Festival Power: Under tourism umbrella, special events create positive economic impact for Tompkins County

By Rob Montana
Tompkins Weekly

Photo by Dave Burbank
The upcoming GrassRoots Festival of Music & Dance brings a large influx of people into Tompkins County each year, with approximately 15,000 people attending the four-day event annually.

It’s no secret Tompkins County likes its festivals – there are more than 50 of the special events that take place here throughout the year. While they offer fun and entertainment, and exposure to music, art and culture, local festivals also provide the county more than just a way to celebrate.
“Some communities have sort of made their living on festivals,” said Gary Ferguson, executive director of the Downtown Ithaca Alliance and manager of the Tompkins County tourism festivals program. “Think of places like Telluride, Austin with South by Southwest – it’s part of their economic plan.
“We’re not at their stage, but we probably have more festivals than any place around,” he added. “Part of the usefulness of festivals is to help bring people into the community and make the community an interesting place for people to come.”

Ferguson noted that tourism is what allows local residents to enjoy the myriad food and drink options, specialty shops and vibrant region in which they live.
“We have something like 60 food and beverage places downtown – that’s a lot of places,” he said. “If you look at the population and the people who typically support that type of environment, we can’t support that many places. People have to come in from some distances for many of the places to stay in business.
“If you want to have the type of lifestyle people here want, the coffee shops, book stores, cafes with tables, they have to be supported,” Ferguson added. “That’s why tourism is so important – we get to enjoy it all the time, thanks in part to people coming in from outside the county, because we’re not there every day supporting these places.”

Peggy Coleman, vice president of tourism and community relations for the Tompkins County Chamber of Commerce & Visitor’s Bureau, said that each event and festival has a different impact in the county.
“For example, we can to track the economic impact of the Winter Recess Festival, an event that is promoted to bring teachers to the county in February, because participants register to participate in the festival,” she said. “Ticketed festivals and events can also track attendance. For non-ticketed events, there really isn’t a reliable formula to get a 100 percent accurate count.
“Grassroots Festival is a big draw for out of county visitors. We anticipate that the new Cayuga Sound Festival in September will have a huge draw from out of county,” Coleman added. “We also know that our vibrant arts community draws visitors from out of county, especially for performances at the Hangar Theater, Kitchen Theater, and the State Theater. Many people would not consider these performances as festivals, but these events introduce a new visitor to the rest of what the county has to offer visitors.”

Coleman also noted that events at the county’s institutions of higher education bring in a crowd.
“College and university related events, such as graduation or alumni/reunion weekends, bring large numbers of people from outside the county, including prospective student visits,” she said. “I think we often overlook the economic impact of the higher education visitors.”

Strategic Tourism

Photo Provided
The Ithaca Festival parade kicks off a multi-day event that brings people to downtown Ithaca each year.

Senior Planner Tom Knipe is director of the Tompkins County tourism program, which includes the Strategic Tourism Planning Board.
“It advises the county Legislature on tourism development policy, strategy, program evaluation and use of more than $2.5 million in annual county hotel room occupancy tax dollars which are distributed through the Tompkins County Tourism Program,” Knipe said of the tourism planning board. “A significant portion of this funding is allocated through competitive grant programs that the STPB helps oversee, including grants for arts and culture organizational development, capital improvements at attractions and venues, tourism projects, new tourism initiatives, tourism marketing, and community celebrations.”

He added that the board offers oversight and strategic direction for other programs that receive room tax funding, as well as other marketing, tourism product development and hospitality workforce development initiatives.
“A core aim of the program is to promote economic development through tourism while also and enhancing the quality of life in Tompkins County,” Knipe said.
Tompkins County distributes dozens of grants each year for groups to run events; the grants are funded by county hotel room occupancy tax revenues.
“Back in the early 2000s, the rate on a stay in a hotel room increased from 3 percent to 5 percent, and the county and STPB decided to allocate the additional revenues to ‘tourism product development,’” Knipe said. “Our competitive tourism grant programs were established around then as well. The thinking was that in addition to investing in marketing to let people know about all the reasons that they should visit here, the Tourism Program should also invest in the things that attract and serve our visitors, including, but not exclusively, events.
“We closely track our return on investment for grant funds spent on events, and we commonly see at least a 17 or 18 to one ratio of visitor dollars generated by an event to grant dollars spent,” he added. “We think that’s a pretty good investment.”

Coleman said that smart event producers create unique offerings, giving visitors a chance to experience something they’re not going to get anywhere else.
“They create a database of past festival goers and develop a relationship with them through regular communication,” she said. “They create a community which then serves as an unpaid sales staff. They also keep things fresh each year to create a reason for someone to return.”

Ferguson said the greatest benefit will be seen by communities that host events in areas that offer easy access to businesses.
“Location is really important. One of the things we talk to people about is if they want to have a spin-off effect, they need to pick venues where you can get that kind of economic spin-off,” he said. “An event at Stewart Park is going to affect businesses differently than an event on the Commons. If it’s a multi-day event, or if it’s an evening event, like the fireworks, then they effect will be different.
“GrassRoots is a great example. It’s at the fairgrounds in Trumansburg, but it’s within walking distance of the village’s Main Street,” Ferguson added. “If that were 5 miles out of town in a cornfield, it might be very different.”

The summer concert series that takes place in downtown Ithaca during the summer draws crowds to the Commons, but not all businesses will see a boost from that.
“We’ve had people say the summer concerts don’t really help them because they start at 6 and end at 8,” Ferguson said. “I might not go to a concert and, for example, go buy a suit. But I might go get a beer, I might browse at a book store.
“Just because there is an event doesn’t mean all businesses will benefit,” he added. “Certain businesses will benefit more than others.”

 

What’s the Impact?
Ferguson said there is no easy formula to determine the economic boost, per person, of an event taking place. He said estimates can be made based on a few assumptions.
“For example, around 20 percent of people coming to the Apple Harvest Festival are visitors. With around 20,000 people coming for that, that’s about 7,000 people from outside the county,” Ferguson said. “Then you can make some sort of assumptions about overnight and day visitors. The number for day visitors is around $100 (spent per person); if that’s the case, 7,000 times $100, that would be $700,000 for the economy. If they’re staying overnight, the assumption is about $200 (spent per person).

“That gives you a sense of how substantial it can be,” he added. “Does one business see that? No, it’s spread over all businesses, but gas stations, food and beverage, hotels, and some retailers will see significant spending.”

Many local businesses benefit from the influx of people to the county for events, Coleman said, ranging from the “obvious” ones such as “restaurants, parks, retail shops, spas, hotels, inns and AirBnB hosts,” and “less obvious” places such as “gas stations, grocery stores, convenience stores and outdoor supply companies like bike rentals and water sport businesses.”

There is not necessarily a formula to determine which festivals bring in the most revenue per person, Coleman said, adding that there are “some basic elements which increase the economic impact of events and festivals.”
“The first is that overnight visitors spend more than day trippers. Also, we have more opportunity for growth during the winter and slower times of year than we do during July and August, so time of year and seasonality also has an impact,” she said. “A multi-day event in February will create more impact than another event added to the already busy summer season.”

The economic impact of tourism – while not broken down to differentiate between festivals and other initiatives – is clear for Tompkins County. Knipe said it is estimated that about 900,000 people visit the county annually; in 2015, Coleman said, tourism generated approximately $195.4 million in revenue.
“Tourism also supports about 3,500 jobs in Tompkins County and generates $14.5 million in local tax revenues, which gives all of us who live here a $659 per household tax savings, all paid by visitors from outside the community,” Knipe said. “ Festivals and events are an important piece of that overall impact.”
“The sales tax produced by visitor spending in Tompkins County helps to pay for essential quality of life services like law enforcement, road repairs, and social services for our neighbors in need,” Coleman added.

Knipe promoted the benefit of tourism overall, as opposed to pointing to special events.
“We also try to keep in mind that mostly our attraction as a destination is the whole experience of visiting Ithaca and Tompkins County,” he said. “We hope that an event will be part of the reason that someone chooses to come here, but if we are doing things right, it is really the event – plus our great local theater and arts, local music, our museums and Discovery Trail sites, hiking and biking on local trails, the state parks and waterfalls, the restaurants, the local craft beverages and local food, the Commons and downtown Ithaca, the villages, and the overall beauty of the Finger Lakes region and a friendly, laid-back, smart vibe.”