May 21, 2004
NCAA v. Super Bowl

We (or at least I) may not know what the financial impact of the Super Bowl really was, but here's a story about the financial impact of the NCAA Men's Final Four in San Antonio.

Before the NCAA Men's Final Four was held here in April, local officials optimistically predicted basketball fans would bring $50 million in direct economic impact to the Alamo City.

On Thursday, the same officials delivered some pleasantly surprising news: They underestimated by $5 million how much cash would flow into town.

The NCAA and the San Antonio Local Organizing Committee said the $55 million figure, calculated by the same independent research firm that made the prediction, doesn't include spending by local residents and "casual" attendees who were in town on other business.

The experts concluded that 51,000 visiting fans from Duke, Georgia Tech, Connecticut and Oklahoma State universities spent an average of $229 per day during the events April 3-5, or $1,019 for the typical four-day stay.

Based on detailed surveys during and after the Final Four, cash registers were ringing at stores, restaurants and hotels, where the fans spent an average of four nights, the researchers said. When they weren't watching basketball at the Alamodome, the visitors were dining, shopping, tanking up on gas, seeking entertainment and visiting tourist attractions downtown and elsewhere.

I find this fascinating. I can only wonder if the "independent research firm" that was involved here is the same one that made the (in my mind) wildly optimistic predictions about the Super Bowl and All-Star Game. Note that in San Antonio, a tourist town with generally higher hotel room prices than Houston, the per-day spending of each visitor was $229, and this was about 10% more than originally estimated. Compare that to the $373 dollars per day that Houston Super Bowl visitors were expected to plunk down. Does that give you any more faith about that original projection? It sure doesn't for me.

One question I'd like to ask about all of these surveys is what they expect the average occupancy of hotel rooms for these visitors to be. If I were to fly into San Antonio and rent a car instead of just driving there, I could imagine spending $229 per day on the hotel, the rent car, and my meals and entertainment. (Not that I would spend that much in reality - I'm way too much of a cheapskate - but I could at least imagine it.) If I were to bring Tiffany with me, though, I surely wouldn't expect our total expenditures to be double that. We'd still only need one room and one car, so the marginal expense would be pretty much all food and entertainment. So I'd like to know: How many rooms and cars are these folks actually renting?

Where I'm going with this is a sneaking suspicion that the cost of the game tickets is being factored in to those average spending numbers. Obviously, the visitors spent those dollars, but how much of that spending wound up back in the local coffers? How much of that money was taken off the top by the NCAA and NFL, and how much was left for the Alamodome and Reliant Stadium? How much of that really trickles down to the employees where one would expect the touted "multiplier effect" to kick in? I don't know, but I bet it makes a difference to the bottom line.

Oh, and one last thing: One other possible factor involved here is our highway-robbery hotel and rental car tax rates, put in place to help finance all those nice big-event-hosting stadia. I voted for all those referenda, and I'm glad we're getting these events, but I hope we're taking those tax rates into account before totting things up, since while that is money for the state, it's not really money in the hands of local businesses and workers.

Posted by Charles Kuffner on May 21, 2004 to Other sports | TrackBack

I would think the game tickets would have to be factored into the equation, otherwise, there would not be any reason for the visitors to be there. You mention the room and car rental taxes, however, don't forget that most sporting events are also taxed on both the state and local level. If there is a facility maintenance fee for the ticket, then that money should go to the building hosting the event.

Regardless, there's no way I would spend over $1000 in a weekend that did not involve naked women (Hey, one guy in NYC just spent $28,000 in one night at Scores). ;-)

Posted by: William Hughes on May 21, 2004 8:44 AM

Well, this is Houston, the gentlemen's club capital of the world. So never say never, William. :-)

Posted by: Charles Kuffner on May 21, 2004 8:47 AM