County economy, the events generated a total of $1,178,681 in independent economic impacts for the local community.

Contact Please direct any questions, concerns or inquiries to: Dr. Daniel Larson 1115 Mockingbird Lane Norman, OK 73071 [email protected] Phone: (352)262-7601

mailto:[email protected]


2012 USA Cycling Economic Impact Analysis

BACKGROUND/PURPOSE Every year, USA Cycling sanctions national championships in well over 500 category and discipline combinations. As one of its largest event properties, the Elite, U23, Junior, and Paralympic National championships regularly feature nearly 1000 participants traveling to where the events are hosted in the United States, to compete in multiple days of competitions. It can quickly be presumed that these events will have significant impacts on the economies of these host localities. Out-of-town attendees spend money in local businesses (direct spending), and a good portion of this money is recirculated within the community through local salaries (indirect spending), replenishment of inventories (induced spending), and local governments may witness increased tax revenues (e.g. sales, property, and income). Additionally, the event organizers also bring direct spending into the community by employing local labor and engaging in business with local vendors. The purpose of this study, commissioned by USA Cycling in cooperation with the local race director and the Augusta Sports Council, is to attempt to accurately estimate the total fiscal impacts of the 2012 USA Cycling Elite/U23/Junior/Paralympic Road National Championships events on one such location, Augusta, GA. This type of analysis has been conducted in the past for USA Cycling national championship events, e.g. Bend, OR; but much of the focus of those studies have been on tourism, and/or those studies have been conducted from the perspective of local visitor beaureau concerns. This study will focus more on the composition of visitors, as well as the typical spending patterns for different types of attendees, e.g. Elite, Junior, Parent/Guardian, and Spectators; such that USA Cycling can have the best information about the potential impacts/benefits that their national championship competitions might bring to prospective host communities.

DATA COLLECTION There were three main components of this economic impact analysis data collection:

(1) On-site participant survey (2) Competition venue spectator survey (3) Spectator/visitor estimations

Methods Participants: The participant data was collected at the event registration sites using both web-based and paper/pencil questionnaires. All event registrants (and Junior accompanying adults) were approached following their compulsory registration processing and asked to participate in a survey with the stated purpose of helping USA Cycling “understand the impact of the championships on the local community”. Upon agreeing to participate, volunteers were then offered either a touch-screen tablet or a paper questionnaire with identical questions (depending on the registration site) to complete. Within this instrument, they were asked to


reported their expected direct spending, any “financial party” companions, length of stay, and some basic demographic information. Spectators: The venue spectator survey was designed to determine the spending patterns of non-local, non-participant spectators associated with their visit to Augusta, GA. Their same basic demographic characteristics were collected in addition to their direct local spending, and length of stay. Crowd estimations: At the Time Trial venue, spectator counts were taken directly at the event Start/Finish site. Due to the rural locations and restricted access for both the Time Trial and Road Race venues, there were very few spectator accumulations, and they consisted almost entirely of other participants and parents/guardians of participants. At the Road Race Venues, spectator counts were also taken for the length of the course from race caravan vehicles, but still remained low. For the criterium venue, the spectator/visitor estimation was conducted using high-definition video recordings of the viewing crowd directly from the “pace car” vehicle. This technique allowed for a direct measue of nearly all of the individuals with a direct view or proximity to the race course.

The level of spectator accumulation was sampled at several points during the criterium competions. During the peak spectator levels of the event, approximately 7:00pm, still other researchers began randomly sampling sections of the course in order to determine the relative representation of three different groups: local residents, race participants, and non-local/non-participant spectators. This team of researchers used a random number generator to determine precise random distances to travel around the closed 0.96 mile course. At each set distance (data collection point) on the outside and inside perimeters of the course, the researchers sampled the spectators within one adjactent barricade length of the course. Their locations were noted and no course sections were sampled more than once. Additionally, during each data collection stop, those who indicated that they were non-local/non-participants were asked to participate in our study by filling out the questionnaire discussed above.

201 269 312 435

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1:35 PM 3:00 PM 5:30 PM 6:30 PM 7:30 PM

Junior Women Elite Men Junior Men Men U23 Elite/U23Women

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Criterium Venue Spectators

INSIDE COURSE

OUTSIDE COURSE


Responses In total, 349 registrant questionnaires were completed, yielding approximately 46% of the adult participants and 76 parents/guardians that accounted for 38.5% of the Junior competitors. The total number of of parent/guardians attending the championships was estimated by back calculating from the total junior entrants and the average number of juniors a parent/guardian was responsible for (2.33). In terms of responses to individual questionnaire items, there was some variation throughout the questionnaires. This arose either through incomplete/abandoned questionnaires, or through conscious non-response. In particular, the household income was often not reported (260 answered), but in general, the inquiries made about event spending and length of stay were complete (n = 323; 92.5%). In terms of the on-site spectator survey administered at the criterium venue, 145 individuals were asked and indicated whether they were local residents, partipants, or neither. Local residents comprised 49.7% of the crowd, while the remainder were either Championships participants (9.0%), or non-participant/non-local spectators (41.4%). Of the non-local, non-participant crowd members, 37 completed local economic impact questionaires out of 60 solicitations (61.7% response rate). Using this composition and the video measurements of the total crowd size, the estimated total number of non-local spectators was approximately 378 individuals. Analysis After compiling all of the data and estimating a summative amount for direct spending from all of the non-local spending parties entering the local economy, an IMPLAN analysis system was used to estimate the total economic impact of the event. Using this technique, we adopt a standard “Input-Output” framework wherein every additional “new” dollar of spending in the relevant economy, in this case Richmond County, has further impacts (ripple effects) on local businesses and industries that we can estimate based on a matrix of the local industrial characteristics. IMPLAN is a statistical software tool for this procedure that incorporates the particular characteristics and data of an area of interest (Richmond County). IMPLAN also allows us to specify industry categories to which spending is accruing, e.g. lodging, retail, food service, in order to realize the most accurate estimate of the events effects. This process necessarily excludes any local resident spending, as these activites would merely constitute transfers away from other local spending actions. Therefore, we specifically exclude spending data from the handful of local participants and any local spectators captured during the survey process.


PARTICIPANT/REGISTRANTS The participants/registrants (parents/guardians) at the Championships reported spending in the following categories:

Personal Spending associated with their own visit.

Spending for other adult competitors/companions that they were personally paying for.

Spending for any Junior competitors that they were financially responsible for.

Any spending from outside source made on their behalf in the local area, e.g. sponsor and team paid expenditures.

The descriptive statistics for each group are listed in the following tables.

The average reported total spending per visit night per person for Adult participants was $79. Parents/Guardians (n = 76)

Descriptives Mean SD Max Min

Age 49.29 6.90 58 21

Gender (% Male) 0.69 0.47 1 0

Household income $126,844.83 51,104.78 200,000 4500

# of Juniors financially responsible for 2.33 3.69 18 1

# of Adults financially responsible for 1.54 1.62 11 0

Days 4.93 1.71 10 1

Nights 4.14 1.81 10 0

Own Spending $620.38 688.06 3300 0

Junior Spending $787.17 1480.60 8780 0

Other Adult Spending $285.33 979.70 6640 0

Non-Local Sponsor Spending $139.93 922.44 7900 0

Total Reported Spending $1,832.82 2793.77 14595 140

The average total spending per night per person for Parent/Guardian respondents was $91.

Adult participants (n = 229)


Age 30.24 10.19 60 18

Gender (% Male) 0.81 0.39 1 0

Household income $84,094.74 94,786.89 710,000 0

Also Parent/Guardian of Junior(s) (%) 0.21 0.41 1 0

Juniors responsible for (if any) 2.17 2.89 14 1

# of other Adults financially responsible for 0.91 1.38 11 0

Visit Days 4.83 1.97 15 1

Visit Nights 4.16 1.82 10 0

Own Spending $444.00 475.99 3000 0

Junior Spending $168.67 521.53 4200 0

Other Adult Spending $75.87 312.20 2400 0

Non-Local Sponsor Spending $233.91 963.04 10000 0

Total Reported Spending $922.45 1152.43 10000 0


Lodging patterns/Hotel utilization Using the participant level data, we can also calculate the average per night spending on lodging expenses. Visitor Type Lodging Expense per night per person

Adult Participants (including travel party members) $33.91

Parent/Guardian (per travel party member) $45.51

A follow up inquiry was also made by USA Cycling using an online questionnaire as to the lodging choices during the participants’ visits. Several event-related hotels were listed, and respondents were also able to report their alternative lodging choices. The 56 respondents to this question were then categorized based on lodging type:

Using this information to infer participant lodging patterns overall, coupled with the average overall length of stay and traveling group size, we can estimated that the championships generated somewhere between 2769 and 5538 room nights in the Augusta, GA area from participant travel groups alone (lower bound corresponds to quad occupancy lodging while upper bound corresponds to double occupancy). We note here that a more accurate estimate of paid lodging nights would require reporting of ‘visitor per room’ lodging practices, which was not collected in either the initial or the follow-up surveys. Of all of the participants lodging in hotels in the Augusta area, approximately 94.9% of them made use of accommodation providers specifically recommended by USA Cycling within the pre-event information.

69.6%

12.5%

8.9% 7.1%

1.8%

Lodging Types (n = 57)

Hotel

Rental property/home

Free Host/Home

Not specified

Other


SPECTATOR/VISITOR EXPENDITURES The spectator survey was abbreviated compared to the participant survey to allow for efficient administration on site. Therefore, only total individual expenditures and length of stay were collected. The following table displays the respondents’ basic characteristics and their reported totals of local spending. Non-Local Spectators (n = 37)


Age 42.78 11.79 62 16

Gender (% Male) 0.54 0.51 1 0

Household income $100,700.00 57,825.50 200,000 45,000

Days 4.35 2.04 10 0

Nights 3.78 1.95 9 0

Total Local Spending $773.30 1286.26 8000 15

In this case we do not have the spectators’ travelling or ‘financial’ party size, but because the reported spending visit night was $204.51, we might presume that at least some of these spectator respondents had expenditures related to additional travelers.

RESIDENT IMPACTS While it is commonly accepted that new events can bring increased spending into a regional or local economy, it is nearly as commonly neglected that these new events could potentially have negative impacts as well. It is straightforward for a community to calculate the fiscal costs/investments in attracting and hosting events, such as public service provisions, subsidies, and/or inducements, but it is more difficult to capute other impacts such as displacement of economic activities. For example, it has been shown that mega-events such as a Super Bowl, Daytona 500, Olympic Games, etc. actually have the effects of local residents “running away” from the event area, and/or visitors “avoiding” the area because of increased congestion and overbooked facilities (crowding out effects). In the former case, the local residents that flee the area would be taking local expenditures away during their absence, and spending local monies in outside communities and activities. In the later case, new spending that would have otherwise entered the local economy is forgone and assumably made in some outside (non-local) area. There are several reasons we will give that the particular instance of the 2012 USA Cycling National Championships in Augusta may escape such problems, or that they can be assumed to be negligible. In terms of “run-aways”, the organization of the venues for the Augusta cycling championships immediately alleviates many of these concerns. In particular, the Time Trial and Road Race venues make use of Augusta adjacent rural (Strom Thurmond Dam), and/or restricted access (Fort Gordon) event sites.


If we consider the Time Trial location first, we can see that the area of the competition itself is not in fact within Augusta, GA’s county, Richmond, so any effects on the small number of local residents there would not impact our economic analysis of Augusta, GA. Even if any residents here were to “run away” from the event activity area, they might be likely to go into Augusta itself to only add positively to Richmond County’s economic activity. During the Road Race competitions, there were precisely zero private residences or businesses within the venues because the Championships organizers made extensive use of lands within the Fort Gordon military base, a restricted-access facility. At worst, some military training activity within the facility lands may have been displaced, but these would likely be temporal displacements (rescheduling), and even this effect could have the potential for off-duty military personell being more likely to spend their time and money in the local community. It is for these reasons that we assume the the local displacement concerns are negligible with regard to the Time Trial and Road Race venues. The criterium venue however, had the most potential to cause local disruptions. On the one hand the closure of a set of downtown thoroughfares could have a conjestive impact on the immediate area. On the other hand, the Augusta downtown area has been noted by local officials to be chronically under-utilized for weekend activity, and many initiatives to bring locals downtown to revitalize downtown commercial activity have been explored. There are very few businesses on or adjacent to the course that are even open or see significant economic activity on a non-event weekend. Additionally, nearly all of the properties on or immediately adjacent to the course are non-residential, so any impact on residential activity would be negligible. Finally, our estimates of the spectator composition (49.7% local), suggest at least some fulfillment of these policy initiatives that would balance out any displacements. The potential “crowding out” effects of large events can be analyzed by considering the available industrial capacity and impact of the event on local tourists. The largest relevant concern here would be the capacity of accommodations. While the USA Cycling Championships featured a reasonably large number of participants and related visitors, approximately 2000, this is a small number compared to the lodging capacity of Richmond County, whose stock of hotel accommodations is sufficient to annually host over 35,000 visitors for the Master’s Golf tournament alone. We also assume the local tourist impacts are negligible as the profile of the cycling championships would not be high in the mind of potential visitors nor would the events interfere with any local attractions. It is important to note that these conditions would not necessarily be consistent across potential event host communities. Augusta can almost be viewed as a “best case scenario” in terms of minimizing negative local impacts/displacements. Any prospective community should also consider these impacts relative to their own particular infrastructure conditions, hotel stock, concurrent events, and available competition venues.


SUMMARY EXPENDITURES/MULTIPLIER EFFECTS As probably the most important concern among policy makers interested in hosting or attracting events to their communities, the relevant effects on local economic activity must also be estimated. While the direct expenditures can be very consistent from locale to locale (taking into consideration cost of living differences), the subsequent indirect and induced impacts can vary based on a communities variety of industrialization and import-export balances. We first considered the total direct impacts generated from our data collection: Direct Impacts: Estimated Total Spending (gross $) by Non-Local Championship Visitor Category

Sector Parents, Guardians

Junior Alone

Adult Participants

Non-local Spectators

Event Organizers

Total

Lodging 84,576 7,458 197,243 135,003 10,908 435,189

Food 43,992 3,741 118,346 114,524 5,541 286,144

Entertainment 7,675 1,165 29,162 5,696 43,698

Shopping 13,543 828 27,597 10,165 8,823 60,955

Local Transportation 12,991 1,809 50,398 14,354 4,244 83,796

Other (misc. retail) 6,104 1,268 36,635 12,566 56,572

Public services 8,585 8,585

Event Services 14,810 14,810

Total 168,880 16,269 459,379 292,307 52,910 $974,939

An IMPLAN impacts model was then created to translate our measured estimates of direct spending into total impacts for the Augusta, GA economy. To begin with the model analysis only includes the marginal effects of direct spending on the local goods ($810,307 v. $974,939) to account for the fact the the initial influx of spending suffers some “leakages” to outside providers of initial goods sold, i.e. goods sold are often “imported” from outside suppliers. The retail spending categories suffer this effect most significantly, but the Lodging and Food and Beverage sectors (where most event spending occurs) have high “marginal gains” from trade and retain much of the gross transaction spending.

Overall Impacts:

Impact Types Employment (jobs) Labor Income Value Added Output

Direct Effect (marginal)

11.7 $219,064 $426,465 $810,307

Indirect Effect 2 $76,008 $135,634 $236,630

Induced Effect 1.2 $42,377 $79,307 $131,744

Total Effect 15 $337,449 $641,406 $1,178,681


Allong with considering these indirect and induced impacts, IMPLAN can also be used to analyze how the events presence differentially affects other local business sectors. Despite the fact that we gather all of our direct participant spending into 8 broad categories, these initial transactions “ripple” into the local economy and have economic output impacts of $500 or more in 85 (19.2%) of the area’s 440 industrial sectors. The top 10 affected sectors and output effects are show below.

Impacts by Industrial Sector (Top 10 affected): Sector Description Employment

(jobs) Labor

Income Value Added

Output

413 Food services and drinking places 5.7 $97,562 $158,713 $307,641

411 Hotels and motels 4.8 $94,273 $225,055 $435,538

329 Retail Stores - General merchandise 0.6 $14,506 $23,761 $30,922

330 Retail Stores - Miscellaneous 0.6 $10,067 $16,382 $25,502

404 Promoters of performing arts and sports and agents for public figures

0.3 $4,927 $6,595 $16,349

388 Services to buildings and dwellings 0.3 $6,388 $8,492 $16,653

326 Retail Stores - Gasoline stations 0.2 $4,882 $9,258 $13,470

360 Real estate establishments 0.2 $3,110 $24,179 $27,895

382 Employment services 0.2 $4,826 $5,226 $6,518

427 US Postal Service 0.1 $8,435 $8,251 $9,803

Finally, all of this output activity influences tax revenues for federal, state, and local governments. In the case of Richmond County, these indirect effects circulate back to the local government primarily through the local sales tax receipts and property taxes. The following table summarizes the state and local tax impacts of Augusta, GA hosting the events. It is important to note that the impact of any “State level” tax items may be overstated because some of the respondents included in our analysis may be GA residents even though they are not Richmond County residents.

Tax Impacts: Description Employee

Compensation Indirect

Business Tax Households

Indirect Bus Tax: Other Taxes

$1,931

Indirect Bus Tax: Property Tax

$48,849

Indirect Bus Tax: S/L NonTaxes

$884

Indirect Bus Tax: Sales Tax

$19,618

Personal Tax: Income Tax

$3,917

Personal Tax: NonTaxes (Fines- Fees

$1,076

Personal Tax: Property Taxes

$102

Social Ins Tax- Employer Contribution $115

Total State and Local Tax $164 $71,283 $5,095


ABOUT THE RESEARCHER

Daniel J. Larson, PhD At the initiation of this project Dr. Larson was an Assistant Professor (temporary) at Kennesaw State University. Dr. Larson’s research focuses on sport economics and specifically the economic issues within the sport of cycling. Dr. Larson functions as the coordinator for the project/report and has since begun a new faculty position at the University of Oklahoma.

APPENDIX Input-output analysis assumptions The input-output (IO) analysis on IMPLAN relies on several simplifying assumptions that should be considered when interpreting results. While these assumptions generally are not met in their entirety, IO (and IMPLAN) provides a good balance between practicality and accuracy. That is particularly true in cases, such as the present study, where the impact being evaluated is a small compared to the overall study area economy. In such cases, non-linearities can be reasonably approximated with the linear relationships inherent in IO. IO assumptions include the following: 1. All businesses within each sector produce a single, homogeneous product or service; the input procedures used in the production process are identical. 2. An increase of production will lead to purchase of inputs in the proportions shown in the technical coefficients matrix. In technical terms, the production function is linear and homogeneous. This assumption restricts economies of scale; IO analysis assumes a business always will use the same proportion of inputs regardless of how much it grows. 3. When households are included in the analysis (as is done for this analysis), their spending patterns (consumption functions) also are assumed to be linear and homogeneous. 4. The structure of the economy will not change. Many input-output models, including the one used here, are static in nature. They are based on data from a single year (in this case 2010) and yet are used to estimate significance in other years. Dramatic structural changes in the economy would invalidate this assumption. The project area, and the nation as a whole, has been in recession, but this is assumed to be a temporary phenomenon that does not involve a substantial structural change to the Richmond County economy. 5. When IO is used to estimate the effect of changes in final demand (as in the present case), there must be unemployed resources available to be brought into the sector as inputs.

2012 elite/u23/junior/paralympic road national ......usac economic impact report 6 reported their...

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