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What is economic impact?

What is economic impact?

Many people have probably heard the term “heads on beds” as a way of tracking occupancy tax numbers (room nights) but communities also track economic impact reports. When people visit an area, they aren’t just staying in a hotel; visitors go out to eat, shop, fill up their gas tanks, attend a show or visit an attraction. All of their spending is included in the term “economic impact.”

How is it calculated?

We use a formula created by our national organization, Sports ETA (Events & Tourism Association). The spending figure is based on whether or not they spent any nights and then we sift through the data to see the number of people that traveled from two hours or more away. For example, our New River Splash Triathlon back in May had 161 total registrants and 57 of those came from two or more hours away. 16 of those actually came from over five hours away. With the race starting at 7:30am, we can assume that 41 of those spent at least one night and that the 16 probably spent at least two nights. Another 17 came from between one hour and two hours from Jacksonville so they likely bought a meal before or after the event or spent some money here.

With all of those numbers, we take the Sports ETA spending figure for a city of our size ($166) and multiply it by the number of people and by the number of nights spent. Using this example, we also add a small figure for those additional 16. For New River Splash, that figure equaled $12,543. $12,543 was new money brought into our economy from that one event.

After each sporting event that we host and/or are aware of that happens in Onslow County, we calculate the economic impact, along with the room nights, and track those totals from year-to-year. It helps us measure the role sporting events play in our county.

Why does it matter?

We use these calculations when deciding to get involved with an event, create a new event, or bid on an event (since our mission is to bring new dollars to our community). It helps answer questions such as: Should we commit dollars to an event based on the past and potential economic impact figures? Why this event? Why commit these dollars? Basically, it gives us a barometer to use when making decisions.

Hopefully this helps clarify a term you may have heard but not fully understood what it meant or how it is used.

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