the sport tourism economic assessment model · history of steam •research on developing a model...
TRANSCRIPT
The Sport Tourism Economic
Assessment Model
Tony FisherDirector of Research
Canadian Sport Tourism Alliance
Before we begin…
Questions are encouraged!
• The STEAM model – what it is and how it
works
• How to use STEAM
• Interpreting and understanding the results
• STEAM / STEAM PRO and on-site analysis
Motivation
• One of the objectives of the CSTA is to raise the profile of the economic benefits associated with hosting sport events
• When we began, we quickly realized that there were many sources of error associated with measuring economic impact:
– Number of visitors
– Spending of visitors
– Multipliers used
History of STEAM
• Research on developing a model began in
2001
• Engaged a number of partners including
– Sport Canada
– Canadian Association of Convention and Visitors
Bureaus
– Canadian Tourism Commission
– Skate Canada
STEAM – the Solution
• STEAM addresses these issues in two ways:
– The model uses a consistent set of visitor profiles
• Specific to sport
• Calibrated based on more than 10,000 on-site surveys
collected at 50+ events across Canada
• Expenditure profile varies based on location of event, age of
participants, distance traveled, etc.
– STEAM has a nationally consistent set of multipliers
• Developed for CSTA by Conference Board of Canada
• Regularly updated based on changes in Tax / I-O structures
(i.e. HST, introduction of NAICS)
Unique Features
– Web based tool
– Scalable to communities of ALL sizes
– Specifically developed to estimate economic
impact of sport events
• Future Events
• Past Events
– STEAM can be used for a variety of sports events,
from small (30 participants) to large (20,000
spectators)
STEAM - Features
Using STEAM – Required Information
• To use STEAM, start with the minimum information about your event:
• Proceed to www.canadiansporttourism.com
• Sign in to the
members section
using your member
username and
password
Signing In
• Select Access STEAM
under the Members
Home tab on left
• Choose the appropriate
province
• Note the User’s Guide is
available to download
from this page as well
Signing In
Challenges With Signing In
• If you have problems signing in (i.e. you don’t
see anything), 99% of the time it is because of
a pop-up blocker
• Pop-up blockers need to be disabled from:
– Web browser (Under Tools menu in IE)
– Many ‘Toolbars’ such as Google, Yahoo, etc., also
have pop-up blockers; we recommend you disable
these
– Note that STEAM works best using IE
What is an out-of-town visitor?
• Don’t want to include spending of local residents as their money is a transfer, they would likely be spending money within host city
• Old definition:
– 80km one-way, or overnight away from home, except 40km in Ontario
• New definition: – Outside of your usual spending environment
• Important to establish a definition and stick with it!
STEAM – Visitor Attendance
• In using STEAM, all figures should refer to out-of-town visitors
• Information regarding expected attendance can be derived from a number of sources:
– Historical attendance at annual events
– Attendance of similar events in host community
– Marketing plan (e.g. are you marketing locally or nationally)
– Capacity of venue (and accommodation capacity of host region)
Visitor InputOntario STEAM - Participant Input
Number of unique out of town participants 0
Percentage of out of town participants staying overnight (0-100) 100
Overnight participants (0-100)
Participants from Canada (%) 10
Participants from U.S. (%) 10
Participants from Overseas (%) 80
Canadian overnight visitor origin(0-100)
Out of town up to 320km, regardless of province of origin (%) 10
More than 320km and the same province as the event (%) 10
More than 320km and a different province as the event (%) 80
Average overnight length of stay (nights) 7.0
Age of participants (0-100)
Participants under 19 (%) 80
Participants 19-44 (%) 10
Participants 45 and over (%) 10
Participants under 19 who are staying in commercial accommodation (%) 100
Same Day participant
Average number of day trips taken by each participant 3.0
• Data entry is
similar to that of
Participants with
the addition of a
question about
the importance
of the event in
the travel
decision
– In most cases,
this will be
100%
STEAM – Spectator Input
• When people
travel and are not
responsible for
final bill, they
tend to spend
more
• Last visitor
category includes
those who are
usually
sponsored,
members of
media and VIPs
STEAM – Media/VIP Input
STEAM – Capital Expenditures
• Need to ensure that all capital expenditures are directly associated with the event
• Changes to physical structures (permanent)
– Clubhouse renovation $150,000
– Driveway repaving $100,000
• Paving was originally scheduled for September 2014, but was accelerated to take place before the event, therefore we do not include the driveway expenditure, as it would have occurred anyways
STEAM – Capital Input
British Columbia STEAM - Capital Input
Enter Capital Spending on:
Buildings and Renovations $0
Machinery and Equipment $0
Furniture and Fixtures $0
Transportation Equipment $0
Other Supplies $0
Other Services $0
Total (calculated) $0
Enter the % of construction costs that are attributed to local
firms100
STEAM –
Operational
Input
A full description
of the categories
can be found in
the user’s guide
IMPORTANT
You must enter
revenues that
are equal or
greater than your
expenses
STEAM – Operational Expenditures
• Need to classify budgetary expenses into
STEAM categories
• Examples:
– Operations $20,000
• Actually comprised of the following components:
– Rent $ 10,000
– Insurance $ 500
– Security $ 5,000
– Renovations $ 4,500
STEAM – Operational Expenditures
• Administration $40,000
– Components
• Salaries $ 10,000
• Rent $ 10,000 – (Donated)
• Office Supplies $ 2,000
• Advertising $ 10,000
• Communications $ 8,000
STEAM – Operational Expenditures
• Need to classify budgetary expenses into STEAM categories
• Major categories are:– Salaries, Fees, etc.: paid positions of host society,
tournament managers, etc
– Rent: venues, tents, fencing, TV’s, other AV, etc.
– Communications: cell phone, internet, etc.
– Merchandise: goods you are selling, volunteer uniforms, etc.
– Transportation and Storage: bus rentals, etc
Operations – Misc. Goods & Services
• If some expenses don’t easily fit into the
STEAM categories, use the catch all categories
of other goods & other services
– Goods: trophies, decorations, etc.
– Services: garbage disposal, security, etc.
STEAM – Operational Expenditures
• In order to accurately capture the true
economic benefits of the event for the host
city, some adjustments to operational budgets
are also necessary
– Exclude all value in kind donations*
– Exclude all transfers (i.e. TV rights and fees for
other organizations)
– Exclude all inter-city transportation
Operations Food & Bev and Accommodation
• STEAM has 3 categories for Food & Bev and Accommodation
– Organizing committee: expenditures made and consumed by event organizers (e.g. food for volunteers)
– Participants: expenditures made on the behalf of participants
– Media / VIP: expenditures made on the behalf of media / VIP members
• If you use the participants and media / VIP categories, you need to let STEAM know what proportion of these groups are being sponsored (enter as % between 0-100)
Case Study - Assumptions
• 2013 Jim Wilson Winter Classic
• Remember, in using STEAM, all figures should refer to out-of-town visitors
• In this case, we are using team registration information
• Estimate that there are an average of 15 skaters and 2 goalies per team (17 total)
• A total of 85 teams, 68 teams from out-of-town, 62 ‘regional’, 4 long-distance
• Doing the math = 1,156 out of town participants
• Assumed 1.2 family members for every player, thus an additional 1,387 spectators
Visitor Input
• Once you have determined number of visitors, figure
out proportion who are staying overnight (90%)
• Overnight length of stay (in nights) = 2.3 (most stay 2
nights, some teams will travel on Thursday to play
Friday morning
• Number of day trips – most play on Friday and
Saturday, about 1/3 of teams make the playoff
rounds on Sunday, however some near regional
teams played on Thursday, so estimate 2.5 trips per
same day visitor
Operations InputEnter Operating Expenditures on:Salaries, Fees and Commissions $14,790
Advertising Services $0
Professional Services $0
Financial Services $0
Rent $20,000
Laundry and Cleaning Services $0
Other Services $0
Communication $100
Energy and Other Utilities $0
Office Supplies $125
Other Supplies $0
Repairs $0
Food and Beverages – Prepared $350
Accommodation $500
Merchandise and Retail $0
Personal Travel $1,480
Transportation and Storage $300
Total Expenditure $37,645 Total Event Revenue $52,650
Operating Surplus $15,005
Presenting your results
•The combined expenditures of visitors, event operations, and capital expenditures as a result of hosting the Jim Wilson Winter Classic were estimated to reach (1a) $513,000 in the Province of Ontario.
•The event is estimated to have generated (2a) $553,000 in GDP in Ontario (net economic activity), of which (2b) $364,000 occurred in Orillia
•A total of (3b) $253,000 in wages and salaries were paid in Orillia, with an additional (3c) $98,000 paid throughout the rest of the Ontario; supporting an estimated (4b) 8.4 jobs in the city, and an additional (4c) 1.5 jobs in other areas of the province.
Presenting your results
• In summary, the spending supported an estimated (6a) $1.2
million in economic activity, of which (6b) $770,000 occurred
in Orillia.
• The event supported (5.4a) $263,000 in taxes; of which (5.1a)
$114,000 accrued to the federal government. Additionally,
(5.2a) $97,000 in tax revenue was supported in the province
with (5.3a) $52,000 in municipal taxes supported, of which
(5.3b) $44,000 accrued in Orillia.
Economics 101
• The economic impact of an event can be measured at three levels as the money flows through the economy
– Direct
– Indirect
– Induced
• The bottom line… most results report all 3 of these
• Some Stats Can I/O models do not have induced EI
Economics 101
• Among the detailed outputs, the model reports two types of economic measures:
– Total Output
• The total amount of economic activity in generated as a result of the initial expenditure (could involve double-counting)
– Gross Domestic Product (GDP)
• The amount of net economic activity as a result of the initial expenditure
An Example
Tanner sells
basketball pieces
to manufacturer
for $10
Value of Output = $10
Cost of Inputs = $0
Net Value Added = $10
• The example on
the right
illustrates the
difference
between the
two measures
Manufacturer sells
ball to Nike for $25
Value of Output = $25
Cost of Inputs = $10
Net Value Added = $15
Nike adds Swoosh
and sells ball for $45
Value of Output = $45
Cost of Inputs = $25
Net Value Added = $20
Total Economic
Activity
= $45 + $25 + $10
= $80
Total Value Added
= $10 + $15 + $20
= $45
Warning
• While Total economic activity is the number
you will want to report, you need to be
careful in presenting it. Someone will do math
like:
– $1,154k / 72 out of town teams = $16,000 per
team…
• Models such as STEAM use input-output tables as the
basis for evaluation with the results including tax
revenues from three sources:
– New tax revenues created by the event
– Direct & Indirect taxes supported by event
– Induced taxes from the re-spending of wages &
salaries
Taxes in STEAM
• The STEAM results report new revenues that arise
from:
– User fees in support of the event (e.g. liquor license,
building permits, etc)
– Destination marketing fees (i.e. hotel room tax) arising from
the total room nights sold
– The profit sensitive component of property taxes and other
profit sensitive taxes
Tax Revenues - New
• For example, a hotel has revenue of $5 M per year
• Our event generates $50 K in revenue for the hotel (1% of annual total)
• The hotel employs 100 people and pays $200K in taxes annually
• The event has supported 1 job and $2K in taxes
Tax Revenues – Direct & Indirect
Tax Revenues – Direct & Indirect
• Sources:
– Hotels
– Restaurants
– Other front line businesses
• Note, this method is not just for municipal property
taxes, but Provincial & Federal as well (i.e. GST / HST,
Payroll taxes, Income Tax, etc.)
• The induced effect measures the re-spending of
wages and salaries earned in the local economy
• Surveys conducted by Statistics Canada reveal the
average percentage of a workers wages and salaries
that are spent on taxes (including property tax, GST/
HST, etc.)
Tax Revenues - Induced
• While some argue that ‘supported’ revenues are not
new revenue and are consequently irrelevant,
sports events are very important to many business
in host communities. Examples are clearly evident
– Restaurants contacting recreation centers to inquire
about upcoming events in order to manage staffing
Tax Revenues – Indirect & Induced
Support of Taxes & Jobs
• Saanich Commonwealth Pool was built for 1994 Commonwealth Games
• Hotel was built in 2001
Support of Taxes & Jobs
• Other hotels have developed their existing facilities to support sport tourists
Troubleshooting
1) Turn off your pop-up blocker!– Installed Yahoo/Google toolbar
– Recent upgrade on your system
2) On Operations Input screen, ensure
revenues are greater than expenses
– You will get incorrect results if revenues are less
than the total expenses
Troubleshooting
•Do – erase cell
completely while
entering data
• Don’t – insert cursor
to the right of the ‘$’
sign unless erasing
completely
(i.e. don’t insert cursor
here:
$|0
Fully Erase Cells
Troubleshooting – other
1. Ensure that you are using the correct STEAM Scenario (Workbook) as well as the correct STEAM model
2. Refer to the STEAM user’s guide
3. Contact the CSTA ([email protected])
Things you need to be cognizant of
• If you are receiving STEAM inputs for funding
consideration:
– Ensure only visitors are used
– Unique individuals vs. total attendance
– Inflation of total attendance figures
– Seeing output sheets only – crucial to see how the
results were produced and if they are reasonable
assumptions
Other EI Models
• Economic Impact models are generally not comparable
– STEAM / STEAM PRO / TEAM are consistent
– STEAM (direct and indirect) is quite close to Stat Can I/O Model
• Other models available
– TREIM (Ontario only) – developed in 2006? And hasn’t been updated
– Statistics Canada I/O
STEAM vs. STEAM-PRO
• Pre event EI projections
• Limited information
• Post event analysis
• On-site electronic
survey
• Full EI assessment of
event
What STEAM PRO Includes
• Customized electronic survey instrument
• PDAs
• Customized survey plan consistent with ‘Guidelines’
• Training for surveyors
• Full analysis of data
• Accurate visitor estimates
• EI projection and report
Unconventional things you can do with
STEAM & STEAM PRO
• Baseline analysis – what is the event /
program worth before we invest in it
• Annual program / venue analysis – what is the
program worth for the year as a whole
• Basic market research – what do people like /
not like, who is coming, etc.
• Note that surveys / MR is integrated across
mobile, email and web
The Sport Tourism Economic
Assessment Model
Tony FisherDirector of Research
Canadian Sport Tourism Alliance