Impact of BayFest 2013 Prepared by: Christopher M. Keshock, PhD April 2014

All rights reserved. Reproduction of this work in any form or by any electronic, mechanical or other means, including photocopying or storage in any information retrieval system is expressly forbidden without the written permission of Dr. Christopher M. Keshock and the Mobile BayFest Music Festival. Requests for permission to make copies of any part of this work should be mailed to: Dr. Christopher M. Keshock, PE Building-HPELS Department, University of South Alabama, Mobile, AL 36688 or by Email at ckeshock@southalabama.edu

Executive Summary

The BayFest Music Festival has been hosted in Mobile, Alabama for 19 years. The relative

value or economic, social, and destination marketing impacts from BayFest 2013 on the City

of Mobile, Mobile County and the State of Alabama regions were ascertained for this report.

Impact estimate values were derived from random sample on-site survey data gathered from

spectator and business traveler responses, from an evaluation of BayFest cash flow

statements, and related data sources. Specifically, yield from public subsidizations allocated

to BayFest 2013 are presented along with comparative analyses of other events for policy

development purposes. Despite inclement weather for BayFest 2013 considerable reciprocal

value to the impact region economies were found from hosting BayFest in Mobile.

• Based on survey data collected from BayFest spectators (n=1,047) 70% of respondents had a

home residence outside the City of Mobile; 57% were from outside Mobile County; and 34%

traveled to attend BayFest from another State.

• An audience audit of survey data frequency responses returned a spectator demographic fan

profile as a 37 year old married or single parent college experienced female living in a

household of over 3 people and nearly 2 children earning between $30,000-$50,000 who

enjoys listening mostly to country and rock music. In general terms single younger females,

higher wage earners, and African Americans attended BayFest 2013 in comparison to the

spectators at BayFest 2012.

• Response data from business traveler surveys revealed 82% traveled to work BayFest from an

origin outside the City of Mobile; 81% were from outside Mobile County; and 78% were from

Out-of-state.

• BayFest attendee average group size was 3 persons and they stayed roughly 3 days and 2

nights in Mobile specifically to attend BayFest.

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• Based upon the on-site event survey response data collected at BayFest 2013 with weighted

average adjustments to lodging, intent of trip, and ticket sales purchase receipts the average

spending per person for true economic tourists living outside the City of Mobile was

$173.93, BayFest attendees with a home origin outside Mobile County spent $179.06 per

person, and those with a residence outside the State spent $169.58 while in town.

• The average group size for business travelers was 12 members staying an average of 4 days

and 3 nights in town and who spent an average of $243.97 per person while in Mobile during

the week of BayFest.

• Concert attendees, musicians, and festival workers who live outside Mobile and traveled

specifically to the area because of BayFest drew roughly 156,800 true economic tourists to

the City, 129,800 were drawn to Mobile from outside the County, and 80,300 travelled from

outside the State to take part in BayFest activities after factoring out locals, time switchers,

and casual visitors.

• The direct spending accrued by those specifically traveling to the impact region (attendees and

business travelers) for BayFest 2013 brought an estimated $10,105,476 to $11,605,762 to the

City; $8,162,342 to $9,346,094 to Mobile County: and $5,079,990 to $5,744,389 to the State

of Alabama.

• The subsequent rounds of re-spending from initial visitor purchases (multiplier effect) created

an economic impact of $17,737,132 to $20,370,434 to Mobile for hosting the BayFest Music

Festival and ancillary Road Race event.

• The subsequent rounds of re-spending from initial visitor purchases (multiplier effect) created

an economic impact of $14,326,543 to $16,404,264 to Mobile County and between

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$8,916,399 to $10,082,552 to the State of Alabama for hosting the BayFest Music Festival

and Road Race.

• The operational output or incremental expenditures effect from BayFest organizational

purchases of local Mobile goods and services was an estimated $766,474 resulting in an

economic impact of $1,345,315 to the City.

• The incremental fiscal impact from BayFest related visitor purchases was an estimated

$985,527 to $1,132,681 in City tax revenue; $281,406 to $323,228 in Mobile County tax

revenue; and $742,444 to $847,776 in State of Alabama tax revenue.

• The fiscal impact or reciprocal value of public dollars ($243,000 city grant) granted to

BayFest 2013 garnered an estimated 306% to 366% return on investment (ROI) to Mobile via

tourism related sales tax and a 41% to 62% ROI from County sales tax generated.

• Based on tourism spending attributed to BayFest the equivalence of roughly 124 jobs were

created from BayFest activities.

• The total monetary impact from hosting BayFest in Mobile generated from economic tourists,

tax revenue, organization output, home vacationers, and sponsorships is a conservative

amount near $23,174,767 for the local economy; whereas the optimistic impact is near

$26,381,125.

• The total economic impact of BayFest 2013 to Mobile County is $20,927,803 to $24,189,051

and to the State of Alabama is $11,771,571 to $13,095,727.

• Estimates of the media and tourism marketing impact generated from BayFest are estimated at

$1.7M which promotes destination awareness and the potential for $510,000 in future tourist

spending bounce-back from BayFest publicity.

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• Overall the total benefit after adjusting for costs for BayFest 2013 was estimated to have

decreased by 6.7% in comparison to BayFest 2012, but remains a powerful tool to attract

tourists during the offseason to Mobile and serves as a signature event in the Southeast region

of the United States.

• If this report were to adopt a 2.50 multiplier often found in other Mobile economic impact

estimates BayFest 2013 would have created roughly $37,987,388 to the local Mobile

economy; $34,570,903 to Mobile County; and $18,960,915 to the State of Alabama.

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Table of Contents

Executive Summary……………………………………………………………………………….2 Purpose of Report…………………………………………………………………………………7 Contributing Considerations………………………………………………………………………9 Introduction………………………………………………………………………………………13 Music Festivals and Special Events……………………………………………………...............14 BayFest Music Festival…………………………………………………………………………..16 BayFest Ticketing and Estimated Attendance…………………………………………………....20 Framework for Measuring Economic Impact…………………………………………………….23

Methodology……………………………………………………………………………...29 Resources…………………………………………………………………………………29 Instruments………………………………………………………………………………..31

Collection of Data………………………………………………………………………………...36 Findings…………………………………………………………………………………………...39 Festival Attendees………………………………………………………………………………...41 Business Travelers………………………………………………………………………………..49 Group Size………………………………………………………………………………………..55 Length of Stay……………………………………………………………………………………56 Direct Expenditures………………………………………………………………………………59 Economic Impact Visitor Spending………………………………………………………………71 Economic Impact Organizational Output Spending……………………………………………...72 BayFest Road Race……………………………………………………………………………….76 Fiscal Impact……………………………………………………………………………………...77 Mobile Resident Impact………………………………………………………………………..…80 Sponsorship Impact…………………………………………………………………………….…83 Total Economic Impact…………………………………………………………………………...83 Employment Impact………………………………………………………………………………87 Tourism Destination Impact………………………………………………………………………88 Media and Marketing Impacts…………………………………………………………………….90 Social and Cultural Impacts……………………………………………………………………….91 Cost Benefit Analysis…………………………………………………………………………......91 Festival Comparative Analysis ………………………………………………………………..….93 Community Event Comparisons

City, County, State Multiplier Adjustment………………………………………………..94 Conclusion…………………………………………………………………………………………98 References………………………………………………………………………………………...100

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Purpose of Report

Efforts to analyze the outcomes a district and associated stakeholders receive from hosting an

event in an area become crucial to determine societal and monetary yield. Namely, local events may

result in an increase in visitation to an area, provide opportunities to nearby residents for socialization

and cultural stimulation, generate business for companies providing goods and services to run the

event, and to promote the identity or urban image of an event location (Bowen & Daniels, 2005).

Since each community event stakeholder wants, expects, and receives potentially different

experiences and attaches potentially different outcomes to events, erudition to determine who and

how events affect a host area becomes significant (Getz, 2012). Repeatedly, erroneous event worth

projections have been propagandized in the media with little consideration given toward scientific

applications or primarily how values were decided and the type of benefits that accrue to event host

locations. Therefore, to move beyond speculative findings the main intent of this report was to

provide an analysis of BayFest 2013 utilizing primary data. Namely, on-site survey responses were

collected at BayFest 2013 to assess the amount of change in the Mobile economy resulting from

BayFest true economic tourists. In addition, other frequency response patterns from the data collected

were analyzed and compared to justify the “public good” returned from hosting BayFest on the Gulf

Coast.

Besides the economic opportunity city planners often want to improve the general quality of

life for individuals living in a town by offering different social or cultural activities through the

events they host. Or, a city may want to firmly establish itself as a travel destination since festivals

and special events are highly regarded as a cornerstone to develop businesses in a region from the

considerable tourism dollars they attract and operational spending that occurs locally by the

organizations coordinating events. Temporally speaking then area events are planned to produce

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immediate reciprocal value to the citizens, businesses, and regions where they are hosted with the

hope of developing into a sustainable public value over time.

In order for area events to remain viable in the fullness of time it is crucial that their

performance is evaluated to ensure they correspond with intended outcomes. Evaluating these

potential impacts of community events presents a number of unique challenges which is markedly

compelling when area tax-payer revenue is used to pay for events in a host location. Subsequently,

when public funds are allocated to cover the operational costs incurred from running local events

transparency toward the various costs and benefits are necessitated (Arcodia & Whitford, 2006).

Public interest to evaluate special events and the return on investment of municipal dollars become

even more meaningful when decisions have to be made to determine which events to host and

subsidize relative to the planning goals in a region. Likewise, the business structure of the

organization hosting an event whether for profit or non-profit should also be of great concern since

commercial based entities would keep much of the proceeds generated by the event and non-profits

would reinvest dividends back into the organization to improve the quality of its events.

Quite often though efforts to measure the reciprocal value of community supported events are

incongruous and incomplete due to the many ways value is derived. Festivals, fairs, and celebratory

events each create their own benefits at varying costs, creating not only the need for a comprehensive

evaluation of all occurrences hosted in a destination, but also to assess events independent of one

another or from an event outcome based approach. Similarities and differences between events,

groups, or patterns that evolve may prove beneficial to community developers and be accomplished

through a mixed-method approach. Case study (independent event), comparative (numerous events),

and concatenation (linked series of event research projects) appraisals of community events become

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even more essential when events reoccur every year in a local area. According to McCartney (2005)

notable features of recurring events should be examined for their value:

• To determine the possibility of event evolution and ability to adapt over a period of time to

create participant and spectator loyalty.

• To examine whether a general pattern of seasonality exists to instill the occurrence of an event

taking place at the same time each year and the potential for repeat customers.

• Potential for the host community to feel ownership of the event to boost civic pride.

• Possibility for further flow-on benefits from event visitors undertaking other tourist activities

while in town.

• And, level of sustenance either by virtue of event success and/or by public or private

initiatives.

Therefore, in review of the above mentioned critical issues, research approaches, outcome

based event planning attributes, and ongoing pursuit by communities to measure event worth the

purpose of this report was to determine the impacts that emanate from the annually occurring BayFest

Musical Festival on the City of Mobile, Mobile County, and Alabama. In addition, BayFest is

compared to other events held on the Gulf Coast and a number of sport-related or leisure activities

hosted in Mobile and the surrounding area.

Contributing Considerations

Since no one measure of value can sum up the worth of BayFest, several tangible and

intangible costs and benefits from multiple stakeholder perspectives (strategic constituencies

approach) were used to shape the content of this study:

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• First, an economic benefit assessment was done on the amount of visitors who

travelled to Mobile to attend BayFest weekend and those who participated in BayFest

ancillary programs. In particular where these individuals were from, how long they

stayed in the area, and how much they spent on tourism related commodities while in

town. This data was derived from responses to questions gathered from on-site surveys

administered to spectators and workers during the 2013 BayFest Music Festival

weekend.

• Secondary data was also needed to complete the economic, social, and marketing

impact of BayFest 2013. BayFest administrators provided their 2013 balance sheet

listing the amount and areas of operational spending. Also, the amount of exogenous

funds funneling to Mobile by non-local organizations affiliated with BayFest activities

were also forwarded and assessed. BayFest cash flow reflections were necessary to

determine the amount of increased trade or local industrial productivity which was

then used to derive the monetary residual effect of BayFest on the City of Mobile,

Mobile County, and State of Alabama.

• BayFest impacts over a number of years through several time-series analyses or from a

longitudinal viewpoint were tabulated. The comparisons of an earlier meta-analysis

report on BayFest 2009 (Keshock, 2010) and 3 earlier BayFest case study reports; The

Impact of the 2010 BayFest Music Festival on Mobile, Alabama (Keshock, 2011), The

Impact of the 2011 BayFest Music Festival (Keshock, 2012), and the Impact and

Comparative Analysis of the 2012 BayFest Music Festival (Keshock, 2013) all

empirical in nature were also explored to adduce specific trends. A historical review

of past BayFest study results weighed against the findings of the BayFest 2013 report

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not only promotes the corroboration of key inferences over time but builds cumulative

knowledge in the assessment of BayFest event outcomes.

• The value of event worth may be scientific or intuitive half-baked guesses. Therefore,

research methodologies used to determine the worth of BayFest in this report with the

methodologies employed by other Mobile event administrators are weighed. If one

were to only consider frequencies and values interpreted in an individual impact report

and not compare these finding to politicized notes about other community events in the

same city would be inequitable. For example, in the case of establishing event worth,

reports incorporating cavalier assumptions and use of borrowed monetary derivations

to arrive at event worth would violate basic reliability concerns. When it comes to the

fiscal impact or return on investment of government subsidizations of community

events careful attention to the source used for economic impact estimation and the

scrutiny of event impact report procedures allows interested parties to do an apples-to-

apples comparison of events hosted in the same city.

• Economic impact and its use to determine the worth of an event is often

misunderstood and inappropriately calculated. Therefore, event benefit, impact

theories, and validity concerns often associated with economic models are explained

for report readers. Unlike some other Mobile event reports boasting exaggerated

events impacts the BayFest 2013 report similar to the 2010, 2011, and 2012 BayFest

studies provides two examination points: both conservative and optimistic estimates

were created to develop an economic impact range. This way a common ground exists

to compare findings to the questionable means used in other reports to those reports

generating values based on academically accepted principles.

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• Beyond the economic impact of an event other event information may be sought to

help host destination tourism. Visitor profiles and an audit of BayFest attendee

preferences for location attractiveness, music proclivity, and travel patterns were

generated. Socio-demographic and psychographic data were collected and interpreted

to assist BayFest planners and Mobile tourism industry professionals with future

decisions related with the image of Mobile, Alabama.

Working under the auspices of the BayFest administrators, Dr. Christopher M. Keshock

(primary researcher and report author) conducted a review of BayFest operations, cash flows, and

event logistics. Primary data was collected at BayFest 2013 originating from an empirical research

design agenda created by Dr. Keshock and other professional academicians. Secondary information

provided by BayFest officials (attendance, organizational spending, service costs, revenue, etc.) was

also used in this report, examined, and then contrasted to other similar leisure event conclusions

found in a review of the literature. Further, as previously mentioned report findings from prior

BayFest studies were also assessed to depict naturally occurring trend impacts over time. As there is

no one individual data source that can supply all of the information needed for this research report, a

variety of sources were conventionally integrated to verify the trustworthiness of qualitative and

quantitative data used in computations. The holistic use of various sources of information provides

triangulation of findings and results in improved reliability. The triangulation approach also offers

greater understanding of the key issues being researched, which in the case of this particular report

serves not only to estimate final impact figures but explain the way values are derived.

Any questions on the merits of this report and its findings should be directed to the author of

the study for clarification on the content and the use of data sets, derivation of numerical values and

averages, standard deviations, effect size and significance or confidence levels. It should be noted the

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findings and interpretations in this report are based on available data, theoretical constructs,

professional prudence, and numerous inferences regarding event values. Since environmental

markets, buying power, and industrial conditions change; data may not warrant exact and everlasting

results. It is recommended that individuals using portions of this report give careful consideration to

local, regional, and national economic conditions in the extrapolation of findings toward business

decisions, governmental policies, and other regulatory applications.

Introduction

It is important that community goals are developed to determine appropriate strategies that

enhance economic, social, and cultural stimulation. When applied to event planning determining

which area events are more likely to meet the underlying objectives of a particular region vary.

Events may be staged to make money; celebrate holidays, seasons, or historical events; provide

cultural or educational experiences; or unite and give a feeling of pride to a particular community

(Mill & Morrison, 2012). If a city wants to differentiate itself from other destinations efforts to create

sustainability or a better quality of life for both residents and visitors now and for future generations

is at the core of event decision making. Attempts then to measure event impacts become integral to

the strategic planning efforts of government agents and most of all taxpayers in and near to event host

areas if public expenditures are allocated to fund festivals and events.

According to Crompton, Lee & Shuster (2001) there are several points in an event analysis at

which different procedures and underlying assumptions can be made that will substantially affect the

interpretation of results and conclusions. For example, sometimes a genuine lack of understanding of

economic impact analyses and the procedures used in them leads to inadvertent errors; but in other

instances, they are used mischievously or strategically to deliberately mislead and generate large

numbers. Calculations of event economic impact by modern economists vary based upon the intent

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and use of the findings. Evidence to determine the true value of new and reoccurring community

events becomes markedly integral to the general public and even more so to the elected officials and

community planners making decisions about which events to sponsor. In concert, when efforts are

made to juxtapose different community events and appraise their value for comparative purposes

caution must be taken. Attention toward the use of well-founded applications integrating a shrewd

observance toward sound economic and social underpinnings is paramount. Inconveniently,

uncorroborated assumptions exist that shelve the importance of certain events over others in a

community. Most often this is due in part toward a lack of acceptable information available to

specifically assess whether an event: 1) Spurs economic activity and to what extent, 2) Expands the

cultural and social opportunities available to residents, and 3) Increases the visibility of an event

location as a tourist destination potentially drawing more visitors.

Therefore, based upon the above concerns concomitant with community event worth an

attempt was made to equate the overall value of BayFest to Mobile. Most importantly efforts to

illustrate the return on investment to Mobile taxpayers in the areas of economic benefits, quality of

life improvements, enhanced public image, and the recirculation of BayFest tourism dollars are

assayed and communicated in the different report sections.

Music Festivals and Special Events

A number of reasons exist to host a festival or musical event. Large outdoor music festivals can

provide an important form of economic activity for host regions since they attract significant inflows of

dollars from non-local visitors and serve as important forms of private-sector regional economic stimuli.

Financially speaking the economic benefits to hosting a music festival include attracting tourists and

their expenditures to an area, increases in the amount of taxes collected from these purchases, and

expanded employment. Similarly, socialization, promoting and preserving culture, improvement on

the quality of life for residents in a community, and gaining recognition and support from various

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publics is espoused as other potential reasons to host a music festival. Not only do festivals and

special events serve as a powerful tool to attract tourists- an especially vital concern during non-peak

travel months- but also functions to create the awareness and build the destination identity for an area

that hosts events. For example, the short-term impact of a music event may, over a period of years, be

expanded exponentially through its continued success and improved reputation that the event brings

to an area (deLisle, 2009). And, in some instances small music festivals have evolved into a major

signature event for a community providing unique and enjoyable experiences for residents and guests

alike.

The music industry is part of a creative community that collectively exports more than $125

billion each year, fueling American jobs while energizing mp3 players and dance floors around the

world (RIAA, 2013). Overall live music concerts in North America generate billions of dollars

annually and have shown steady annual increases over the last decade. Overall ticket revenues have

jumped from $1.7 billion in 2000 to $5.1 billion last year, according to Pollstar's newly released end-

of-2013 data (Pollstar is the concert industry's trade publication of record and this exclusive data

comes from averaging more than 30,000 detailed box office sales reports). Live Nation Entertainment

a music industry company recorded a 19% increase in concert attendance in 2013 compared to 2012

(MSNBC, 2014). This support suggests the American consumer of the 2020s, 2030s, and 2040s will

want to be entertained, and will be prepared to spend more on entertainment products and services

than the median consumer in 2012, 2000, or 1980” (Lee, 2012).

Historically, festivals and events have been a compelling tourist attraction for community

hosts (Mill & Morrison, 2012) and are among the fastest growing segments of tourism in the world

(Getz, 2012). To a large extent public events have been and continue to be important drivers of

tourism activity in a growing number of communities across the country. Few Americans realize that

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travel is a major economic driver despite attempts made by city planners constantly pursuing other

investments to bolster the local economy for their communities. In 2013, travel had a strong

economic impact on the nation’s economy generating $2.0 trillion in economic output, contributed

more than $128.8 billion in tax revenue, and supported 14.6 million American jobs. Influence of

event related tourism activity may also be illustrated at the state level. Visitors to the state of

Alabama spent $8.2 billion and generated $906.7 million in tax receipts and for every $1 million

spent in Alabama by travelers 9 jobs are created which equates to 76,700 jobs (United States Travel

Association, 2013).

BayFest Music Festival

BayFest, a nonprofit 501C3 corporation established 19 years ago, is run by one paid employee

serving as the executive director and a volunteer board of directors comprised of community leaders

who give freely of their time and expertise to guide the festival to success each year. Having grown

substantially from a debut crowd of 50,000 in 1995, expected crowds well over 200,000 concert-

goers annually attend the event over BayFest weekend to witness the more than 125 different musical

acts. Each year musical genres consisting of country, classic rock, alternative, pop, jazz, R&B, rap,

gospel, modern rock and more are scheduled to perform on BayFest main stages. In addition to its

music legends BayFest also promotes up and coming artists. One of the festival’s stages, the

Launching Pad, is specifically designed to spotlight local and regional talent and showcase acts who

aspire for musical greatness.

BayFest has become known for its vast array of renowned musical talent that appeals to a

wide variety of audiences and is suitable for the entire family. Past performers at BayFest include:

Luke Bryan, Kid Rock, Duran Duran, Kenny Chesney, Mary J. Blige, Motley Crue, B.B. King, Stone

Temple Pilots, Lady Antebellum, Reba, Nelly, Bush, Blake Shelton, Al Green, Alan Jackson and

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many, many more (About BayFest, 2013). In 2012, BayFest was named the Top Festival/Event of

the Year in the Southeast by Southeastern Tourism Society! Also in 2012, BayFest was recognized as

one of the Top 20 October Events throughout the southeast, receiving extensive exposure in print,

television and radio in the U.S. and Canada. BayFest was also honored with the same award in 1996,

2000, 2002, 2003, 2009, 2010 & 2011. BayFest was awarded The American Bus Association's Top

100 Event designation in 2012 and named "Alabama Event of the Year" for 2009 by the Alabama

Bureau of Tourism and Travel. In addition, the Alabama Bureau of Tourism and Travel recognized

BayFest for its economic contributions in 1999, 2000, 2001 and 2009. Locally, the event has received

numerous awards from the Lagniappe, the Mobile Bay Monthly and The Mobile Press-Register.

BayFest has generated in excess of $325 million for the Mobile economy since it began in 1995

(www.BayFest.com).

Numerous other attractions are held and services provided during BayFest weekend from a

VIP kick-off reception to multiple meet-and-greet the musician promotions. The event also includes a

Family and Children’s Zone during Saturday and Sunday featuring games and activities for visiting

youth attendees and an on-site hospitality area for corporate sponsors, civil servants, and those

individuals and groups responsible for the organization of BayFest. In addition to the events held

during the festival weekend BayFest also conducts other functions to promote its altruistic values by

giving back to the Gulf Coast community with thousands of dollars in student scholarships and

educational programs.

Two weeks before BayFest weekend on September 21, 2013 music industry entertainers and

executives engaged teenagers in a one-day workshop at the Mobile Civic Center Theater. BayFest’s

“Music Industry Education Program” allow high school students to learn about the music business

through various workshop sessions on copyright law, contract negotiations, stage management, and

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other music production issues. Mobile and Baldwin County public and private high school students

were eligible to apply for BayFest scholarships, with the opportunity to be awarded one of the twenty

$1,000 awards for their music related education interests and endeavors. Scholarship winners also

benefit from a continued mentoring program formed by the BayFest Music Scholarship Program

Committee members and committee volunteers and music professionals are available to the students

throughout the year as a resource.

To date, BayFest has granted close to $70,000 in scholarship funds to students who show

promise in the field of music. The monetary value of the BayFest Music Industry Education Program

made possible by funds raised from the annual 5K Road Race and Fun Run conducted in downtown

Mobile are substantial community augmentations; valuable enough to be a part of this report and

addressed in later sections.

BayFest 2013 was held Friday-Sunday October 4-6, 2013. Festival hours were 6:30 p.m. to

12:30 a.m. Friday, 2 p.m. to 12:30 a.m. Saturday and 2 p.m. to 10 p.m. Sunday. Top acts included

Godsmack, R. Kelly, T.I., Aaron Lewis, the Zac Brown Band, Little Big Town, Gary Allan, Hunter

Hayes, Daughtry, Three Days Grace, the Isley Brothers, Anthony Hamilton, Kellie Pickler and

Sevendust.

In order to meet the needs of its fans in providing a multi-music weekend-long music

extravaganza the space required to host BayFest in downtown Mobile covers a 13 block plot of open-

air expanse (See Figure 1 BayFest 2013 Site Plan). During BayFest weekend the festival is enclosed

by an erected chain-link fence with 3 main control access gates and a smaller entrance positioned at

various locations around the perimeter of the site. Three main stages for marquee entertainers border

the furthermost north, east, and southwest periphery of the cordoned downtown area and 6

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strategically placed minor stages in thoroughfares of the festival streets are used as platforms for

more local musical talent.

Figure 1- BayFest 2012 Site Plan

Similar to all leisure based outdoor events the BayFest Musice Festival is reliant on

cooperative weather during the week leading up to the event, on BayFest weekend, and after the

events for stage and fence breakdown. BayFest 2013 encountered severe weather conditions from

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Tropical Storm Karen where the three main stages (Coca-Cola Stage, the AT&T/Southern Ford

Dealers Stage and the Miller Lite/Wind Creek Casino Stages) operated as usual for headliner bands

and the local and regional lineups on four of the smaller stages (Cafe Stage, the Gospel Stage, the

Radio Avalon Jazz Tent and the Launching Pad) being cancelled as a precautionary measure as

advised by public safety agencies and the National Weather Service. In all a little over 50 acts did not

perform at BayFest 2013 since the smaller stages would be more vulnerable to the potential wind

damage by Tropical Storm Karen. Despite anticipated severe weather predictions BayFest 2013 only

encountered some heavy rainfall on Saturday and Sunday afternoon which may have affected

spectator attendance and did affect some of the musical group participation on BayFest weekend.

BayFest Ticketing and Estimated Attendance

Price is one of the most volatile variables of the marketing mix that affects a consumer’s

decision to purchase a product or service. Decisions to spend money on leisure activities become

even more price sensitive since discretionary income purchases are highly subjective to demand

supply opportunities. The music industry like many other industries in the United States is still in a

pattern of recovery from the latest recession, however the demand to attend music performances and

supply of concerts across the country have remained constant. This may explain why the average cost

to attend a single music concert in 2011 was $66.90 (Pikas, Pikas, Burnmeyer, 2012) with a slight

increase for a single ticket in 2012 at $68.80 and $69.52 for 2013 (Knopper, 2014).

One attractive component offered by BayFest is the opportunity for spectators to experience

multiple musical performances for such a low relative cost. Weekend passes for BayFest 2012 were

$45 and single day passes were listed at $30. For BayFest 2013 weekend passes were sold for $60

and single day entrance $40. Much of the increase from 2012 to 2013 was due to the larger contract

fees charged by musicians and passed along to consumers in the form of higher entrance fees. Despite

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the necessary price increase from BayFest 2012 to BayFest 2013 ($60.00) the Music Festival with its

multiple acts over the course of 3 days still remains below the average cost of an average single

music performance in the United States ($69.52) and almost half the cost for a single day entrance fee

of $40. This reduced cover charge coincides with BayFest’s structure as a non-profit entity and

mission over the last 19 years, which is to offer an inexpensive form of leisure so people with a

limited budget could have a weekend worth of entertainment for a reasonable cost. In contrast, most

music concerts are driven by profit motives which results in charging a higher cost per-person for

admission and with no age related price discrimination opportunities offered (discounts or free

admission to senior citizens or children).

When numerous artists perform and a concert becomes a festival the cost of admission

typically goes up. An example of the increased cost to attend a music festival with multiple

performers is illustrated in a music festivals held along the Gulf Coast Region. Variable ticket pricing

is offered to attend the Hangout Music Festival in Gulf Shores Beach Alabama which has roughly 20-

30 performers with general admission priced at $229, VIP tickets at $999 and Super VIP $1,599

charged for the event in 2014. The weekend passes at the Hangout Festival are almost 4 times more

expensive then the weekend passes charged at BayFest 2013.

Rather than charging admission similar to the going rate of other music concerts in the region

(competition-oriented pricing) which averages over $120 for a single artist performance along the

Gulf Coast or based on the cost of providing a service and profit targeted for event promoters (cost-

plus pricing); BayFest exercises a backward pricing admission fee format for admission (setting ticket

price to what is affordable to consumers rather than from a profit based motive). BayFest’s price

strategy has conventionally attempted to accommodate the needs of patron purchases or affordability

instead of charging an admission price to turn a profit for event promoters.

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In an attempt to measure attendance one method often used at events with gated entrances is

to use ticket sales figures from one year to the next and make incremental or decremental adjustments

to estimate the amount of people who were in attendance. The estimated weekend attendance range

for BayFest 2011 was 229,000 (229,347) to 271,000 (270,848) with a 2% decline for BayFest 2012

or 225,000 (224,760) to 265,000 (265,431) based on the amount of tickets sold which included

advanced weekend passes, group, single day, and those used by sponsors, Mobile city and county

workers, and the media (Keshock, 2013). Paid attendance and related ticket revenue information

provided by BayFest administrators for 2012 and 2013 were used to estimate attendance for BayFest

2013. As previously mentioned there were increases in the cost of admission charged for 2013.

Specifically, pre-paid passes went from $45 to $60 and group tickets and single tickets increased $10.

An examination of ticket sales records itemized in BayFest 2012 and 2013 balance sheets revealed an

overall 15.26% decline in total tickets sold from one year to the next. Using last year’s attendance

range for paid spectators 225,000 to 265,000 and adjusting for a 15.26 % decline in ticket sales

results in an estimated attendance range of 191,000 to 225,000 which was used for BayFest 2013

report purposes. One contributing factor for reduced attendance at BayFest 2013 may be attributed to

the weather conditions caused from Tropical Storm Karen during BayFest weekend.

This attendance range does not fully explicate all BayFest attendees. In addition to pre-paid

and walk-up ticket sales other people attended BayFest that are not reflected. Typically when

estimating event attendance figures those who did not pay for entrance to an event must also be

considered as a contributing attendance factor. For example in the case of BayFest the tradition of

allowing children free admission with a ticketed adult and the volunteers working BayFest go

uncounted for. Subsequently, since the 2013 attendance range values (191,000 to 225,000) are not

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complete values other non-paid spectator attendance variables are addressed in later sections of this

report.

Framework for Measuring Economic Impact

Economic impact can be defined as the net change in an economy resulting from hosting an event.

The change is caused by activity involving the acquisition, operation, development, and use of

facilities and services. Attempts have been made in this report to use information appropriate for a

weekend festival related event economic impact purposes. Data was primarily provided from the

responses to questions contained in two separate surveys; one administered to festival fans and one

administered to business visitors which were then applied toward the compilation of the final results.

Also, economic impact study variable biases often found in economic valuation procedures were also

considered and controlled to shape the report findings.

Efforts are made in the following sections to define and determine the quantitative economic

impact of BayFest based on the following economic modeling components:

• Direct Effects: the increases in local economic activity in the sector where money is spent.

This includes local based purchases of goods and services such as lodging, meals,

transportation, and retail goods by those attending BayFest. Also, included in the direct effects

is the money spent through BayFest purchases such as catering, supplies maintenance and

repair, event production, printing, etc. since this money would not be added to the local

economy if BayFest ceased to operate in Mobile, Alabama.

• Indirect Effects: impacts on the local economy generated by businesses or vendors who

directly sell goods and services to BayFest and its visitors who then purchase more raw

materials from other sectors/suppliers to meet the demand created by BayFest.

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• Induced Effect: local spending by workers employed at local supplier companies and

businesses providing goods and services to BayFest and its visitors.

Economic Impact Visitor Spending

A large part of determining the direct spending purchases by those coming to an area for an

event is a function of defining who and what type of participants and spectators will be attending. In

some cases, local residents may constitute a large portion of the "visitors" to an area, event or its

facility. Their spending would not normally be included as "new dollars" to the region for economic

analysis. Individual facilities, parks, and programs will include a certain percentage of local visitors

that ideally should be separated out in assessing area economic impacts.

BayFest Visitors Spending

This section of the report explains the direct and indirect business volume generated because

of BayFest. Economic impact generally measures new money brought into the economy by out-of-

area visitors. Spending by local (City of Mobile) residents is not included in this section of the

estimate. Local spending merely represents a redistribution of existing money in the community and

as such is not considered new money. Spending by locals attending BayFest who may travel out-of-

town to attend a musical concert in another city if BayFest were not held is an opportunity cost

consideration and should only be used in this context when considering other value impacts.

Impact Region

Visitors to BayFest include spectators, musicians, band members, stage-hands, sponsors,

industry specialists, media, and volunteers. Attempts to decide whether someone is considered a

visitor to an area are of a contentious nature. Discernable approaches exist based upon the distance

individuals travel 10 miles or 50 miles from their residence; or the number of nights stayed 1 night, 2

nights, or 1 week at a location away from their usual home or workplace environment. Since no

24

universal agreement on the distance and length of stay exists and economic impact involves those

individuals not residing or working in the impact region being assessed, visitors in this report are

defined as those who travel to Mobile from outside its geographical limits. On a larger continuum the

impact areas of Mobile County and the State of Alabama are also adopted to enhance discussion

relating to BayFest outcomes.

Misapplications

Time-switchers (concert attendees who already made plans to visit Mobile but switched the

dates of visitation to attend the event) and Casuals Visitors (travelers already in Mobile who received

notice BayFest was being held during the duration of their trip and attended) would not be considered

incremental visitors or those specifically visiting Mobile to attend BayFest. To eradicate any potential

misuse of concert attendees in the calculation of event economic impact the study research design

included asking certain questions as part of the survey administered to the sample subjects.

Specifically, subjects were asked whether their main reason for being in Mobile was to attend

BayFest and whether they switched a pre-planned trip to Mobile to attend the concert; both of which

were used to filter out non-incremental visitors.

Multipliers

While economic impact analyses can get quite complicated, the basic procedure is quite

simple. One must first estimate the change in the number and types of visitors associated with the

policy or action being evaluated, or in this case the spending attributable to BayFest. Visits are

translated into economic terms by estimating the amount of visitors and the spending by these visitors

in the area where an event is held. One method is to estimate daily spending averages multiplied by

the number of external visitors multiplied by the number of days they are in the area to determine

economic benefit:

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Economic Benefit = Number of Visitors x Average Spending Per Day x Days in Area

Or, if available evaluations could be made on a per trip basis which provides an estimate of spending

in one lump sum the subsequent equation would be:

Economic Benefit = Number of Visitors x Amount Spent Total While in Area

Either method derives the total accumulation of dollars accruing to a location to determine the

initial round of spending by tourists on such areas as lodging, food and beverage, transportation, and

miscellaneous retails. This new influx of money will subsequently stir up further rounds of spending

of these initial dollars among industry sectors since visitor spending into an area does not stop as soon

as the dollar has been spent. The spending can then be applied to a model of the region's economy to

estimate the effects in terms of sales, income and jobs.

In order to move from direct spending to indirect spending a multiplier is used. Depending

upon the purposes of a particular study, it is possible to chart additional rounds of spending resulting

from the new dollars originally injected into the local economy creating a larger stimulus. A portion

of the initial dollar re-circulates through the local economy before slowly leaking out. The portion of

re-spending that stays in the community is the “multiplier effect” and the portion lost to re-spending

outside the original impact area is known as “leakages”. Basically the use of a multiplier helps trace

the flows of re-spending from the money initially coming into an area until it completely leaks out.

This ripple effect captures the secondary effects resulting from the initial monetary injection.

The transaction of a multiplier adjustment can be explained in the following way. Direct

spending by event tourists will generate secondary effects as new revenues from businesses

immediately impacted find their way to expenditures elsewhere in the local economy. The indirect

26

spending results when these businesses make purchases from other local businesses based upon

visitors’ direct purchases. Induced effects go a step further as a function of increases in household

spending resulting from wages paid to the workers by businesses serving event visitors. Regional

economic multipliers are used to estimate the secondary effects of visitor spending. Formally,

Economic Impact = Number of Visitors x Average Spending Per Visitor x Multiplier

Another format to measures economic impact is conducted on a group impact basis. This is

accomplished when the type and number of groups are known to event organizers-such as those

working an event. It would be inaccurate to capture only the expenditures of individual respondents

because companies hired to work at an event may be paying for the travel related expenses of

employees. Also, due to the nature of work related duties access to individuals or a random sample of

workers may be difficult to accomplish. Therefore, capturing the expenditures of all group members

through estimates provided by the group’s travel manager paying for tourism and business related

expenses for the duration of the trip may be calculated using the following equation:

Economic Impact = Number of groups x Average Trip Spending Per-Group x Multiplier

Adjustments to Economic Impact

While some economic impact results are conservative in nature and only include direct

expenditures, others attempt to describe the impact upon additional thresholds in a community by

incorporating re-spending or recycling of dollars into calculations. Organizations conducting an

economic impact study must use discretion in determining whether or not additional rounds of

spending are justified; and if so, certain multipliers must be included in analysis procedures. These

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multipliers must be consistent with the geographical area in which they are used and in accordance

with the industries specific to a location or impact region.

Another step when conducting an economic impact study is defining the impact region.

Declaring economic impact boundaries would in turn determine what spending and economic activity

to include in an analysis. The region of interest may be a local area, a multi-county region, one or

more states, or an entire country region. When assessing local economic impacts, researchers

generally define the local region around leisure/tourism sites to be an area within a given radius of the

event location, usually a 20 to 30-mile radius. The area of impact chosen often depends on the area

from which the funding for hosting the event is provided. When designating an impact region for

economic assessments and categorizing incremental visitors a common approach is to use the area

germane with the source of public funding (e.g., the City) initiated to subsidize event costs. Since

BayFest receives annual monies from the local government ($243,000 in 2013) both the impact

region and locals are defined by the geographic boundary of Mobile, Alabama resulting in those

residing outside the city of Mobile as external visitors. In addition to the impacts created to the city of

Mobile the impact of BayFest to Mobile County is provided herein since county dollars ($200,000)

were allocated to BayFest in 2013. For further insight economic impact to the State of Alabama is

included as well even though no government subsidization was provided to BayFest in 2013.

Economic Impact and Economic Benefit

As a matter of course any study seeking economic impact information, especially as financial

support is being provided, it is important to note the differences between economic impact and

economic benefit information. As pointed out by Agha (2005), most studies fail to make the

distinction between the two. Economic benefit is only the economic gain in a predefined local

economy. Economic impact is the total economic loss or gain after event costs have been accounted

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for. To distinguish between economic benefit and economic impact a number of additional criteria are

required. Whereas economic benefit is comprised of the direct spending by visitors and organizations

and subsequent rounds of re-spending of initial dollars through a multiplier effect; economic impact

would take the economic benefit result a step further by subtracting the public dollars invested toward

an event. By subtracting public capital used to subsidize an event illustrates the return on investment

to tax payers in the city where an event is held or “true economic impact”. In this regard and on its

most elementary level the amount of tax revenue accumulated from the spending by event visitors in

an area is compared to the amount of tax payer money given to an event; any additional money after

this is considered economic impact.

Methodology

Resources

The major methodological approach adopted in most event impact studies, particularly ex-

post studies has been to collect information by survey (Burgan and Mules, 2000). Survey information

would be used to depict the type of visitor to an event (local vs. out-of-town), intent of trip, number

of days in the area, amount spent while in the area, and the amount spent on items while in town or at

the event. Surveying represents a primary data source which often is more valid and reliable in

comparison to studies based solely on secondary sources of information. For example, aggregate

estimates calculated by tourism governing bodies on the amount travelers spend in an area or hotel

industry spokespersons claiming marginal increases in bed occupancies during the time a community

event takes place to approximate event attendance. Another generalization is commonplace when

event data is not collected in the form of visitor spending by event travelers. Numerous Mobile,

Alabama events approach the estimation of economic impact amounts where an ambiguous $280

figure is used for the amount spent by travelers per day to any event held in the area and applying a

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2.5 multiple coefficient (Mobile Business View, 2012) to established turnover or secondary

redistribution of initial dollars supposedly spent in the economy. For this reason a triangulation of

primary (on-site surveying) and secondary sources were used herein to provide more adequate

evaluations based on more concrete evidence.

When using primary data (survey responses gathered from subjects) information recorded

from a random sample of people or in this case a portion of event visitors is typically factored up to

the population. A random sample is a smaller number of subjects chosen from a larger population in

such a way that all relevant characteristics of the population are represented in the sample

(Langenbach, Vaughn, & Aagaard, 1994). The sample data provides a representation of the whole

population which can then be used to estimate how much all visitors typically spend when visiting a

host site location.

In order to factor up sample information an accurate estimate of the population or event

attendance is required. As previously mentioned one approach for gated events incorporates the use

of box office or ticketing purchases to determine the amount of people in attendance. However, both

practical and empirical questions abound when efforts are made to evaluate the economic

contributions of an event on a host site location when attendance is based on ticketing. Specifically,

some event patrons are repeat attendees when an event covers more than one day and some attendees

are provided complimentary tickets; moreover free admission for young children can skew the per

head daily spend on event purchases. Distorted practices would also include gathering data from the

same subject(s) or a subject completing more than one survey over the course of a multiple day event.

Since overall ticket purchases is a common practice used to equate attendance it was adopted for this

study. However, efforts were made in this report to consider sampling frame biases mentioned above

and in turn account for these biases where appropriate in subsequent portions of this report. Namely,

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subjects were asked whether they previously completed an on-site event survey earlier, and if so were

not allowed to fill out a second survey. Likewise, since BayFest encourages child participation in

their children’s activity area and kids 12 and under are admitted free to BayFest measures to account

for this in ticket purchases and group size composition were instituted.

Instruments

Three instruments were utilized for this report with two administered on-site during BayFest

weekend and one given during the BayFest 5K/FunRun in 2012 since data for the 2013 road race was

not collected. For BayFest music festival attendees a 31-item questionnaire was developed and for

business travelers a separate 18-item questionnaire was created by the researcher and other academic

professionals. The BayFest 5K/Fun Run questionnaire was composed of a 25 item test. In addition,

for further substance numerous leisure event economic impact, fan audit, and event attitudinal survey

examples were evaluated to address validity concerns in the creation of the survey queries. All

questionnaires were given to a panel of six academicians in the leisure studies (2), economics (2), and

travel & tourism (2) academic areas. Also, the surveys were pilot tested with graduate students

enrolled in a leisure studies program at a nearby institution. Based on a 98% agreement among those

given the attendee questionnaire for suggestions all items originally listed were retained in the final

edition used with the study with some minor rewording for closed end response questions. An 95%

agreement rate was returned for the business traveler survey and a 96% agreement rate for the road

race survey leading to rewording of the questions considered inappropriate.

Efforts to gauge a visitor profile through demographic questions and how much spectators

spent were the two main thrusts of the research agenda for Festival and Road Race attendees. In

comparison efforts to determine direct spending and economic value of the business traveler was the

main purpose of the second instrument with worker group type also carrying weight as a core factor.

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Typically, in the case of event economic impact studies, the surveys administered to fans or sport

event participants generally ask for demographic information (zip code place of residence), visit

intent (whether in town to attend an event), spending related questions and number of people in

immediate group which are used to determine the units of analysis for the results. The unit of analysis

can vary based on the definition of the spending unit and time period covered. It is integral to the

legitimacy of the impact results that both visits and spending be converted to a common unit before

they can be combined to return total visitor spending. Party size and length of stay information are the

most common variables for converting spending data per person, per party, per trip, or per day/night

basis. The BayFest music festival attendees and working travelers are addressed first in the following

pages. The BayFest 5K/Fun Run research design follows afterward since adjustments to the type of

questions used were different.

Two lines of questioning were addressed in the creation of the survey to provide appropriate

estimates of economic benefits resulting from BayFest 2013. The first involves an approximation of

the number of people that came to BayFest (intent of trip was directly related to attending event) and

where they came from (origin of home residence for spectators or workplace location for business

travelers). Both interrogatories provide the basis for estimating tourism revenue as a result of

BayFest. As previously mentioned the number of people that came to BayFest or population was

derived from the ticket sales purchases recorded and provided by the BayFest office. Sample base

information obtained from the surveys administered to subjects attending BayFest was then factored

up to the amount of event tickets purchased.

Attendee Survey

The attendee survey questions 1 through 10 asked subjects for their zip code; gender; age;

marital status; ethnicity; education level; household size; household income; and the type of music

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most often listened to. Questions 11 through 18 were queries relating to attendance at BayFest.

Specifically, number of people in travel party; number of children in travel party 12 and under; years

attended BayFest; whether BayFest was the main reason they were in Mobile; whether they would

have visited Mobile even if BayFest were not being held; if they would have attended another music

concert in another town if BayFest were not in Mobile; number of days and nights they were in town

to attend BayFest; and where they stayed. Questions 19 through 30 asked for spending amounts on

tourism related purchases in: admission, food & beverage, entertainment/bars/sightseeing,

retail/souvenirs, private auto/gas, local transportation/parking, transportation to mobile, lodging, and

other spending not classified in the above categories. Question 31 asked subjects their level of interest

in returning to Mobile for a visit and the last question asked for subject contact information used for a

lucky prize drawing winner from those participating in the study.

The zip code related question was used to determine locals from those considered incremental

visitors or subjects having a resident zip code outside Mobile, the County, and State. Other

demographic related questions (2-10) were used to form an audience audit to segment BayFest

visitors according to personal characteristics. Questions 14-16 were adopted to determine legitimate

BayFest visitors from casual visitors or those that were in town and serendipitously happened to take

in BayFest while here. In other words individuals marking “yes” to question 14 had intent to travel to

Mobile; which was to attend the music festival. Revenue resulting from “yes” responses to question

14 would be money channeling to Mobile as a result of hosting the event. Question 15 depicts time-

switchers or individuals that would have come to Mobile but changed their travel plans to coincide

with the festival. This is an important distinction since these visitors would have come to Mobile

anyway and would not be considered incremental visitors due to the hosting of BayFest.

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Question 16 of the survey attempted to estimate the number of “Stay-cationers” or those that

would have travelled to another city to watch a musical concert. While locals are generally not

included in determining economic impact on a host region since their dollars are considered displaced

spending, it does merit notice since it determines the amount of money that could potentially leave

the area when Mobilians experience music leisure activities in another city. Simply subject were

asked to select “yes” or “no” responses when asked, “If BayFest were not held in Mobile would you

visit another city to attend a concert this year?”

The second key line of questioning in economic impact studies should provide an accurate

estimate of how much the event attendee’s purchase during their visit, leading to estimates of what

they spent in a town because of attending a local event. Spending information collected from surveys

should be measured from when the visitor enters the region to when they leave. Subjects provide

more accurate and complete estimates of spending if spending is itemized within major categories.

Also, well defined spending categories identify the kinds of products and services being purchased,

and in turn the types of businesses receiving these sales (Stynes, 2004). Spending categories generally

include: lodging (hotel, motel, condominiums, bed and breakfast establishments); food and beverage

(restaurants meals and groceries); transportation (air, rail, taxi, rental vehicles, gas, repairs, parts);

recreation and entertainment (tours, bars, clubs, shows, golf); and souvenirs, or other retail purchases

(drug stores, antiques, clothing).

Usually 6-12 spending categories are generally included in economic impact studies to reduce

recall and telescoping errors. Too many spending categories can lead to double reporting for

overlapping categories and too few categories may cause the subject to omit spending on items that

are not listed. Also, when obtaining spending information it is generally acceptable and more

favorable to ask for expenses from an entire party rather than ask for expenses from one individual. In

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most leisure event related cases, usually one person from the party pays for the majority of expenses

on a trip and is knowledgeable about the purchases made. In total nine spending categories were used

for this report.

Also, as previously mentioned party size and length of stay information are the most common

variables for converting spending data per person, per party, per trip, or per day/night basis.

Therefore, question 17 asked for the number of total days and nights, subjects were in Mobile to

attend BayFest 2012. Question 11 asked respondents to write the number of people for whom they

typically pay for that were in their travel party and question 12 asked how many children under 12

years of age were a part of their group.

To verify lodging for out-of-town visitors (question 18) participants were asked to mark

where they stayed while in Mobile by selecting from one of the following: family & friends,

hotel/motel, bed & breakfast, camping, commuting from home, or “other”. The second last question

on the survey was asked to gauge the relative likelihood of a repeat visit to Mobile as a result of

knowledge gained by being in Mobile for BayFest. On a scale of 1-3 where “1” means no interest to

return; “2” undecided and “3” strong interest to return; subjects were asked to select one of the

Likert-scale responses.

Business Traveler Survey

Another instrument similar to the BayFest Attendee Survey was created to assess the spending

patterns and frequencies of BayFest business travelers. The BayFest Business Traveler survey went

through the same instrumentation process as the Attendee Survey for both face and content validation

and 2 questions were subsequently reworded. Home zip code; number of days/nights, travel party

size, amount spent on travel related areas, and place stayed while in Mobile were part of this survey.

35

Additionally, business traveler subjects were asked which type of group representation best

described the purpose of their trip and were instructed to select one of the following responses

(musical group, vendor, sponsor, media, work crew, volunteer, or other. Other questions asked on the

Business Traveler survey that were different from the Attendee Survey were the number of years

subjects had been to Mobile for BayFest and to rate their future interest in returning to Mobile to

work at BayFest again. Survey participants were instructed to mark one of the following responses

(definitely no, probably no, uncertain, probably yes, definitely yes) to determine repeat visits due to

the music festival.

BayFest 5K/Fun Run Survey

The BayFest 5K/Fun Run 2012 survey underwent the same content and face validity tests

taken for the Music Festival surveys. Demographic based queries (1-10) and race visit travel spending

questions (11-21) were used to determine the type of people participating in the road race and the

amount of money they spent while in Mobile for this one day event. Again, it is important to note

surveys were not administered for the 2013 race and therefore data responses collected from the 2012

race were used for this year’s report.

Collection of Data

Once survey questions were finalized individuals conducting the survey (4 college professors

and 11 leisure studies students from a nearby university) were briefed in the area of survey

administration in order to delimit the potential for personal biases or survey misapplications which

could have led to inaccurate assessments. On the day surveys were given (Friday-four hour shift,

Saturday- afternoon and evening 4 hour shifts, Sunday- afternoon and evening 4 hour shifts) 2

surveyors were placed at each of the main street gate entrances to the festival and randomly

approached every third person passing by that was a ticket-holder and over the age of 18 years old.

36

An introductory approach script was read which included a greeting; offer to participate in the study;

the basis of the study; asking for the age of the subject; whether they were responsible for their group

purchases; and whether they had already participated in the study by previously completing the

survey at an earlier time.

A systematic random sample was instituted and pre-screening questions asked to help insure

more varied representation among subjects; especially those who paid for their travel party expenses.

Individuals refusing to participate in the study and those who previously filled-out a survey were

thanked and a score was marked by the survey administrator to track those approached and that

declined participation. Individuals who completed a survey at an earlier time at BayFest were not

allowed to participate a second time to avoid double-counting. For those accepting the offer to

participate a survey script was read to each potential respondent agreeing to take the survey which

explained the purpose of the questionnaire, areas to be completed, and a testament of confidentiality

and discontinuation. Once subjects were finished answering the predetermined questions, survey

debriefing procedures (administrator making sure all items were completed in full) were conducted.

An incentive was used to attract participants whereby subject contact information listed at the end of

survey was used to randomly select a lucky prize winner who received an official autographed guitar

signed by BayFest performers.

As previously mentioned in addition to the BayFest Visitor Survey another survey was

administered to the musical artists, vendors, and workers during Friday, Saturday, and Sunday of

BayFest weekend. Two university professors and two undergraduate students were assigned to patrol

the nine stage areas to approach musical groups for participation in the Business Traveler survey. Due

to access constraints, where some artists had as part of their contractual agreement with BayFest to

clear all backstage areas and deny entrance to those not immediately associated with their travel

37

party, some artists were not a part of the survey sample. As a result a convenience sample was

conducted whereby all other artists were approached to complete the survey over the three day period.

The introductory survey script included asking for the person in the music party who typically paid

the groups bills, the purpose of the study, and a confidentiality disclaimer. If subjects accepted the

offer they were handed a survey, completed the questions, and the survey administrator checked for

completeness when surveys were handed back.

Other individuals working the festival were also approached to participate in the study. Each

of the BayFest sponsor and vendor booth areas, operational stage locations, and worker tents were

accessed by survey administrators. The person responsible for paying group expenses at these

locations was given an opportunity to complete the Business Traveler Survey with refusals noted by

the survey administrator. Another group asked to participate in the survey was the media covering the

event. Every other media group types located at the stage areas wearing media passes were

approached and asked to participate with refusals noted. The same pre and post script procedures

conducted with musical groups, sponsors, vendors, stage hands, and workers was also carried out

with media related personnel.

Data collection for the 2012 BayFest road race was conducted on the morning of the race.

Three undergraduate students were placed at the race registration table and as race participants

checked-in they were asked to complete the survey. Survey confidentiality and purposes statements

were read to subjects and acceptance to participate or rejection to participate were counted.

Completed surveys and the data collected were then used to determine the amount of economic

benefit resulting from hosting the race in Mobile, Alabama.

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Findings

Attendee Sample

There were 1,205 potential BayFest attendees approached to participate in the BayFest Visitor

Survey and 136 refused to participate leaving 1,069 subjects accepting the offer to answer the

attendee survey questions which returned an 89% (88.7) response rate. Of the 1,069 surveys collected

22 were thrown out due to incomplete information leaving 1,047 usable surveys for the study. All

responses to survey questions were coded and entered into a SPSS statistical software package.

Business Traveler Sample

Of the business related travelers in town for BayFest (musical groups, vendors, sponsors,

media, work crews, volunteers) 329 subjects were approached to participate in the study. Of the

individuals responsible for group spending that were approached 34 refused to participate (90%

response rate) and 6 surveys were incomplete and thrown out leaving 289 usable surveys for

assessment. All responses to survey questions were coded and entered into a SPSS statistical software

package.

Road Race Sample

The number of subjects who completed the 2012 road race survey at registration was 122 of

the roughly 800+ runners. Five surveys were incomplete leaving a total of 117 usable surveys. All

responses to survey questions were coded and entered into a SPSS statistical software package.

In consideration of the above three samples (music event attendees, business-related travelers,

road race participants) the general relationship between sample size and its level of accuracy toward

being representative of the population is raised. According to Crompton (1999) an event attracting 1,

000 visitors the number to be sampled with an error range of 5% should be 286 and an event with

500,000 the sample size should be at least 400 subjects in the sample. Given these event sample size

39

guidelines both the attendee and business traveler samples are within the 5 percent error limit and

considered representative of their respective population. The sample size represents a statistical

significance of +/-5% margin at the 95% confidence interval which means that the results reflect the

answers between 90% and 100% of the total population. This confidence level is considered

significant for making sound business decisions.

Population

Accounting for the reduction in paid tickets from 2012 to 2013 BayFest, poor weather due to

Tropical Storm Karen during BayFest weekend, and holding other variables constant (ceteris paribus)

the estimated attendance range used for this report was 191,000 (190,665) – 225,000 (224,561) after

rounding to the nearest one hundredth. Not all visitors are from out of town and therefore have to be

factored out when determining economic assessments. Mobile residents attending BayFest would not

bring new money to the area since they are already in the event impact region. Moreover, of the 128

musical acts coordinated for BayFest 2013, local musical groups based in Mobile and laborers

working the music festival would not marginally add to the economy since they already complete

business in the city even if BayFest were not held. Additionally, and specific to BayFest 2013 as a

result of Tropical Storm Karen most all of the small stage acts were cancelled therefore reducing the

population of BayFest business related travelers. Typically, business related stakeholders comprised

of the musicians; sponsors, vendors, media, volunteer workers, stage hands, and security make up

over 4,500 individuals for the business traveler population. The road race population annually

services 800-900 runners for the event.

40

Festival Attendees

Audience Profile

Population demographics and individual purchasing power are major factors in the design and

planning of events. A person or collection of people who enjoy attending music events can be

associated with a particular lifestyle, attitude, educational level, buying behavior, or a number of

other categorical characteristics. Efforts then to determine like variables amongst event attendees to

improve event strategies can be accomplished through an audit assessment. Efforts were made to

determine the profile of BayFest event spectators. Table 1 below illustrates the frequency response

rates returned from subjects for questions 2-10 on the attendee questionnaire administered at BayFest

2011, 2012, 2013 events.

Table 1-Percentages of BayFest Attendee Demographics 2011, 2012, 2013

Category 2011 2012 2013

Gender

Male 41% 39% 35%

Female 59% 61% 65%

Age

19-24 years 21% 15% 22%

25-34 years 22% 18% 25%

35-44 years 23% 26% 23%

55-64 years 8% 12% 8%

65+ years 1% 1% 1%

Marital Status

Single 43% 37% 40%

Married 40% 46% 41%

Divorced 10% 11% 11%

Live with Partner 4% 4% 5%

Other 3% 2% 3%

41

Race

African American 23% 19% 27%

White 72% 72% 67%

Asian/Pacif Islander 1% 4% 2%

Hispanic 2% 2% 3%

Native American 2% 3% 1%

Education Level

Some HS 7% 6% 7%

HS Graduate 20% 25% 25%

Voc/Technical School 5% 5% 5%

Some College 28% 28% 28%

College Graduate 28% 25% 24%

Some Graduate School 2% 3% 2%

Master’s Degree 8% 6% 7%

Doctoral Degree 2% 2% 2%

Household Income

Under $10,000 9% 10% 10%

$10,001-$30,000 18% 23% 22%

$30,001-$50,000 27% 20% 24%

$50,001-$70,000 19% 19% 17%

$70,001-$90,000 8% 9% 10%

$90,001-$110,000 9% 9% 7%

$110,001-$130,000 2% 3% 3%

$130,001-$150,000 8% 7% 7%

Musical Preference

Country 28% 26% 38%

Alternative 10% 5% 5%

Pop 6% 8% 7%

Rock 22% 34% 23%

Jazz 8% 6% 3%

R & B 10% 11% 14%

Rap 3% 4% 6%

Gospel 2% 4% 3%

Classical 1% 1% 1%

42

Other 10% 1% 0%

2011 N=1,102 2012 N=1,084 2013 N=1,047

The average age recorded for BayFest 2013 attendees was 37 years old (M=36.97, SD=12.70)

in comparison to last year’s mean age of attendees or 40 years old (M=40.48, SD=12.57) and

relatively the same for 2011 data at 37 years old (M=37.40, SD=12.61). The 2013 report returned

subjects as having a little over 3 person for household size (M=3.15, SD=1.78) consisting of 2

children per household (M=1.97, SD=1.61) which mirrored the household structure of 2012 survey

respondents (M=3.00, SD=1.63) household with 2 children per household (M=1.83, SD=1.32). Based

on the most frequent response for each characteristic listed in Table 1 the typical tapestry picture of

BayFest attendees over the last 3 years include:

2011

37 year old, college educated, married, white, female living in a household of three with one child

having a household income of $30,000-$50,000 who prefer country music.

2012

40 year old married, white, female with some college education living in a household with two

children having an annual household income of $10,000-$30,000 and prefer to listen to rock music.

2013

37 year old female, college experienced with almost an equal amount of single (40%) and married

(41%) individuals living in a household of 3 with 2 children earning between $30,000-$50,000 which

listens mostly to country music and secondly rock music.

In general terms single younger patrons, females, higher wage earners, and African Americans

attended BayFest 2013 in comparison to the spectators at BayFest 2012. Efforts to further describe

43

BayFest 2013 attendees according to music listening preference were conducted and listed below in

Table 2. Efforts to determine the profile of attendees based on music preference provides information

helpful for future programming of musicians and sponsorship target market matching activation.

Table 2- Cross-tabulations According to Music Preference BayFest 2013 Attendees

Gender * Music Preference Cross-tabulation

Music Preference

Country Alternative Pop Rock Jazz R&B Rap Gospel Classical

Gender Male

% of Total 11.1% 1.7% 2.3% 10.7% 1.3% 2.5% 2.5% .4% .0%

Female

% of Total 27.0% 3.1% 5.0% 12.4% 1.7% 11.3% 3.8% 3.1% .2%

Total

% of Total 38.0% 4.8% 7.3% 23.1% 3.1% 13.8% 6.3% 3.4% .2%

Marital * Music Preference Cross-tabulation

Music Preference

Country Alternative Pop Rock Jazz R&B Rap Gospel Classical

Marital Single

% of Total 13.6% 1.9% 3.6% 8.4% 1.1% 6.1% 3.8% 1.3% .0%

Married

% of Total 16.8% 2.1% 2.9% 9.0% 1.5% 5.4% 1.7% 1.3% .0%

Divorced

% of Total 4.8% .6% .8% 2.5% .0% 1.3% .4% .6% .0%

Live Partner

% of Total 1.9% .2% .0% 2.5% .2% .4% .2% .2% .0%

Other

% of Total 1.0% .0% .0% .8% .2% .6% .2% .0% .2%

Total

% of Total 38.0% 4.8% 7.3% 23.1% 3.1% 13.8% 6.3% 3.4% .2%

44

Ethnicity * Music Preference Cross-tabulation

Music Preference

Country Alternative Pop Rock Jazz R&B Rap Gospel Classical

Ethnicity Afric Amer

% of Total 1.3% 1.0% 1.3% 1.3% 1.9% 13.0% 4.4% 2.9% .2%

White

% of Total 33.9% 2.9% 5.2% 20.0% 1.0% .2% 1.3% .6% .0%

Asian/Pacif

% of Total .8% .0% .0% .6% .2% .0% .2% .0% .0%

Hispanic

% of Total .4% .4% .0% .8% .0% .2% .0% .0% .0%

Native Amer

% of Total 1.5% .6% .4% .4% .0% .2% .4% .0% .0%

Other

% of Total .2% .0% .4% .0% .0% .2% .0% .0% .0%

Total

% of Total 38.1% 4.8% 7.3% 23.1% 3.1% 13.8% 6.3% 3.4% .2%

Education Level * Music Preference Cross-tabulation

Music Preference

Country Alternative Pop Rock Jazz R&B Rap Gospel Classical

Educ Lvl Some HS

% of Total 3.6% .6% .2% 2.3% .0% .0% .4% .2% .0%

HS Grad

% of Total 9.2% 1.0% 1.9% 5.9% .8% 2.7% 2.7% .6% .0%

Voc/Tech

% of Total 3.3% .4% .2% .8% .2% .6% .0% .0% .0%

Some College

% of Total 10.6% .8% 1.9% 6.5% 1.1% 4.0% 1.5% 1.3% .0%

College Deg

% of Total 8.4% 1.5% 1.9% 5.7% .6% 4.4% .8% .8% .2%

Some Grad

% of Total .6% .0% .2% .0% .0% .8% .6% .0% .0%

Master

% of Total 2.1% .6% .6% 1.5% .4% 1.3% .2% .6% .0%

Doc

45

% of Total .2% .0% .4% .4% .0% .0% .2% .0% .0%

Total

% of Total 38.0% 4.8% 7.3% 23.2% 3.1% 13.8% 6.3% 3.4% .2%

HH Income * Music Preference Cross-tabulation

Music Preference

Country Alternative Pop Rock Jazz R&B Rap Gospel Classical

HH Income Under 10,000

% of

Total

3.6% .8% .4% 2.1% .2% 1.5% 1.3% .4% .0%

10,001-30,000

% of

Total

7.1% .6% 1.5% 6.7% .6% 3.4% 1.1% .8% .0%

30,001-50,000

% of

Total

9.0% 1.1% 1.3% 5.2% .5% 4.0% 1.7% .8% .2%

50,001-70,000

% of

Total

6.7% .6% 1.1% 3.6% 1.2% 2.5% .8% .4% .0%

70,001-90,000

% of

Total

4.6% 1.0% 1.0% 1.0% .4% 1.5% .2% .6% .0%

90,001-110,000

% of

Total

3.3% .6% 1.0% 1.3% .0% .2% .2% .0% .0%

110,001-130,000

% of

Total

1.3% .0% .4% .8% .0% .4% .4% .4% .0%

130,001-150,000

% of

Total

2.5% .2% .6% 2.5% .2% .2% .6% .2% .0%

Total

% of

Total

38.0% 4.8% 7.3% 23.1% 3.1% 13.8% 6.3% 3.4% .2%

N= 1,047

46

Place of Residence

Based upon the recorded zip codes of BayFest attendee survey subjects 12 states were

represented in the sample with the farthest visitors coming from Nevada. Table 3 below illustrates the

frequency distributions and relative percentages of survey responses to the zip code question

administered to respondents from 2011-2013 BayFest events. Roughly 66% (65.90%) of respondents

were from the state of Alabama leaving 34% of the sample traveling interstate to attend BayFest with

Florida (17.2%), Mississippi (9.2%), Louisiana (3.4%), and Georgia (1.3%) residents being the next

largest response frequencies. Other state response zip codes recorded from subjects were less than

one percent of the sample population. In 2010-38%, 2011-36%, and 2012-42% of the sample

surveyed traveled to BayFest from outside the state of Alabama.

Table 3- Percentages of BayFest Attendees 2011, 2012, 2013

State 2011 % 2012 % 2013%

Alabama 64.1 57.7 65.9

Mississippi 13.4 13.4 9.2

Florida 12.5 21.7 17.2

Louisiana 3.1 3.9 3.4

Georgia 1.8 1.0 1.3

Tennessee 1.6 X X

(Less than 1% of responses)

3.5

TX, MD, VA, OH,

MI, MN, SD, IL,

CO, UT

2.26

TX, TN, NC,

OH, SC,

WI, KY, IN,

MO, OK

3.0

NC, TN, SC,

KY, OH, TX

NV

Total 100% 100% 100%

47

Stratum of the sample frequencies from 2011-2013 survey respondent zip codes in Alabama

are depicted in Table 4 below. Of the 1,047 surveys returned in 2013 there were 318 or 30% (30.38)

had a resident zip code matching the city of Mobile and 456 or 43% (43.45) recorded a zip code in

Mobile County. Identifying Mobile as the impact region 30% of the sample lived in this area and

70% were therefore considered incremental visitors (those living outside of Mobile that traveled to

the city to specifically attend BayFest).

Table 4- Percentages of Alabama BayFest Attendees 2011, 2012, 2013

Zip Code 2011 Percent of

Sample Population

2012 Percent of

Sample Population

2013 Percent of

Sample Population

Mobile City 31% 24% 30%

Mobile County 42% 35% 43%

Other AL Counties 22% 23% 33%

Alabama 64% 58% 66%

2012 N= 1,084

Out-of-Town Festival Attendees

Integrating the above frequency estimates and rounding, 729 subjects or 70% in the study

sample were considered incremental visitors that live outside of the city of Mobile. Also, utilizing the

percent responses from Table 4 revealed 591 subjects (57%) live outside Mobile County and 357

(34%) residing outside the state lines of Alabama if the impact region were extended to these

vicinities. In comparison to the 2011 and 2012 BayFest reports, BayFest study subjects in 2013

showed a greater representation of individuals similar to those recorded in 2011 as coming from

48

outside the City of Mobile, Mobile County, and State of Alabama. This longitudinal analysis and

differences/similarities according to annual data responses may be due to a number of issues relating

to the types of musicians who performed each year, weather, or economic conditions at the time

BayFest concerts were held.

Business Travelers

According to the Business Traveler Survey information (N=289) the number of surveyed

business travelers or “other visitors” from out-of-town who were in Mobile for BayFest was close to

237 (82%) and a resulting 52 (18%) of subjects revealed a local zip code classifying them as Mobil-

based organizations. The frequency distribution of business travelers from Mobile County and the

State of Alabama was 19% and 22% respectively resulting in 81% of the BayFest business traveler

sample residing outside the bounds of Mobile County and 78% of those surveyed who were from out

of state. The large frequency of out-of-town business travelers can be explained by the high amount

of music industry specific workers, namely performers having a home base outside the impact region.

The main purpose of sampling business travelers was to obtain direct spending averages

while in Mobile. The city or place where worker groups are based geographically are recorded by

BayFest in the payment of accounts for goods and services and is considered a more accurate estimate

of business traveler origin than sampling probability. Therefore, to distinguish the amount of business

personnel traveling to Mobile the BayFest balance sheet was used to generate a list of the businesses

and payment disbursement locations were used in lieu of zip code responses from the Business

Traveler Survey findings.

Incremental Visitors

Not all visitors residing outside an impact area that come to a city and attend a special event

are incremental. Visitors to BayFest include spectators, musicians, band members, stage-hands,

49

sponsors, industry specialists, media, and volunteers. As previously stated attempts to decide whether

someone is considered a visitor to an area are of a contentious nature. Since no universal agreement

on the distance and length of stay exists and economic impact involves those individuals not residing

or working in the impact region being assessed, visitors in this report are defined as those who travel

to Mobile from outside its geographical limits. Impacts for Mobile County and the State of Alabama

were also used as impact regions in this report to illustrate the effects of BayFest beyond the

immediate place of the City of Mobile.

In addition to excluding locals certain other visitors should not be included in the

measurement of economic impact. Specifically, only those individuals where the visitor’s attendance

at the event is their primary purpose for traveling to an area should be examined. Likewise, an

individual who already planned a trip to a destination but changed the date of the trip to coincide with

an event should not be a part of incremental visitors in an impact analysis. Time-switchers (concert

attendees who already made plans to visit Mobile but switched the dates of visitation to attend the

event) and Casuals visitors (travelers already in Mobile who received notice BayFest was being held

during the duration of their trip and surreptitiously attended) were accounted for in this report. The

Attendee Survey contained a question where subjects were to respond with a “yes” or “no” answer to

whether BayFest was the main reason they were in Mobile (Question 14). This question was to filter

out those who were time-switchers and casuals and the frequency responses to these questions

determine true incremental visitors for calculations of impact.

Of the 729 sample subjects with zip codes outside the City of Mobile 97% survey subjects

returned a “yes” response to the question of BayFest being the main reason they were in Mobile

meaning that they would not have come to Mobile if it were not for BayFest 2013. This produces 712

subjects in the survey sample considered to be true incremental visitors or 68% (=1,047/712) of the

50

total sample size. Therefore, efforts to determine the spending amounts and other economic impact

calculations in this report a 68% value is used when factoring the survey sample results up to the

population of BayFest visitors. BayFest 2012 survey data returned 72% of the spectators with a

residence outside of Mobile. In the case of Business Travelers no adjustments for time switchers and

casuals are made for those listing a place of business zip code outside of Mobile since the purpose of

their travel to Mobile was specific to working at BayFest rather than other leisure related activities.

Going by the total attendance estimates provided by BayFest 2013 and applying the 68%

incremental visitor sample value to the population returns an optimistic estimate of 153,000

(=225,000 x .68) for the weekend and a conservative estimate of 129,880 (=191,000 x .68). Both

estimates account for the necessary deduction of locals attending, time switchers, and casuals and

depict “true economic tourists” since they bring new money to the area because BayFest is held in

Mobile. Previous year BayFest 2012 data recorded true economic tourist counts as 162,000 to

190,800.

For economic tourists with the impact region being Mobile County and accounting for time

switchers and casuals (1.7% of visitors with zip codes outside Mobile County, n=591) 56%

(=1,047/581) is the value used for external visitors. Applying the 56% value of true economic tourists

(spectators living outside of Mobile County) to the population of BayFest attendees results in an

optimistic estimate of 126,000 (=225,000 x 56%) and a conservative estimate of 106,960 (=191,000 x

56%) for economic tourists living outside Mobile County. An Alabama state impact region returns a

34% economic visitor value from the sample N=1,047 since 98.8% or 353 of the 1,047 surveyed

residing outside the state of Alabama were not time-switchers or casual visitors. Applying the 34%

value to the population of BayFest attendees results in an optimistic estimate of 76,400 (=225,000 x

51

34%) and a conservative estimate of 64,940 (=191,000 x 34%) for economic tourists residing outside

the state.

In comparison to BayFest 2010-2012 the amount of true incremental visitors (after accounting

for place of residence and time-switchers and casual visitors), BayFest 2013 sample survey results

returned a lower proportion of true economic tourist in comparison to 2010 and 2012. Table 5 below

depicts the percent of incremental tourist from 2010-2013.

Table 5- Percentages BayFest Incremental Tourists 2010-2013

Residence BayFest

2010

BayFest

2011

BayFest

2012

BayFest

2013

% Living

Outside City

69% 68% 72% 68%

% Living

Outside County

57% 53% 62% 56%

% Living

Outside State

36% 34% 41% 34%

Incremental Visitor Business Travelers

Beyond concert attendees “Business Travelers” must be factored in since these visitors bring

new dollars to the Mobile economy also. This includes the long list of entertainers performing at

BayFest, other visitors who were in town as a result of work responsibilities (including volunteers)

and those who engage in business to business relationships with BayFest. Business travel remains a

52

driving force in the U.S. economy and an integral part of the U.S. economic recovery. In 2012, U.S.

companies are projected to spend $225 billion on business travel and generate $524 billion in

spending. Although business travel is the subject of much debate, new research shows that during the

economic downturn in 2008, a positive correlation exists between investing in business travel and

positive return on your investment. In fact, companies that maintained business travel during the

Great Recession realized a nearly 10:1 return on their investment and nearly tripled their profits

(http://www.ustravel.org/research/domestic-research).

Table 6 lists the type and number of people for each category of business related

travelers/entertainers or “other visitors” for BayFest 2013 exclusive of those attending the concerts as

a spectator. Estimates for the number of people for certain areas were drawn from the Business

Traveler Survey results or provided by the BayFest headquarters; and, where values could not be

derived from these two sources the number of other estimates was extrapolated from the results

concluded in the BayFest 2011 and 2012 reports. For example based upon the survey sample the

average size of a musical group performing at BayFest 2012 was roughly 12 (M=11.63, SD=5.36)

people; with the stage crews numbering 13 per act (M=12.7, SD=2.80); the average amount of

workers at a vendor’s tent returned exactly 14 (M=13.7, SD=12.81) workers; and each BayFest

sponsors traveled with an average of 6 (M=5.7, SD= 2.36) individuals. In comparison BayFest 2013

returned 13 (M=12.75, SD=6.77) people for a musical group; with the stage crews numbering 14 per

act (M=14.1, SD=2.80); the average amount of workers at a vendor’s tent returned exactly 15

(M=14.51, SD=11.72) workers; and each BayFest sponsors traveled with an average of 6 (M=5.7,

SD= 2.36) individuals

As previously mentioned Tropical Storm Karen occurred during BayFest 2013 weekend

creating much concern for the safety of those involved with the event. As a result of anticipated high

53

wind and precipitation forecasts BayFest officials cancelled all small stage acts (53) and some of the

Children’s Area performances on Sunday. In total 70 bands performed at BayFest 2013.

Table 6 - BayFest Business Travelers/Other Visitors BayFest 2012 & 2013

Type Quantity Non-Local

Entertainers 2012 2013

2012 (125 Acts - 30 Local Performing) 95

2013 (128 Acts – 58 Acts Cancelled & Local) 70

Band Members/Support Staff

2012 (95 Acts @ 12 average members per group) 1,140

2013 (70 Acts @ 13 average members per group) 910

Stage Crews

(95 Acts @ 13 members per group) 1,235

(70 Acts @ 14 members per group) 980

Music Industry Professionals 160 160

Sponsors (150)

(6 members per group) 900 900

Vendors (50 Booths total, 8 local vendors)

(42 Vendors @ 14 per booth) 588

(42 Vendors @ 15 per booth) 630

Media (240 Total Media Representatives, 80% local) 48 48

Volunteers/Eco Team (1,000, 90% locals) 100 100

*Total 4,266 3,798

*No adjustments for time switchers and casuals are made for the above other visitors since the purpose of their travel to Mobile was specific to BayFest. ** Survey sample consisted of 292 subjects for 2012 and 289 subjects for 2013.

54

Total Economic Tourists

Combining the total weekend attendee estimates with the “other visitors” (3,798) an optimistic

rounded estimate of 156,798 [153,000 (=225,000 x .68) + 3,798] and a conservative estimate of

133,678 [129,880 (=191,000 x .68) + 3,798] result. These two polar values are referred to in this

report as the range of visitors or “true economic tourists” since these people traveled to Mobile

because of BayFest and brought new money to the area creating a change in the Mobile economy.

True economic tourists for the impact regions of Mobile County and State of Alabama were an

estimated (110,758-129,798) and (68,738-80,298) respectively.

Group Size

One essential factor needed to compute economic impact estimates via event survey

methodology is the average number of people in one’s travel party recorded by the person taking the

survey. Since, total visitor spending is usually estimated by multiplying the average spending per

visitor times the number of visitors a few critical questions must be addressed and retrieved through

the answers given by the leaders of groups attending an event; for instance group size and length of

stay information. Based upon the attendee surveys the largest sized group was 11 people and the

smallest was a one-person group. The overall average group size for economic tourists attending

BayFest 2013 was 2.74 (SD=1.52) for those living outside the City of Mobile. Since children under

twelve are included as part of the group size estimates, but not included in attendance figures since

admitted free to BayFest they were extracted from the overall group size average. Subtracting the

average number of children 12 years old and under per group (.15) as recorded on the frequency

counts from the strata of sample subjects residing outside the City of Mobile results in an average

group size of 2.6 (2.59=2.74-.15). Similarly, accounting for children under twelve for the sample

55

subjects living outside Mobile County and State returned an overall group size of 2.7 (2.65) and 2.8

(2.78) respectfully.

Average groups size for business travelers coming to work BayFest were 12 (M=12.25,

SD=7.12) for those outside the City; 13 (M=12.63, SD=7.29) for those outside Mobile County, and

13 (M=12.74, SD=6.16) for those outside the state of Alabama.

Length of Stay

Not all of the entire non-local concert attendees stay overnight, however due to the nature of

the event lasting into the late evenings fosters the chances for overnight travel. This is especially

suitable if a visitor’s place of residence is over a half a day’s drive or beyond 300 miles to Mobile.

According to the Alabama Bureau of Tourism and Travel the average number nights of stay for

leisure visitors is 3.8. According to Table 7 the average number of days out-of-town BayFest 2013

attendees spent in Mobile was close to 3 (M=2.68, SD=.98) and the number of nights was 2 (M=2.26,

SD=.76). Mean and standard deviation for Mobile County and State of Alabama impact regions are

also in Table 7 along with 2011 and 2012 length of stay information.

Table 7- Number of Days and Nights Incremental Visitors 2011-2013

Residence Average # of Days Average # of Nights

Outside City 2013 M=2.68, SD=.98 M=2.26, SD=.76

2012

2011

M=2.73, SD=.83

M=2.84, SD=.96

M=2.33,SD=.71

M=2.10, SD=1.23

Outside County 2013 M=2.88, SD=.94 M=2.26, SD=.77

2012

2011

M=2.80, SD=.86

M=2.88, SD=.99

M=2.34, SD=.72

M=2.09, SD=1.25

56

Outside State 2013 M=2.95, SD=1.10 M=2.27, SD=.79

2012

2011

M=2.97, SD=.90

M=2.91, SD=.94

M=2.35, SD=.69

M=2.08, SD=1.20

2013 N= 712 Outside City, N= 581 Outside County, N= 353 Outside State

As expected those traveling farther distances from out-of-state were more likely to stay in the

host city longer rather than those who commute due to trip distance. Overall total sample frequency

responses for a three-day attendance returned roughly 68% as the days BayFest sample subjects were

in Mobile to attend the event (see Figure 2 next page). The 3-day attendance response supports the

supposition that BayFest fans are more likely to attend all scheduled dates of the musical festival in

comparison to attending 1 or 2 days only. In comparison to other years and in consideration of

Tropical Storm Karen, BayFest 2013 visitor days overall remained relatively unaffected by the bad

weather.

57

Figure 2- Percentages of Spectator Days Attended

Of the business travelers at BayFest the combined mean average time in Mobile for all

business travelers was near 4 days (M=3.55, SD=1.31) days and 3 nights (M=2.55, SD=1.31). The

musicians averaged a lower amount of time in Mobile at 1.89 days (SD=.96) and 1.0 nights (SD=48)

and the work crews were in town the longest 5.65 days (SD=3.31) and 4.02 nights (SD=3.41). When

business travelers were queried about the number of years they have been at BayFest the media group

has the highest mean of 17 years followed by sponsors 8 years, work crews 7 years, vendors 5 years,

the musicians 3 years and volunteers 2 years.

58

Direct Expenditures

It is important to consider and mete out total visitor expenditure into its component parts of

spectator expenditures and those falling under the category of “other visitor” expenditures. BayFest

draws various groups of people to its host community as categorized in previous sections of this

report which allows one to determine what each group of visitors spends and subsequently adds to the

local economy. While these expenditure accounts are not inclusive of all the travellers in town for the

event and its activities leading up to the music festival- such as the Music Education Workshop-

attempts were made to include as many visitor expenditure estimates via the event surveys and

through the cash flow information supplied by BayFest administrators.

When attendee survey subjects were asks to estimate the amount of money they spent on their

group in Mobile for each of the expenditure categories other items, lodging, and food & beverage

were the highest tourism related purchases. Table 8 (see next page) provides the average amounts

spent in each of the expenditure categories for 2011, 2012, and 2013.

In order to estimate the total amount of direct spending for visitors living outside the city of

Mobile each area is divided by the average party size (2.59) to determine the mean spending per

person. Once the per-person spending average is calculated it is extrapolated to the total amount of

economic tourists or incremental visitors coming from out-of-town per day (excluding business

travellers) to attend BayFest using the optimistic estimate (57,089) and conservative estimate

(48,463).

59

Table 8-Average Per Group and Per Person Spending, Total Direct Spending Living Outside Mobile

2013

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Lodging $ 127.02 2.59 $ 49.04 $ 2,799,785.63 $ 2,376,745.27 Food & Beverage $ 56.92 2.59 $ 21.98 $ 1,254,635.47 $ 1,065,063.31 Entertainment $ 38.51 2.59 $ 14.87 $ 848,840.69 $ 720,583.06 Retail $ 35.80 2.59 $ 13.82 $ 789,106.64 $ 669,874.67 Auto/Gas $ 32.53 2.59 $ 12.56 $ 717,029.02 $ 608,687.80 Parking $ 12.22 2.59 $ 4.72 $ 269,354.28 $ 228,655.54 Local Transport $ 12.73 2.59 $ 4.92 $ 280,595.74 $ 238,198.45 Other $ 129.28 2.59 $ 49.92 $ 2,849,600.74 $ 2,419,033.45 Total $ 445.01 2.59 $ 171.82 $ 9,808,948.22 $ 8,326,841.56

2012

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Lodging $ 124.59 2.5 $ 49.84 $ 3,240,436.39 $ 2,762,010.79 Food & Beverage $ 58.38 2.5 $ 23.35 $ 1,518,393.74 $ 1,294,214.54 Entertainment $ 55.96 2.5 $ 22.38 $ 1,455,452.45 $ 1,240,566.05 Retail $ 52.95 2.5 $ 21.18 $ 1,377,165.96 $ 1,173,837.96 Auto/Gas $ 33.02 2.5 $ 13.21 $ 858,810.58 $ 732,013.78 Parking $ 14.62 2.5 $ 5.85 $ 380,248.66 $ 324,107.86 Local Transport $ 39.01 2.5 $ 15.60 $ 1,014,603.29 $ 864,804.89 Other $ 86.33 2.5 $ 34.53 $ 2,245,339.70 $ 1,913,832.50 Total $ 464.86 2.5 $ 185.94 $ 12,090,450.77 $ 10,305,388.37

2011

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Lodging $ 97.94 2.84 $ 34.49 $ 2,237,687.60 $ 1,816,580.08 Food & Beverage $ 63.54 2.84 $ 22.37 $ 1,451,732.39 $ 1,178,532.76 Entertainment $ 46.47 2.84 $ 16.36 $ 1,061,724.96 $ 861,920.32 Retail $ 38.94 2.84 $ 13.71 $ 889,683.02 $ 722,254.73 Auto/Gas $ 42.28 2.84 $ 14.89 $ 965,993.79 $ 784,204.68 Parking $ 9.82 2.84 $ 3.46 $ 224,362.80 $ 182,140.25 Local Transport $ 43.77 2.84 $ 15.41 $ 1,000,036.62 $ 811,841.03 Other $ 72.73 2.84 $ 25.61 $ 1,661,701.24 $ 1,348,987.85 Total $ 415.49 2.84 $ 146.30 $ 9,492,922.40 $ 7,706,461.70

2012 N=712

60

Adjustments to Direct Spending

Ticket/admission is not included in the above expenditures since adjustments have to be made

to account for non-paying attendees such as complimentary tickets provided to various sponsors and

local groups and whether fans purchased weekend passes for $60 or at the reduced pre-purchase or

group rate of $50. The mean spending for each group recorded from the survey was $138.78. When

applied to the average group size or 2.59 per party those residing outside of Mobile spent $53.58 (=

$138.78 mean/2.59 party size) each to attend BayFest. The difference in amount paid per spectator

($53.58) attending BayFest in comparison to the face value of a BayFest ticket ($60) is attributable to

the reduced advance ticket cost ($50) offered to those pre-purchasing before the event or purchasing

for a group, children under 12 admitted free of charge, and the possibility of fans using

complimentary tickets. The difference in ticket revenue using the mean averages from sample

subjects and the actual paid ticket revenue recorded from the BayFest 2013 budget ($1,102,779)

results from the different ways fans gain entrance to attend BayFest (paid versus non-paid and early-

bird or group purchases). Therefore, since the amount recorded from the BayFest budget for overall

ticket revenue is the more accurate approach it is used to determine ticket spending. Subsequently,

when applying the ticket revenue proceeds from BayFest’s 2013 budget and accounting for true

economic tourists (68%) or those attending BayFest who live outside the city, the ticket/admission

direct spending amount used for this report is $749,890 (=$1,102,779 x 68%) for economic

assessment. The largest difference in ticket revenue from BayFest 2012 to BayFest 2013 was seen in

the area of single-day tickets where a 59% drop in revenue occurred. BayFest 2012 recorded single-

day ticket sales at $213,000 and BayFest 2013 generated $133,280 for those gaining entrance on the

day of the event. Again, the inclement weather may have had a direct effect on attendance and

subsequently walk-up ticket purchases.

61

Another incremental spending adjustment is necessary to accurately assess lodging revenue.

Since it is more likely 2 visitors stayed per room an adjustment to the average amount paid by

economic tourists is made. Half of the mean amount $24.52 (= $49.04/2 persons per room) results

for lodging. However, an additional calculation is made for those visitors staying one per room or that

returned a travel party size of one or 8% (20 of the 250 sample who stayed in a hotel) which spent a

higher amount per day for lodging $155.40. In order to capture a more realistic value for those

staying one per room a weighted average was used to more adequately depict the dispersion of

values. By using a weighted-average instead of a simple average reduces the tendency to over-

emphasize or under-emphasize the average amount visitors paid for lodging. Applying the formula:

=[(Variable(n1)xValue(N1))+(Variable(n2)xValue(N2)…]/(Variable(n1)+Variable(n2)…

returns:

=[(20 one traveler x $155.40 average cost per room) +(126 two person party x $111.55)… 20 one traveler party size + 126 two person party…

= $132.48 spent per group on travel accommodations

Adjusting for 2.59 group size= $51.15 ($132.48/2.59) per person spent lodging

When applied to the optimistic estimate for economic tourists $2,920,102.30 (= $51.15 x 57,089) and

for the conservative estimate $2,478,882.40 (=51.15 x 48,463) result based upon a per group average

spending of $132.48 on lodging. Table 9 (see next page) provides the direct spending amounts with

adjustments made to tickets and lodging for economic tourists that brought incremental revenue to the

city of Mobile based on data collected at BayFest in 2011, 2012, and 2013.

62

Table 9- Total Direct Spending Economic Tourists 2011, 2012, 2013

2013

Expenditures Optimistic Conservative

Estimate Estimate

Tickets $ 749,890.00 $ 749,890.00 Lodging $ 2,920,102.30 $ 2,478,882.40 Food & Beverage $ 1,254,635.47 $ 1,065,063.31 Entertainment $ 848,840.69 $ 720,583.06 Retail $ 789,106.64 $ 669,874.67 Auto/Gas $ 717,029.02 $ 608,687.80 Parking $ 269,354.28 $ 228,655.54 Local Transport $ 280,595.74 $ 238,198.45 Other $ 2,849,600.74 $ 2,419,033.45 Total $ 10,679,154.88 $ 9,178,868.68

2012

Expenditures Optimistic Conservative

Estimate Estimate

Tickets $ 959,735.00 $ 959,735.00 Lodging $ 3,341,480.50 $ 2,848,135.50 Food & Beverage $ 1,518,393.74 $ 1,294,214.54 Entertainment $ 1,455,452.45 $ 1,240,566.05 Retail $ 1,377,165.96 $ 1,173,837.96 Auto/Gas $ 858,810.58 $ 732,013.78 Parking $ 380,248.66 $ 324,107.86 Local Transport $ 1,014,603.29 $ 864,804.89 Other $ 2,245,339.70 $ 1,913,832.50 Total $ 13,151,229.88 $ 11,351,248.08

2011

Expenditures Optimistic Conservative

Estimate Estimate

Tickets $ 840,820.00 $ 840,820.00 Lodging $ 2,300,893.00 $ 1,867,890.90 Food & Beverage $ 1,451,732.39 $ 1,178,532.76 Entertainment $ 1,061,724.96 $ 861,920.32 Retail $ 889,683.02 $ 722,254.73 Auto/Gas $ 965,993.79 $ 784,204.68 Parking $ 224,362.80 $ 182,140.25 Local Transport $ 1,000,036.62 $ 811,841.03 Other $ 1,661,701.24 $ 1,348,987.85 Total $ 10,396,947.82 $ 8,598,592.52

2013 N=712

63

BayFest attendees or true economic tourists living outside the city of Mobile spent an average

of $173.93 per person at BayFest 2013 after adjusting for lodging purchases (weighted mean) and

overall ticket revenue as depicted in Table 10.

Table 10- Per Person and Total Direct Spending Adjusted for Lodging & Ticket Purchases

2013

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 749,890.00 $ 749,890.00 Lodging

$ 51.15 $ 2,920,102.30 $ 2,478,882.40

Food & Beverage $ 56.92 2.59 $ 21.98 $ 1,254,635.47 $ 1,065,063.31 Entertainment $ 38.51 2.59 $ 14.87 $ 848,840.69 $ 720,583.06 Retail $ 35.80 2.59 $ 13.82 $ 789,106.64 $ 669,874.67 Auto/Gas $ 32.53 2.59 $ 12.56 $ 717,029.02 $ 608,687.80 Parking $ 12.22 2.59 $ 4.72 $ 269,354.28 $ 228,655.54 Local Transport $ 12.73 2.59 $ 4.92 $ 280,595.74 $ 238,198.45 Other $ 129.28 2.59 $ 49.92 $ 2,849,600.74 $ 2,419,033.45 Total $ 317.99

$ 173.93 $ 10,679,154.89 $ 9,178,868.68

*Tickets- 68% of total tickets sales *Lodging- 2 person per room and weighted mean average

2013 N=712

If the impact region were Mobile County or the State of Alabama different spending amounts

result. Based upon the same assumptions used for the direct spending of those traveling to Mobile

from outside the city (time switchers, casuals, ticketing, lodging weighted average) the following

tables provide the direct spending amounts or economic benefit of economic tourists residing outside

of Mobile County (Table 11) and those living outside Alabama state boundaries (Table 12).

Table 11- Total Direct Spending Economic Tourist Living Outside Mobile County 2011-2013

2013

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 617,556.24 $ 617,556.24 Lodging

$ 49.99 $ 2,187,062.50 $ 1,856,578.60

Food & Beverage $ 59.15 2.65 $ 22.32 $ 976,533.02 $ 828,970.51 Entertainment $ 41.13 2.65 $ 15.52 $ 679,033.02 $ 576,425.31

64

Retail $ 36.02 2.65 $ 13.59 $ 594,669.81 $ 504,810.11 Auto/Gas $ 35.12 2.65 $ 13.25 $ 579,811.32 $ 492,196.86 Parking $ 17.40 2.65 $ 6.57 $ 287,264.15 $ 243,856.08 Local Transport $ 12.87 2.65 $ 4.86 $ 212,476.42 $ 180,369.41 Other $ 140.34 2.65 $ 52.96 $ 2,316,933.96 $ 1,966,825.38 Total $ 342.03

$ 179.06 $ 8,451,340.44 $ 7,267,588.49

*Tickets- 56% of total tickets sales *Lodging- 2 person per room and weighted mean average

2012 Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 826,438.30 $ 826,438.30 Lodging

$ 44.78 $ 2,522,412.62 $ 2,145,947.16

Food & Beverage $ 57.15 2.81 $ 20.34 $ 1,145,623.61 $ 974,641.39 Entertainment $ 56.50 2.81 $ 20.11 $ 1,132,593.77 $ 963,556.23 Retail $ 54.52 2.81 $ 19.40 $ 1,092,902.88 $ 929,789.12 Auto/Gas $ 34.48 2.81 $ 12.27 $ 691,182.89 $ 588,025.11 Parking $ 14.31 2.81 $ 5.09 $ 286,856.94 $ 244,044.06 Local Transport $ 39.29 2.81 $ 13.98 $ 787,603.70 $ 670,055.30 Other $ 87.17 2.81 $ 31.02 $ 1,747,401.75 $ 1,486,605.25 Total $ 343.42

$ 166.99 $ 10,233,016.46 $ 8,829,101.92

*Tickets- 62% of total tickets sales *Lodging- 2 person per room and weighted mean average

2011 Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 655,345.00 $ 655,345.00 Lodging

$ 36.44 $ 1,842,916.56 $ 1,496,080.64

Food & Beverage $ 66.80 2.87 $ 23.28 $ 1,177,123.07 $ 955,589.13 Entertainment $ 48.15 2.87 $ 16.78 $ 848,480.17 $ 688,796.66 Retail $ 42.57 2.87 $ 14.83 $ 750,151.63 $ 608,973.49 Auto/Gas $ 45.66 2.87 $ 15.91 $ 804,602.38 $ 653,176.64 Parking $ 10.03 2.87 $ 3.49 $ 176,744.68 $ 143,481.42 Local Transport $ 49.02 2.87 $ 17.08 $ 863,810.97 $ 701,242.20 Other $ 53.77 2.87 $ 18.74 $ 947,513.58 $ 769,192.03 Total $ 316.00

$ 146.54 $ 8,066,688.04 $ 6,671,877.21

*Tickets- 57% of total tickets sales *Lodging- 2 person per room and weighted mean average

2013 N=581

65

Table 12- Total Direct Spending Economic Tourists Living Outside Alabama 2011-2013

2013

Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 374,944.86 $ 374,944.86 Lodging

$ 47.63 $ 1,235,141.16 $ 1,048,526.82

Food & Beverage $ 57.97 2.78 $ 20.85 $ 540,747.50 $ 459,047.33 Entertainment $ 39.43 2.78 $ 14.18 $ 367,805.31 $ 312,234.54 Retail $ 39.13 2.78 $ 14.08 $ 365,006.89 $ 309,858.93 Auto/Gas $ 34.99 2.78 $ 12.59 $ 326,388.73 $ 277,075.49 Parking $ 12.19 2.78 $ 4.38 $ 113,709.02 $ 96,529.01 Local Transport $ 9.53 2.78 $ 3.43 $ 88,896.39 $ 75,465.26 Other $ 145.77 2.78 $ 52.44 $ 1,359,750.95 $ 1,154,309.63 Total $ 339.01 2.78 $ 169.58 $ 4,772,390.81 $ 4,107,991.87 *Tickets- 34% of total ticket sales

*Lodging- 2 person per room and weighted mean average

2012 Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 546,515.50 $ 546,515.50 Lodging

$ 44.29 $ 1,666,987.02 $ 1,424,897.88

Food & Beverage $ 57.84 2.87 $ 20.15 $ 758,530.29 $ 648,372.29 Entertainment $ 57.74 2.87 $ 20.12 $ 757,218.86 $ 647,251.32 Retail $ 54.06 2.87 $ 18.84 $ 708,958.29 $ 605,999.41 Auto/Gas $ 37.74 2.87 $ 13.15 $ 494,933.14 $ 423,056.20 Parking $ 14.50 2.87 $ 5.05 $ 190,157.14 $ 162,541.46 Local Transport $ 40.91 2.87 $ 14.25 $ 536,505.43 $ 458,591.12 Other $ 95.46 2.87 $ 33.26 $ 1,251,889.71 $ 1,070,083.32 Total $ 358.25 2.87 $ 169.12 $ 6,911,695.38 $ 5,987,308.50 *Tickets- 41% of total ticket sales

*Lodging- 2 person per room and weighted mean average

2011 Expenditures Mean Party Size Per Person Optimistic Conservative

Spend Estimate Estimate

Tickets

$ 420,410.00 $ 420,410.00 Lodging

$ 49.82 $ 1,616,360.08 $ 1,311,760.60

Food & Beverage $ 71.55 2.88 $ 24.84 $ 806,030.63 $ 654,135.94 Entertainment $ 53.40 2.88 $ 18.54 $ 601,565.83 $ 488,202.08 Retail $ 45.24 2.88 $ 15.71 $ 509,641.17 $ 413,600.42 Auto/Gas $ 47.60 2.88 $ 16.53 $ 536,227.22 $ 435,176.39

66

Parking $ 9.26 2.88 $ 3.22 $ 104,316.47 $ 84,658.26 Local Transport $ 62.95 2.88 $ 21.86 $ 709,149.24 $ 575,511.63 Other $ 69.27 2.88 $ 24.05 $ 780,345.79 $ 633,291.35 Total $ 359.27 2.88 $ 174.57 $ 6,084,046.43 $ 5,016,746.68 *Tickets- 32% of total ticket sales

*Lodging- 2 person per room and weighted mean average

2013 N=353

Based upon the on-site event survey response data collected at BayFest 2013 and weighted average

adjustments to lodging, intent of trip, and ticket sales purchase receipts the average spending per

person for true economic tourists living outside the City of Mobile was $173.93, for BayFest

attendees traveling from outside Mobile County $179.06, and those with a residence outside the State

spent $169.58 while in town.

Direct Expenditures Business Travelers

Also included in the amount of revenue accruals to the city of Mobile is the amount spent by

visitors who were in town to work or those doing business related activities aligned with BayFest.

Based upon entertainers performing at BayFest, individuals who were in town to work, and those who

engage in business to business relationships with BayFest- as previously listed in Table 6 of this

report- there were roughly 3,798 non-local business travelers to Mobile. When factoring up the

sample results taken from business related travelers (N=289) to this population, 3,114 business

individuals came from outside the City of Mobile, 3,076 came from outside Mobile County, and

2,962 held a zip code outside the state of Alabama; all of which considered to be true economic

tourists since they were in Mobile specifically to work and traveling from distances outside the

impact zones.

Average expenditures returned from the business traveler surveys for business visitors with a

home base outside the city are shown in Table 13. BayFest business traveler per-person spending for

67

each tourism expense and adjusted for average group size (12) returns lodging ($63.90) as the highest

amount spent followed by transportation ($56.73) and food and beverage ($39.66). When applied to

the total amount of incremental business visitors to Mobile over $ 926,608 dollars in direct spending

occurs from the musical groups, vendors, workers, sponsors and other business workers who travelled

to Mobile and spent money on tourism related goods and services. Extending the impact region to

Mobile County (N=235, 12.63 group size) and state of Alabama (N=224, 12.87 group size) where

survey response frequencies indicated an 81% and 78% of business visitor zip codes; the direct

spending amounts of $894,753.98 resulted for business travelers coming from outside the County and

$971,998.53 for those located outside of Alabama.

Table 13- Direct Expenditures of Business Travelers to Mobile City 2011, 2012, 2013

2013 Expenditures Average Per Average Per Number Total Direct

Group Size Person Visitors Spend

Tickets $ 174.33 12 $ 14.53 3,798 $ 55,175.45 Lodging $ 766.83 12 $ 63.90 3,798 $ 242,701.70 Food & Beverage $ 475.95 12 $ 39.66 3,798 $ 150,638.18 Entertainment $ 189.78 12 $ 15.82 3,798 $ 60,065.37 Retail $ 147.98 12 $ 12.33 3,798 $ 46,835.67 Auto/Gas $ 205.39 12 $ 17.12 3,798 $ 65,005.94 Local Transportation $ 123.37 12 $ 10.28 3,798 $ 39,046.61 Transportation $ 680.71 12 $ 56.73 3,798 $ 215,444.72

Other $ 163.33 12 $ 13.61 3,798 $ 51,693.95 Total $ 2,927.67

$ 243.97

$ 926,607.56

2012 Expenditures Average Per Average Per Number Total Direct

Group Size Person Visitors Spend

Tickets $ 120.54 12 $ 10.05 4,266 $ 42,851.97 Lodging $ 832.86 12 $ 69.41 4,266 $ 296,081.73 Food & Beverage $ 355.13 12 $ 29.59 4,266 $ 126,248.72 Entertainment $ 159.31 12 $ 13.28 4,266 $ 56,634.71 Retail $ 147.20 12 $ 12.27 4,266 $ 52,329.60 Auto/Gas $ 293.38 12 $ 24.45 4,266 $ 104,296.59 Local Transportation $ 45.81 12 $ 3.82 4,266 $ 16,285.46

68

Transportation $ 1,068.42 12 $ 89.04 4,266 $ 379,823.31

Other $ 121.10 12 $ 10.09 4,266 $ 43,051.05 Total $ 3,143.75

$ 261.98

$ 1,117,603.13

2011 Expenditures Average Per Average Per Number Total Direct

Group Size Person Visitors Spend

Tickets $ 277.60 14 $ 19.83 4,170 $ 82,685.14 Lodging $ 811.90 14 $ 57.99 4,170 $ 241,830.21 Food & Beverage $ 313.33 14 $ 22.38 4,170 $ 93,327.58 Entertainment $ 82.22 14 $ 5.87 4,170 $ 24,489.81 Retail $ 143.33 14 $ 10.24 4,170 $ 42,691.86 Auto/Gas $ 205.83 14 $ 14.70 4,170 $ 61,307.94 Local Transportation $ 16.67 14 $ 1.19 4,170 $ 4,965.28 Transportation $ 1,127.78 14 $ 80.56 4,170 $ 335,917.33

Other $ 57.22 14 $ 4.09 4,170 $ 17,043.39 Total $ 3,035.88

$ 216.85

$ 904,258.54

2013 N=237

Since BayFest spectators and business related travelers create a change to the local Mobile

economy as a result of their spending while in the area both are used to determine the direct spending

of incremental visitor expenditures. Table 14 was the combined amount of these two sources and

returns an optimistic estimate of $11,605,762 and a conservative estimate of $10,105,476.

Table 14- Total Direct Spending of BayFest Incremental Visitors

2013

Expenditures Spectators Spectators Business Combined Combined

Optimistic Conservative Travelers Optimistic Conservative

Tickets $ 749,890.00 $ 749,890.00 $ 55,175.45 $ 805,065.45 $ 805,065.45

Lodging $ 2,920,102.30 $ 2,478,882.40 $ 242,701.70 $ 3,162,804.00 $ 2,721,584.10

Food & Bev $ 1,254,635.47 $ 1,065,063.31 $ 150,638.18 $ 1,405,273.65 $ 1,215,701.49

Entertainment $ 848,840.69 $ 720,583.06 $ 60,065.37 $ 908,906.06 $ 780,648.43

Retail $ 789,106.64 $ 669,874.67 $ 46,835.67 $ 835,942.31 $ 716,710.34

Auto/Gas $ 717,029.02 $ 608,687.80 $ 65,005.94 $ 782,034.96 $ 673,693.74

Local Transport $ 269,354.28 $ 228,655.54 $ 39,046.61 $ 308,400.89 $ 267,702.15

Transportation $ 280,595.74 $ 238,198.45 $ 215,444.72 $ 496,040.46 $ 453,643.17

Other $ 2,849,600.74 $ 2,419,033.45 $ 51,693.95 $ 2,901,294.69 $ 2,470,727.40

Total $ 10,679,154.89 $ 9,178,868.68 $ 926,607.56 $ 11,605,762.45 $ 10,105,476.24

69

2012

Expenditures Spectators Spectators Business Combined Combined

Optimistic Conservative Travelers Optimistic Conservative

Tickets $ 959,735 $ 959,735 $ 42,852 $ 1,002,587 $ 1,002,587

Lodging $ 3,341,481 $ 2,848,136 $ 296,082 $ 3,637,562 $ 3,144,217

Food & Bev $ 1,518,394 $ 1,294,215 $ 126,249 $ 1,644,642 $ 1,420,463

Entertainment $ 1,455,452 $ 1,240,566 $ 56,635 $ 1,512,087 $ 1,297,201

Retail $ 1,377,166 $ 1,173,838 $ 52,330 $ 1,429,496 $ 1,226,168

Auto/Gas $ 858,811 $ 732,014 $ 104,297 $ 963,107 $ 836,310

Local Transport $ 380,249 $ 324,108 $ 16,285 $ 396,534 $ 340,393

Transportation $ 1,014,603 $ 864,805 $ 379,823 $ 1,394,427 $ 1,244,628

Other $ 2,245,340 $ 1,913,833 $ 43,051 $ 2,288,391 $ 1,956,884

Total $ 13,151,230 $ 11,351,248 $ 1,117,603 $ 14,268,833 $ 12,468,851

2011

Expenditures Spectators Spectators Business Combined Combined

Optimistic Conservative Travelers Optimistic Conservative

Tickets $ 840,820 $ 840,820 $ 82,685 $ 923,505 $ 923,505

Lodging $ 2,300,893 $ 1,867,891 $ 241,830 $ 2,542,723 $ 2,109,721

Food & Bev $ 1,451,732 $ 1,178,533 $ 3,328 $ 1,545,060 $ 1,271,860

Entertainment $ 1,061,725 $ 861,920 $ 24,490 $ 1,086,215 $ 886,410

Retail $ 889,683 $ 722,255 $ 42,692 $ 932,375 $ 764,947

Auto/Gas $ 965,994 $ 784,205 $ 61,308 $ 1,027,302 $ 845,513

Local Transport $ 224,363 $ 182,140 $ 4,965 $ 229,328 $ 187,106

Transportation $ 1,000,037 $ 811,841 $ 335,917 $ 1,335,954 $ 1,147,758

Other $ 1,661,701 $ 1,348,988 $ 17,043 $ 1,678,745 $ 1,366,031

Total $ 10,396,948 $ 8,598,593 $ 904,259 $ 11,301,206 $ 9,502,851 ____________________________________________________________________________

The total direct spending of incremental visitors living outside Mobile County was $9,346,094

for an optimistic estimate and $8,162,342 for a conservative estimate. The total direct spending of

incremental visitors living outside the state was $ 5,744,389 (optimistic) and $ 5,079,990

(conservative). For the total direct spending categories parking was considered part of the local

transportation area.

70

Economic Impact Visitor Spending

Indirect Impact

In reaction to the several shortcomings and abuses common to economic impact studies,

discretion must be used when it comes to arriving at a numerical estimate of the influence of an event

on a host community. As outlined in the previous sections the direct spending impact was basically a

function of the number of out-of-town visitors, average amounts these visitors spent, and the number

of day’s visitors were in-town specifically to partake in BayFest activities. Moving forward from total

visitor spending then, the use of regional multipliers was applied to determine further rounds of re-

spending circulating in the Mobile community and contiguous areas as a result of accruals from

BayFest economic tourists.

Multipliers

Once direct spending or the initial visitor expenditures injected into an economy has been

calculated it is multiplied by a regional multiplier to calculate the total economic impact. According

to Humphrey (1994) the most natural use of multiplier applications reports the multiplier = (indirect

benefits + direct benefits) ÷ direct benefits and since it is the most widespread amongst economic

impact estimations. In an attempt to remedy some of the problems associated with selecting

appropriate multipliers this study inured statistical software multipliers along with those cited in other

Mobile event economic impact reports. Multiplier values and inferences from other music festivals

reports were not used since it would be inappropriate to use multipliers from events located in

different geographical regions.

The multiplier (1.7552) used in Table 15 is the RIMS II average output multiplier for Mobile

developed by the U.S. Department of Commerce, Bureau or Economic Analysis in hotels (1.7381),

eating and drinking (1.7715), and retail (1.7559)... Thus, the total direct impact estimation taken from

71

Table 14 and applying the RIMS II multiplier to create indirect impacts and total economic impacts

for the expenditure categories are optimistically near $20 million and $18 million conservatively.

Table 15- City of Mobile Total Economic Impact from Incremental Visitors 2013

Expenditure Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Tickets $ 805,065 $ 607,985 $ 1,413,051 $ 805,065 $ 607,985 $ 1,413,051

Lodging $ 3,162,804 $ 2,388,550 $ 5,551,354 $ 2,721,584 $ 2,055,340 $ 4,776,924 Food & Bev $ 1,405,274 $ 1,061,263 $ 2,466,536 $ 1,215,701 $ 918,098 $ 2,133,799

Entertain $ 908,906 $ 686,406 $ 1,595,312 $ 780,648 $ 589,546 $ 1,370,194

Retail $ 835,942 $ 631,304 $ 1,467,246 $ 716,710 $ 541,260 $ 1,257,970

Auto/Gas $ 782,035 $ 590,593 $ 1,372,628 $ 673,694 $ 508,774 $ 1,182,467

Local Trans $ 308,401 $ 232,904 $ 541,305 $ 267,702 $ 202,169 $ 469,871

Transport $ 496,040 $ 374,610 $ 870,650 $ 453,643 $ 342,591 $ 796,234

Other $ 2,901,295 $ 2,191,058 $ 5,092,352 $ 2,470,727 $ 1,865,893 $ 4,336,621

Total $ 11,605,762 $ 8,764,672 $ 20,370,434 $ 10,105,476 $ 7,631,656 $ 17,737,132

_______________________________________________________________________________ RIMS II Multiplier of 1.7552

Applying the multiplier effect to the traveler direct spending amounts recorded from the attendee and

business traveler surveys returns a visitor economic impact of $14,326,543 to $16,404,264 to Mobile

County and $8,916,399 to $10,082,552 to the state of Alabama.

Economic Impact Organizational Output Spending

Economic benefits of visitor spending were tabulated in the previous sections or how much

people spend during their stay in Mobile to attend BayFest. Another component illustrating how

much is spent by event organizers and stakeholders along with the source of this funding is also

appurtenant in the weighing of economic change effects to an area hosting an event. When an

organization hosts an event it spends money in the local community to pay for items associated with

running the operations of its entities, thus adding to the economic flow of dollars. Mobile

establishments providing these goods and services benefit from BayFest’s local purchases every year.

72

A direct economic impact attributable to BayFest might include revenues from a Rental

Company providing stage equipment for the event. Indirect effects include increases in sales, and

ultimately elevating income or jobs in Mobile’s industry sectors that support the immediate

beneficiaries of BayFest purchases. For example, an indirect impact resulting from BayFest renting

stage equipment might include the increased revenue of an electronics wholesaler that supplies

equipment to the rental company. Induced effects are the household spending of individuals who

experienced increased earnings as a result of BayFest. Groceries or retail goods purchased by rental

company employees with the earnings from BayFest’s annual rental arrangements are representative

of monetary ripples that occur locally with the consideration of leakages during subsequent rounds of

re-spending.

The below categorical spending areas in Table 16 were taken from the 2012-2013 BayFest

budget and subsequently analyzed toward BayFest 2013 purchases of goods and services. All of the

categories were individually examined for expenditures made to local businesses or those situated in

Mobile. Any portion of spending paid to an establishment outside of Mobile was extracted from the

individual category amount listed in the budget since this would be considered a leakage or payments

made to companies not in the local impact area. Certain 2012-2013 budget expenditure categories for

goods and services made outside of Mobile were not shown and excluded because they are not

considered incremental income to local businesses and areas where only partial payment from

BayFest were made to local businesses appear in Table 16.

For example a great majority of the operational spending to run BayFest is paid to the

entertainers residing outside the Mobile area with a portion paid to local musicians. Since the small

stage acts were cancelled for BayFest 2013 due to poor weather, money paid to local musicians were

different in comparison to last year’s payment ($20,000) to local musicians performing at BayFest

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2013 ($8,770). Other expenses were paid to companies located outside the City of Mobile that are

located in Mobile County, in Alabama, and beyond since there were not enough businesses in town to

meet the demand or provide the goods services required for BayFest weekend. These expenses were

also accounted for in the direct organizational spending assessments for Mobile County and Alabama

computations.

Table 16- Total Economic Impact Organizational Spending BayFest 2013

Operational Direct Indirect Total Expense Impact Impact Impact

ARTIST/STAFF LODGING $ 36,559.00 $ 27,609.36 $ 64,168.36 BACKSTAGE CATERING $ 62,100.00 $ 46,897.92 $ 108,997.92 DRESSING ROOMS $ 16,247.00 $ 12,269.73 $ 28,516.73 GENERATORS $ 11,135.00 $ 8,409.15 $ 19,544.15 STAGE EQUIPMENT $ 35,920.00 $ 27,126.78 $ 63,046.78 STAGE LABOR $ 84,183.00 $ 63,575.00 $ 147,758.00 TRANSPORTATION $ 6,923.00 $ 5,228.25 $ 12,151.25 LOCAL TALENT $ 8,770.00 $ 6,623.10 $ 15,393.10 BUILDING MATERIALS $ 2,926.00 $ 2,209.72 $ 5,135.72 COMMUNICATIONS $ 2,800.00 $ 2,114.56 $ 4,914.56 ELECTRICAL $ 443.00 $ 334.55 $ 777.55 HEADQUARTERS $ 1,529.00 $ 1,154.70 $ 2,683.70 PARKING LOTS $ 51,800.00 $ 39,119.36 $ 90,919.36 PORTOLETS $ 8,643.00 $ 6,527.19 $ 15,170.19 SECURITY $ 27,000.00 $ 20,390.40 $ 47,390.40 SIGNAGE $ 9,279.00 $ 7,007.50 $ 16,286.50 SITE TRANSPORTATION $ 627.00 $ 473.51 $ 1,100.51 SOUVENIRS $ 42,983.00 $ 32,460.76 $ 75,443.76 SUPPLIES $ 1,525.00 $ 1,151.68 $ 2,676.68 TICKET SELLERS $ 750.00 $ 566.40 $ 1,316.40 TICKET COORDINATOR $ 8,289.00 $ 6,259.85 $ 14,548.85 VENDOR COORDINATOR $ 1,000.00 $ 755.20 $ 1,755.20 VIP AREA $ 56,631.00 $ 42,767.73 $ 99,398.73 BMI/ASCAP $ - $ - $ - INSURANCE $ 37,167.00 $ 28,068.52 $ 65,235.52 LICENSE $ 5,918.00 $ 4,469.27 $ 10,387.27 MARKETING FEE $ 9,990.00 $ 7,544.45 $ 17,534.45 MARKETING EXPENSES $ 116,672.00 $ 88,110.69 $ 204,782.69 PLANNING EXPENSES $ 2,637.00 $ 1,991.46 $ 4,628.46 SPONSOR RECEPTION $ 1,678.00 $ 1,267.23 $ 2,945.23

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TICKETS/PASSES $ 8,808.00 $ 6,651.80 $ 15,459.80 VOLUNTEERS $ 5,093.00 $ 3,846.23 $ 8,939.23 BANK SERVICE CHARGES $ 19,628.00 $ 14,823.07 $ 34,451.07 POSTAGE $ 9,051.00 $ 6,835.32 $ 15,886.32 GIFTS & FLOWERS $ 6,194.00 $ 4,677.71 $ 10,871.71 Office Supplies, Printing, Phone $ 16,222.00 $ 12,250.85 $ 28,472.85 BANK OPERATIONS $ 5,500.00 $ 4,153.60 $ 9,653.60 PHOTOGRAPHY $ 14,375.00 $ 10,856.00 $ 25,231.00 SCHOLARSHIP PROGRAM $ 22,839.00 $ 17,248.01 $ 40,087.01

5K Run $ 6,640.00 $ 5,014.53 $ 11,654.53 TOTAL $ 766,474.00 $ 578,841.16 $ 1,345,315.16

2013 City $ 766,474 $ 578,841 $ 1,345,315

2013 County $ 774,139 $ 584,630 $ 1,358,769

2013 State $ 797,133 $ 601,995 $ 1,399,128

In further review of BayFest organizational spending certain cash payments to locals in 2013

via the music scholarships awarded to area students and exercise or health benefits in the form of the

BayFest Road Races creates influences beyond economic benefits by improving the general quality of

life in Mobile. Monetarily though the scholarship monies paid to locals and the preparation of the

music workshop ($22,839) is included in the 2013 report as part of organizational spend and the

economic impact of the BayFest Road Race should also be included to this report.

Despite the unavoidable payments to external entities outside the Mobile area, BayFest 2013

directly spent $766,474 dollars locally as incremental income to Mobile which has an economic

impact of $1,345,315. After applying the spending multiplier (1.7552). The total direct impact of

BayFest organizational spending for Mobile County was $774,139 resulting in an economic impact of

$1,358,769 and for the State returned $797,133 direct spending and $1,399,128 of economic impact.

75

Other monetary benefits resulting from BayFest organizational related expenditures such as city,

county, and state tax generated from direct spending are discussed in the next section of this report

along with other fiscal considerations.

BayFest Road Race

BayFest road race survey data was not collected for 2013 due to time constraints, therefore

on-site survey data from the 2012 race was dissected for economic benefit values. Since the road race

is a part of Bayfest operations and adds to the local economy survey data was collected, entered into a

SPSS statistical software program where participant spending categories were itemized, and the same

extraction of locals, time switchers, and casuals to determine true economic tourists competing in the

road race was conducted. All previous and relevant issues mentioned in earlier sections of this report

germane with calculations of event economic impact were employed to the BayFest Road Race data.

Therefore, in consideration of the Road Race event survey data (N=117) 32% of participants returned

a zip code outside the City of Mobile and considered true economic tourists, 15% were from outside

Mobile County, and 5% competed in the race after traveling to Mobile from outside the state of

Alabama. The economic impact to the City of Mobile from the BayFest Road Race was $57,502, to

Mobile County $33,057, and the State of Alabama $10,650. All three impacts are considered to

change the economic activity in Mobile City, Mobile County, and State of Alabama as a result of

hosting the race in Mobile and included in the total economic impact of the BayFest organization

operation in 2013. Integrating the 2012 data is considered a conservative approach since the road race

in 2013 had more participants in comparison to 2012 and would have brought more incremental

dollars to the impact regions. Adding the direct purchases by BayFest Road Race Participants with

the direct spending estimates of BayFest Music Festival spectators and workers who were in Mobile

for these two events results in and economic impact (multiplier effect) of $17,794,634 to $20,427,936

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for the City, $14,359,601 to $16,437,322 for Mobile County, and $8,927,049 to $10,093,202

channeling to the State of Alabama.

Fiscal Impact

As a matter of course any study seeking economic impact information it is important to note

the differences between economic impact and economic benefit information. Whereas economic

benefit is comprised of the direct spending by visitors and organizations and subsequent rounds of re-

spending of initial dollars through a multiplier effect; economic impact would take the economic

benefit result a step further by subtracting the public dollars invested toward an event. In this regard

and on its most elementary level incremental tax is compared to the amount of tax payer money given

to an event (Mobile City $243,000 and Mobile County $200,000); any additional money after this is

considered economic impact.

Incremental tax impact is the impact from taxes collected as a result of an event’s operations

and non-local visitors incremental spending. Typically, purchases made for certain goods and

services carry additional tax creating more revenue added on to the sale of goods and services. For

example in Mobile hotel accommodations levy a 7% city, 4% state, and 3% county bed tax which is

higher than the 2013 public sales tax on retail purchases (5% city, 4% state, 1% county). The tax on

gasoline purchases and alcohol sales made in Mobile is also higher in comparison to general retail

purchases. In the collection of survey data at the Music Festival and Road Race for this report,

amounts BayFest economic tourist spent on gasoline purchases and adult beverage sales were not

specifically itemized as a separate spending response category, but part of more comprehensive Local

Transportation and Food & Beverage cluster. Therefore, efforts to account for and apply varying tax

values of event related expenditures herein were subsequently based on the type of tourism spending

categories created in the questionnaires as shown in Table 17.

77

Table 17- Bayfest Visitor and Organizational Spending Generated Tax 2013

Expenditure Optimistic Conservative Tickets Registration $ 1,420,691.70 $ 1,420,691.70 City 5% $ 71,034.59 $ 71,034.59 County 1% $ 14,206.92 $ 14,206.92 State 4% $ 56,827.67 $ 56,827.67

Lodging $ 5,564,225.05 $ 4,789,795.88 City 7% $ 389,495.75 $ 335,285.71 County 3% $ 166,926.75 $ 143,693.88 State 4% $ 222,569.00 $ 191,591.84

Food & Bev $ 2,476,453.78 $ 2,143,716.72 City 5% $ 123,822.69 $ 107,185.84 County 1% $ 24,764.54 $ 21,437.17 State 4% $ 99,058.15 $ 85,748.67

Entertainment $ 1,599,131.52 $ 1,374,013.73 City 5% $ 79,956.58 $ 68,700.69 County 1% $ 15,991.32 $ 13,740.14 State 4% $ 63,965.26 $ 54,960.55

Retail $ 1,474,910.90 $ 1,265,634.95 City 5% $ 73,745.55 $ 63,281.75 County 1% $ 14,749.11 $ 12,656.35 State 4% $ 58,996.44 $ 50,625.40

Auto & Gas $ 1,381,994.97 $ 1,191,834.46 City 5% $ 69,099.75 $ 59,591.72 County 1% $ 13,819.95 $ 11,918.34 State 4% $ 55,279.80 $ 47,673.38

Local Transport $ 545,272.87 $ 473,838.44 City 5% $ 27,263.64 $ 23,691.92 County 1% $ 5,452.73 $ 4,738.38 State 4% $ 21,810.91 $ 18,953.54

Transportation $ 871,293.79 $ 796,878.07 City 5% $ 43,564.69 $ 39,843.90 County 1% $ 8,712.94 $ 7,968.78 State 4% $ 34,851.75 $ 31,875.12

Other $ 5,093,961.37 $ 4,338,229.67 City 5% $ 254,698.07 $ 216,911.48 County 1% $ 50,939.61 $ 43,382.30 State 4% $ 203,758.45 $ 173,529.19 Organization Spend

BayFest County Tax $ 7,664.74 $ 7,664.74 BayFest State Tax $ 30,658.96 $ 30,658.96

Total City Tax $ 1,132,681.30 $ 985,527.60

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Total County Tax $ 323,228.60 $ 281,406.99 State Tax Impact $ 847,776.40 $ 742,444.30

Total Direct Impact $ 2,303,686.30 $ 2,009,378.90

City-Lodging Tax 7%, Retail Tax 4%; County- Lodging Tax 3%, Retail Tax 1%, State- Lodging Tax 4%, Retail Tax 4%.

Tax Multiplier

A traditional government multiplier (balanced-budget multipliers equals 1) is used when

government expenditures are financed by resident tax dollars. Yet when applied to BayFest pecuniary

proceeds in the form of tax revenues are paid by non-local tourists, fully subjecting goods and service

spending to the multiplier effect. A government multiplier of 1.5 is used for assessment based on a

weighted multiplier of the spending categories subject to government expenditures having a higher

level of leaking out during secondary rounds of spending as a result of purchases being spread

throughout the state.

Since the City of Mobile allocated $243,000 and Mobile County $200,000 of taxpayer money

to subsidize BayFest these amounts are subtracted from the tax revenue generated from the monetary

impact analyses. Therefore, the tax generated from the purchase of goods and services and applying

the multiplier effect, government dollars received are subtracted to arrive at the true economic impact

of BayFest tax generation. Table 18 provides the true tax impact of the BayFest in 2013.

Table 18- True Economic Tax Impact of Bayfest 2013

Tax Category Optimistic Conservative ROI

Optimistic ROI

Conservative

Total City Tax $1,132,681.00 $985,527.00 366% 306% Multiplier $1,699,021.50 $1,478,290.50

(-)City Subsidization $243,000.00 $243,000.00 City Tax Impact $1,456,021.50 $1,235,290.50

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Total County Tax $323,228.60 $281,406.99 62% 41% Multiplier $484,842.90 $422,110.49

(-)County Subsidization $200,000.00 $200,000.00 County Tax Impact $284,842.90 $222,110.49

Total State Tax $847,776.40 $742,444.30 Multiplier $1,271,664.60 $1,113,666.46 State Tax Impact $1,271,664.60 $1,113,666.46

Total Tax Impact $3,012,529.00 $2,571,067.45

__________________________________________________________________________ 1.5 Tax Multiplier City Tax, County Tax, Grant Subsidizations

The total city tax impact results in $985,527 to $1,132,681 and the reciprocal value from

public city funds allocated to BayFest results in a 366% [= ($243,000.00 city subsidization-

$1,132,681 city tax generated) /$243,000 city subsidization] Return on Investment (ROI) to Mobile

city taxpayers (optimistic) and a 306% return on investment from a conservative viewpoint. This

would be the yield resulting in BayFest direct spending sales tax in comparison to the initial outlay of

public funds allocated to BayFest. Conservative and optimistic estimates for total tax impacts at the

other geographic levels and accounting for appropriations returns between $281,406 (41% ROI) to

$323,228 (62% ROI) for the County and $742,444 to $847,776 for the State since the State did not

subsidize BayFest in 2013.

Mobile Resident Impact

As previously mention in the earlier sections of this report economic impact is the result of

outside tourists dollars flowing to an area and locals should be excluded from the assessment since

they are dollars that would have already been spent in the area. In other words money spent on

attending a movie could easily be spent on going to a sporting event and is simply a substitution of

80

leisure dollars spent by locals or “switched spending”. However, when resident leisure dollars are to

leave an area and a local event retains the individuals, their dollars that otherwise would be spent

elsewhere, ceteris paribus, impacts the local economic flow of money. These local citizens or “stay-

cationers” would be vacationing at home which is a missing source of economic impact when

assessing community events.

Cobb and Olberding (2007) in examining the vacationing at home concept with a city hosted

marathon reported a large number of local runners used their home-city marathon as a substitute for

participating in a race out of town. Results showed a 20% higher total event economic impact when

accounting for these citizens. In the case of local citizens that attended the 2013 BayFest music

festival or 30% of the sample population, the question of whether hosting BayFest in Mobile kept

local citizens and their discretionary money at home is presented. In order to answer this question one

has to determine the propensity of Mobilians to travel elsewhere to attend a music concert at another

location in the same year. Based upon the Mobile resident stratum from the Attendee Survey when

these subjects were asked, “If BayFest were not held would you visit another town to attend a concert

this year?”; Seventy percent responded with a “Yes” answer as shown in Table 19. Of the estimated

30% locals who attended BayFest or 67,368 (optimistic) and 57,199 (conservative) and applying the

69.3% “yes” response frequency results in 46,686 (optimistic) and 39,638 (conservative) Mobilians

who would have left the city at some point to travel and attend another concert elsewhere.

Table 19 – City of Mobile Resident Propensity to Attend Concert Elsewhere

Sample Frequency

Sample Percent

Population Conservative

Population Optimistic

Valid Yes 220 69.3 39,638 46,686 No 98 30.7 17,561 20,682 Total 318 100.0 57,199 67,368

N= 1,047, Local Visitors n=318

81

Based on the group tourism expenditures of admissions ($52.80), lodging ($11.84), food and

beverage ($41.49), entertainment ($48.90), retail ($61.98), auto/gas ($20.04), local transportation

($11.60), transportation ($20.89), and other items ($129.00) accounting for party size (2.75) returns a

per person spend of $85.42 for Mobile residents that attended BayFest. Certainly, the per-person

spend amounts would be higher and predicated upon the distance traveled to attend a replacement

concert in another city, however only the tangible evidence (Mobile resident spend) collected at

BayFest 2013 may be used to determine travel dollar imports. Thus, one may offer an optimistic

estimate of $1,329,277 that remains in the local economy instead of being spent someplace else if

Mobilians were to leave and attend a concert in another city (opportunity cost). An additional indirect

impact of $1,003,870 (1.7552 multiplier) creates a total resident impact of $2,333,148 from locals

who stayed and attended BayFest rather than leaving the area to attend a concert. Using a

conservative approach returns $1,128,545 staying local and an indirect amount of $852,277 creating a

total resident impact of $1,980,822.

Applying the same set of assumptions for home vacationers in Mobile County (n=456) and

based upon the 70% frequency response of “yes” (n=318) when survey respondents were asked

whether they would have attended a concert in another town if BayFest were not held, $2,399,509 to

$3,038,065 in direct spending results based upon a $136.79 per person spend. Applying the 1.7552

multiplier returns $4,211,619 to $5,332,412 in economic impact. Since Alabama resident survey

respondents may have attended another concert in a town within the State such as Birmingham the

‘home vacationer” impact would not fully apply. Some Alabama residents could possible go outside

the State to attend a concert if BayFest were not held and therefore would be considered a part of

economic effect.

82

Sponsorship Impact

Another benefit BayFest provides is an opportunity for businesses to market their company

through the event to reach consumers, increase sales, and build community relations at a cost

effective price. Not only do event administrators spend money on local goods but event sponsors

inject incremental money into a region as well from their sponsorship payments which help pay for

various costs to run events. Therefore, organizational spending along with the money received from

event sponsors who pay for marketing rights to an event are both considered incremental revenue.

Similar to BayFest paying for local goods and services from its operating budget, sponsorship

revenue is use to defray the costs associated with various organizational functions. For example

different companies pay for the rights to be named a stage sponsor and the dollars are used to pay for

certain operational costs such as tent rental or catering services. In total $3,238,859 cash and in-kind

was received to defray the costs associated with the BayFest activities. To equate the economic

repercussions of sponsorship money entering the impact regions used in this report sponsorship

revenue originating from a company or government entity located in the impact zone must be filtered

out. Therefore, in consideration of the itemization of all BayFest sponsorship agreements and

subsequent revenues that flowed to the Mobile economy $328,000 would be considered as new

money and economic benefit spending.

Total Economic Impact

Table 20 below includes the True Economic Visitor Spending, BayFest Organizational

Spending, Tax Revenue created from the purchases of goods and services, Home-Vacationer leakage,

and Sponsorship economic impact for the City of Mobile from BayFest 2011 to 2013.

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Table 20- BayFest Total Economic Impact City of Mobile 2011, 2012, 2013

2013 Impact Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $11,638,523 $8,789,413 $20,427,936 $10,138,237 $7,656,397 $17,794,634

BF $766,474 $578,841 $1,345,315 $766,474 $578,841 $1,345,315

Tax $1,132,681 $566,341 $1,699,022 $985,527 $492,764 $1,478,291

Residents $1,329,277 $1,003,870 $2,333,147 $1,128,545 $852,277 $1,980,822

Sponsors $328,000 $247,706 $575,706 $328,000 $247,706 $575,706 Total $15,194,955 $11,186,170 $26,381,125 $13,346,783 $9,827,984 $23,174,767

2012 Impact Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $14,301,594 $10,800,564 $25,102,157 $12,501,612 $9,441,217 $21,942,829

BF $732,825 $553,429 $1,286,254 $732,825 $553,429 $1,286,254

Tax $681,411 $340,705 $1,022,116 $594,611 $297,305 $891,916

Residents $1,241,234 $553,429 $2,178,614 $1,053,878 $553,429 $1,849,767

Sponsors $338,000 $255,258 $593,258 $338,000 $255,258 $593,258 Total $17,295,063 $12,503,385 $30,182,399 $15,220,926 $11,100,639 $26,564,025

2011 Impact Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $11,301,206 $8,534,671 $19,835,877 $9,502,851 $7,176,553 $16,679,404

BF $678,727 $512,575 $1,191,302 $678,727 $512,575 $1,191,302

Tax $528,330 $264,165 $792,495 $443,406 $221,703 $665,109

Residents $2,321,872 $1,753,478 $4,075,350 $1,886,554 $1,424,726 $3,311,280 Sponsors $386,000 $291,507 $677,507 $386,000 $291,507 $677,507 Total $15,216,135 $11,356,396 $26,572,531 $12,897,538 $9,627,063 $22,524,601

______________________________________________________________________ RIMS II Multiplier 1.7552, *1.5 Tax Multiplier

84

Table 21 provides the total economic impact for Mobile County and Table 22 State of Alabama from

2011-2013.

Table 21- BayFest Economic Impact to Mobile County 2011, 2012, 2013

County 2012

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $9,364,928 $7,072,394 $16,437,322 $8,181,176 $6,178,424 $14,359,600

BayFest $774,139 $584,630 $1,358,769 $774,139 $584,630 $1,358,769

Tax $323,229 $161,615 $484,844 $281,407 $140,704 $422,111

Resident $3,038,065 $2,294,347 $5,332,412 $2,399,509 $1,812,109 $4,211,618

Sponsors $328,000 $247,706 $575,706 $328,000 $247,706 $575,706

Total $13,828,361 $10,360,690 $24,189,051 $11,964,231 $8,963,572 $20,927,803

County 2012

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $9,203,125 $6,950,200 $16,153,325 $7,808,314 $5,896,839 $13,705,153

BayFest $776,794 $586,635 $1,363,429 $776,794 $586,635 $1,363,429

Tax $223,152 $111,576 $334,728 $195,285 $97,643 $292,928

Resident $3,184,587 $2,405,000 $5,589,587 $2,703,895 $2,041,982 $4,745,877

Sponsors $338,000 $255,258 $593,258 $338,000 $255,258 $593,258

Total $13,725,658 $10,308,668 $24,034,326 $11,822,288 $8,878,355 $20,700,643

County 2011

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $9,002,419 $6,798,627 $15,801,046 $7,607,608 $5,745,266 $13,352,874

85

BayFest $726,237 $548,454 $1,274,691 $726,237 $548,454 $1,274,691

Tax $175,233 $87,616 $262,849 $148,589 $74,294 $222,883

Resident $3,868,744 $2,921,675 $6,790,419 $3,140,712 $2,371,866 $5,512,578

Sponsors $366,000 $276,403 $642,403 $366,000 $276,403 $642,403

Total $14,138,633 $10,632,776 $24,771,408 $11,989,146 $9,016,283 $21,005,429

RIMS II Multiplier 1.7552, *1.5 Tax Multiplier

Table 22- BayFest Economic Impact to Alabama 2011, 2012, 2013

State 2013

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $5,750,457 $4,342,745 $10,093,202 $5,086,058 $3,840,991 $8,927,049

BayFest $797,133 $601,995 $1,399,128 $797,133 $601,995 $1,399,128

Tax $847,776 $423,888 $1,271,664 $742,441 $371,221 $1,113,662

Resident n/a n/a n/a n/a n/a n/a

Sponsors $189,000 $142,733 $331,733 $189,000 $142,733 $331,733

Total $7,584,366 $5,511,361 $13,095,727 $6,814,632 $4,956,939 $11,771,571

State 2012

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $8,035,366 $6,068,308 $14,103,674 $7,110,979 $5,370,211 $12,481,190

BayFest $791,451 $597,704 $1,389,155 $791,451 $597,704 $1,389,155

Tax $601,016 $300,508 $901,524 $529,017 $264,509 $793,526

Resident n/a n/a n/a n/a n/a n/a

Sponsors $189,000 $142,733 $331,733 $189,000 $142,733 $331,733

Total $9,616,833 $7,109,253 $16,726,086 $8,620,447 $6,375,156 $14,995,603

86

State 2011

Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $7,121,501 $5,378,158 $12,499,659 $6,054,201 $4,572,133 $10,626,334

BayFest $739,812 $558,706 $1,298,518 $739,812 $558,706 $1,298,518

Tax $484,293 $242,147 $726,440 $412,359 $206,180 $618,539

Resident $292,866 $221,172 $514,038 $237,752 $179,550 $417,302

Sponsors $189,000 $142,733 $331,733 $189,000 $142,733 $331,733

Total $8,827,472 $6,542,915 $15,370,388 $7,633,124 $5,659,301 $13,292,425

RIMS II Multiplier 1.7552, *1.5 Tax Multiplier

Employment Impact

According to the Economic Impact Alabama Travel Industry Report 2013 produced by the

Alabama Bureau of Tourism and Travel for every $99,643 of travel-related expenditures it creates the

equivalent of one direct job. For every two direct jobs created, the Alabama economy indirectly

creates one additional job. According to this report when combining the total direct spending of

BayFest economic tourists $11,638,523 and BayFest local operational expenditures $766,474 close to

124 jobs are created from the $12,404,997 from BayFest related activities and tourism dollars. When

considering the 2013 average annual wage for a MSA worker in Mobile $40,230 (United States

Department of Labor-Bureau of Labor Statistics) $4,988,520 (=$40,230 average mobile salary x 124

jobs) in earnings impact results.

Although the estimated jobs created by BayFest are noteworthy, debate surfaces as to whether

or not the extent these impacts should be included in appraising BayFest economic value.

Oppositional perspectives contest the inclusion of earnings impact since Mobile businesses are

unlikely to hire new full-time workers in response to the additional demands created by the festival

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and are more likely to give existing employees additional hours or hire short-term employees to meet

temporary peak demands, whereas, other economic impact constituents purport the use of induced

impacts along with the direct and indirect applications. Economic input-output figures when it comes

to assessing the employment impact does not distinguish a full-time employee from a part-time

employee therefore the employment impact in this report adopts the same characteristics. Of

additional note BayFest does have one full-time worker paid $65,547 from its operating budget

(2013) with other individuals serving in a voluntary role for the non-profit organization and disbursed

roughly $8,000 for local talent performing at BayFest. Typically, BayFest spends roughly $20,000

for all local artists, but since some stage acts were cancelled due to Tropical Storm Karen a smaller

amount of wages were paid to area performers in 2013.

Tourism Destination Impact

Market research is necessary to focus on such things as market segmentation, the forecasting

of tourism demand, visitor satisfaction ratings, the effectiveness of advertising, and the development

of new products and services. Research suggests that the popularity of a local festival as a tourism

promotional tool include: 1) festivals increase the demand for local tourism; 2) events help create the

image of a place or contribute to the exposure of a location trying to get on and stay on the tourism

map; 3) the strategic placement of a festival in the local tourism calendar can help extend the tourism

season (Felsenstein & Fletcher, 2003). In the case of extending the tourism season BayFest clearly

meets this element since the event is held outside the months of Mobile’s main tourism season. Since

its inception 19 years ago BayFest has developed into a powerful tool to attract over 200,000 tourists

annually during the regions off season and creates an image and awareness for the Mobile and

Alabama Gulf Coast area.

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Efforts to determine the increased local demand for tourism to Mobile as a result of BayFest is

more intricate, but can be gauged through a number of assessments. One formidable way is to

determine whether the specific purpose of a trip to Mobile by a tourist is to attend a special event. As

previously mentioned in the calculations of true economic tourists 70% of the survey sample returned

a “yes” response to the question of BayFest being the main reason they were in Mobile. If factoring

up to the BayFest attendance population, results in an optimistic estimate of 157,500 and a

conservative estimate of 133,700 people who visited Mobile specifically to attend BayFest. This

evidence suggests BayFest is as a driving tourism mechanism to the City of Mobile. Of this attendee

sample strata who were specifically in Mobile to attend BayFest 85% responded with a “strong

interest” to return to Mobile because of being at the music festival and 12.5% were “undecided” when

asked about their repeat trip propensity. A similar response frequency was found for BayFest

musicians. When musicians were asked on the Business Traveler Survey their future interest to

perform again at Bayfest 80% (79.3%) responded with a “definitely yes” choice and 13% recorded

“probably yes”.

A second question to ask pertaining to the potential for BayFest to drive tourism in Mobile is

the number of BayFest events attended. Repeat attendance at BayFest stretched across multiple years

would allow one to rationalize BayFest is a legitimate force annually, drawing incremental tourists to

Mobile every year. The average number of years BayFest spectators have attended the music festival

was 4 (M=4.06) years with 66% being repeat customers. Based on the number of responses from the

Business Travel Survey the average number of years business travelers have attended BayFest was 3

years (M=3.35) and roughly 56% of musicians, vendors, sponsors, and other workers have returned to

the City of Mobile and worked at BayFest more than one time. If 56% of the BayFest business

travelers were to return for the event again in the future equates to over a half a million dollars in

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repeat tourism $518,900 (= $926,607 direct spending x 56%) annually generated from business

oriented travelers who come back to Mobile to be at BayFest. The potential revenue generation based

on repeat trip survey response frequencies for BayFest attendees amounts to over $7 million

(=10,679,155 direct spend x 66%) in future travel revenue to the City if BayFest continues to be held

in Mobile. A third proponent used to determine or estimate the potential tourism repercussions of

BayFest is to evaluate its media impact and marketing cost equivalency explained in the next section.

Media and Marketing Impacts

Adding to the tourism spectrum are the media communication equivalencies and public

relation messages Mobile receives for the different mediums used to promote the event. The value of

BayFest media coverage on television, radio, print, and internet throughout the Southeast is valued at

an estimated $1.7 million (BayFest, 2013). Previous research from United States Convention &

Visitors Bureau data often list a 30% bounce back from the marketing media channels used to

showcase a destination. If applied to the BayFest media cost equivalencies close to $510,000 results

in additional spending by economic tourists who view promotional information about BayFest and as

result travel to Mobile in the future for a visit. It should be noted that event marketing exposure and

its potential to draw future tourists was not part of this report. Efforts to coordinate with local tourism

and travel organizations to collect data from those visiting the City of Mobile and the source

(BayFest) initiating the interest to visit the Port City should be considered.

As previously mentioned BayFest utilizes various marketing strategies such as sponsorships to

override its operational costs for the event. Corporate sponsorship provides companies an opportunity

to target market match its business customers with those associated with the event and extend and

enhance its brand image to boost sales. This form of sponsorship promotion serves as a cost effective

means for companies to market their organization or business rather than pay to market their products

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and services through traditional forms of direct marketing techniques such as advertising. BayFest

sponsors may also provide in-kind sponsorships to override expenses for artist and staff hotel lodging,

food, dressing rooms, marketing expenses, and a number of other professional services.

Constructively, Mobile companies with limited marketing dollars are still able to partake in

sponsorship opportunities with BayFest via in-kind service when marketing budgets are limited.

Social and Cultural Impacts

Efforts to measure the social and cultural impacts of an event on a local community involve

certain arbitrariness. Community residents have varied quality of life standards, which complicates

estimating the value of an events social and cultural attributes. Nonetheless, efforts should be made to

recognize BayFest for its social and cultural impacts such as: increases or renewed feelings of civic

pride from successfully staging an event; strengthening existing bonds and building new ones within

a community by promoting awareness and understanding of cultural diversity; urban transformation

and renewal; and increases in community participation. When compared to other community events

that are based on a specific theme- such as a sporting events- from a merely social perspective,

BayFest with its various musical artists has the potential to stretch across a wide spectrum of musical

genre and has more latitude to meet the individual leisure/entertainment needs of Mobile residents.

Cost Benefit Analysis

Many community events incur a financial loss to organizers, but produce net benefits to a

community. Efforts made by local governments and the degree of support warranted varies according

to the perceived benefits and costs associated with the event (Dwyer, Mellor, Mistilis, & Mules,

2000). One way to judge whether an event is worthwhile in overall terms is to conduct a cost benefit

analysis. The basis of an event cost benefit analysis is to express, as far as possible, all the benefits

resulting to an impact region and compare them to all the costs in hosting an event in a community.

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This approach provides government officials an uncomplicated way to distinguish which policy

decisions generate the highest net benefit to their communities both monetary and non-monetary

values.

In many instances, promoting a local festival means conflicting effects across different areas:

a festival may generate economic benefits, enhance local quality of life, and create community social

solidarity while simultaneously encasing environmental damages, increase traffic congestion, and

perhaps adding to law enforcement costs (Felsenstein & Fliescher, 2003). Therefore, efforts to

estimate public income change and public costs attributable to a festival are warranted especially

when events are subsidized by public funds from local or regional governments. People want to

know how their tax revenues or government monies are allocated and what the returns on those

allocation of funds are (Hara, 2009).

One vantage point to assess the benefits and costs associated with Bayfest is to review the tax

implications. Subsidies can, in general, be justified either on efficiency or distributive grounds. For

example, a subsidy could be justified if the unsubsidized market would supply too little of the good.

The subsidy would induce greater provision resulting in economic, social/cultural, and environment

benefits with the hope of becoming sustainable (Coates & Humphreys, 2008). Alternatively, subsidies

could be justified as a means of redistribution. For example, public education is paid for out of taxes,

with wealthier individuals paying more in taxes than the cost of the services they receive and poorer

individuals paying less than the full cost of the education. In the context of community event planning

when events are left to the free market some community residents may not be able to participate

because of high admission cost. Therefore, city planners have a responsibility toward social equity for

all residents in a community and may have to financial back other event options offering low-cost

tickets so needy residents may attend. Ostensibly, for-profit events backed by government monies

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may not be able to provide public good for all so it is often argued not-for-profit events deserve

financial assistance as long as it can be demonstrated.

The BayFest Music Festival, a non-profit organization typically relies on government

subsidization to cover expenses. In 2013 the City of Mobile provided BayFest with $243,000 and the

Mobile County Commission allocated $200,000 to the music festival. Attempts to determine the

positive externalities as a result of grant appropriations to an event like BayFest in comparison to

other local events perpetuate opportunity cost discussions. In particular, distribution of public grant

monies to one organized event over another begets and analysis of what benefits emerge to the area as

a result of providing funds to the grant recipient. Also, if a government supported event provides

public worth over time only further justifies this allocation of tax payer funds.

BayFest Festival Comparative Analyses

Attempts to illustrate the monetary benefits associated with BayFest in comparison to the

dollars provided (government subsidies) becomes an important issue when weighing the overall value

of the festival. Taken a step further a yearly comparisons or longitudinal assessments of community

events provide evidence of economic stability or depreciation of an event and a way to review event

policies and programs. Table 23 compares the impact estimates of the findings from a meta-analysis

conducted on the 2009 BayFest event (Keshock, 2010) and the empirical results of the 2010 BayFest

Music Festival (Keshock, 2011), 2011 Impact of the Bayfest Music Festival (Keshock, 2012), and

BayFest Impact Report (Keshock,2013) to the outcomes of this report completed in the Spring of

2014.

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Table 23- Comparative Analysis of BayFest 2009, 2010, 2011, 2012 and 2013

Public Cost 2009 2010 2011 2012 2013 City Tax $243,000.00 $243,000.00 $243,000.00 $243,000.00 $243,000 County Tax $250,000.00 $212,500.00 $212,500.00 $200,000.00 $200,000 Total Subsidization $493,000.00 $455,500.00 $455,500.00 $443,000.00 $443,000

Public Benefit Visitor Spend Impact $20,567,191.00 $23,875,765.30 $19,835,877.40 $25,102,157.39 $20,427,936

BayFest Spend Impact $853,839.00 $1,220,889.04 $1,191,301.63 $1,286,254.44 $1,345,315 Tax Impact

City $832,734.00 $1,108,986.06 $792,494.93 $1,022,115.93 $1,699,021 County $192,046.00 $311,556.09 $262,848.78 $334,727.00 $484,843 State $703,068.00 $891,142.47 $726,439.88 $901,525.00 $1,271,664

Resident Impact $2,132,216.00 $2,271,706.00 $3,742,465.52 $2,178,613.92 $2,333,147 Media Impact $1,423,682.00 $1,423,682.00 $1,002,945.00 $879,870.00 $1,700,000 In-Kind Impact $2,830,140.00 $3,236,929.00 $3,320,733.00 $3,181,649.00 $3,238,859 Sponsorship Impact $236,750.00 $296,500.00 $415,543.60 $593,257.60 $575,706 Total Benefit $29,771,666.00 $34,637,155.96 $31,290,649.74 $35,480,170.27 $33,076,491.00

True Economic Tourists

220,800 188,450 195,066 156,798 Spend Per Person

$143.37 $137.13 $187.49 $173.93

__________________________________________________________________________

City, County, State Total Economic Impact with Multiplier Adjustment

Also, as previously mentioned in the purpose section of this report, if one were to only

consider frequencies and values interpreted in a single impact report and not compare these finding to

other published impact estimates conducted on other community events in the same city would be

inequitable. For example, reports incorporating different impact multipliers and the recirculation of

direct spend- would violate basic reliability concerns since economic input-output modeling should

be specific to the area of impact. An examination of other local event report estimate derivations

increases the confidence of report conclusions or lack thereof and also allows interested parties to do

an apples-to-apples comparison of event impact between similar events in a host city.

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Since home Convention and Visitor Bureaus, Area Satellite Tourism Organizations, Regional

Tourism Bodies, and For-Profit Research Companies often use an inflated tourism impact multiplier

(2.0-3.0) to arrive at the economic impact of certain local events, a second analysis of the 2013

BayFest economic impact total was calculated for comparative purposes and opportunity cost

considerations in Table 24. Other less rigorous or omitted steps in the calculation of event economic

impact exist and should be scrutinized for their validity, especially when on-site data is not collected

from event visitors to determine tourism spend amounts. For example, The Destination Marketing

Association International (DMAI), uses a formula with the number of participants and estimated

visitors to arrive at the number of room nights per visitor. The number of room nights is then

multiplied by spending per day. Per DMAI, the average expenditure is based on accommodations,

food, retail, fuel and miscellaneous totaling $250 per day. Locally the Mobile Bay Convention and

Visitors Bureau then uses a standard of 2.5 as the number of dollar turns in the economy (indirect

impact) to arrive at estimates of total economic impact. While this approach may add to the

discussion of event worth to a city destination it should be taken with caution. According to

Crompton (1999) survey data is a prerequisite of economic impact assessments to determine the

actual direct spending amounts made by event patrons, how long visitors were in the area, group size

and to depict true economic tourists from time-switchers, casuals, and locals exhibiting displaced

spending.

In an attempt to mitigate disparities of public record concerning the liberal and inappropriate

use and acceptance of reports using a higher economic impact multiplier coefficient Table 25 adopts a

2.50 multiplier albeit tenuous, rather than the 1.7552 RIMS II multiplier used earlier in this report.

Under these assumptions the 2013 BayFest Musical Festival would equate to a total economic impact

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of roughly $33,366,958 to $37,987,388 to the City of Mobile; $29,910,578 to $34,570,903 to Mobile

County; and $17,036,580 to $18,960,915 to the State of Alabama.

Table 25-Total Economic Impact of BayFest 2013 Using Community 2.5 Event Multiplier

2013 City Impact Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $11,638,523 $17,457,785 $29,096,308 $10,138,237 $15,207,356 $25,345,593

BF $766,474 $1,149,711 $1,916,185 $766,474 $1,149,711 $1,916,185

Tax $1,132,681 $1,699,022 $2,831,703 $985,527 $1,478,291 $2,463,818

Residents $1,329,277 $1,993,916 $3,323,193 $1,128,545 $1,692,818 $2,821,363

Sponsors $328,000 $492,000 $820,000 $328,000 $492,000 $820,000 Total $15,194,955 $22,792,433 $37,987,388 $13,346,783 $20,020,175 $33,366,958

2013 County Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $9,364,928 $14,047,392 $23,412,320 $8,181,176 $12,271,764 $20,452,940

BayFest $774,139 $1,161,209 $1,935,348 $774,139 $1,161,209 $1,935,348

Tax $323,229 $484,844 $808,073 $281,407 $422,111 $703,518

Resident $3,038,065 $4,557,098 $7,595,163 $2,399,509 $3,599,264 $5,998,773

Sponsors $328,000 $492,000 $820,000 $328,000 $492,000 $820,000 Total $13,828,361 $20,742,542 $34,570,903 $11,964,231 $17,946,347 $29,910,578

2013 State Impact Type Direct Impact Indirect Impact Total Impact Direct Impact Indirect Impact Total Impact

Optimistic Optimistic Optimistic Conservative Conservative Conservative

Visitors $5,750,457 $8,625,686 $14,376,143 $5,086,058 $7,629,087 $12,715,145

BayFest $797,133 $1,195,700 $1,992,833 $797,133 $1,195,700 $1,992,833

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Tax $847,776 $1,271,664 $2,119,440 $742,441 $1,113,662 $1,856,103

Resident n/a n/a n/a n/a n/a n/a

Sponsors $189,000 $283,500 $472,500 $189,000 $283,500 $472,500 Total $7,584,366 $11,376,549 $18,960,915 $6,814,632 $10,221,948 $17,036,580

2.5 Multiplier

The value of event worth may be scientific or intuitive half-baked guesses applying cavalier

assumptions and the use of borrowed monetary derivations to arrive at event worth. When it comes to

the fiscal impact or return on investment of government subsidizations of community events careful

attention to the sources used for economic impact estimation. Scrutiny of event impact report

procedures and the use of ill-advised denominators across the board to all events allows interested

parties to do an apples-to-apples comparison of events hosted in an impact region so that subsidies are

granted judiciously.

While it is not the intention of this report author to impugn event organizer’s event impact

estimates, the general public does have a right to know how and to what extent economic impact

figures were calculated and the level of credibility that should be given toward the results. For

example, one Mobile sport event study claimed $60 million worth of economic impact to the region

based upon 26,000 sport participants playing in various tournaments. Another Gulf Coast region

leisure event estimated $35 million in economic impact from roughly 30,000 attendees. To support

these estimates evidence of on-site hard data collection administered to event visitors is imperative to

peg the true economic tourists, determine actual per person spend on tourism trade goods, number of

days and nights visitors were in the impact region, and an assortment of other related variables is

necessary; otherwise, questions of authenticity abound.

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Conclusion

No single model or report can provide all the attributes realized from a community event, but

merely postulate information about the likely outcomes an event will have on its host community.

Festivals are organized for a variety of reasons to include: enhancing or preserving local culture and

history, providing local entertainment and leisure opportunities, and enhancing the local tourism

industry (Long & Perdue, 1990). Typically, impacts of music events on society fall into three

principal areas: the “social/cultural”, the “economic” and the “environmental” otherwise known as

the Triple Bottom Line (TBL) approach. The focus of music festival research is often times directed

to the economic impact of the event since festivals are a means of attracting nonresidents to the host

community in the hope that their spending will make a significant contribution to the local economy

(Goeldner & Ritchie, 2009).

Economic benefits tell only part of the story of the total impact of the BayFest Music Festival,

The Impact of BayFest 2013 report findings should not be used in isolation as a sole basis for policy

decision making, but rather to put in perspective the return on investment BayFest provides to Mobile

citizens and various groups within the impact area and concomitant stakeholders. It would be

presumptuous, and beyond the scope of this research, to attempt to measure the holistic impact of

BayFest to Mobile, since the topic of music from a cultural perspective is often deeply rooted within

the fabric of society. However, when government subsidizations are allocated to BayFest, city tax

appropriations earmarked to this annually occurring event can be justified solely on a financial basis

as evidenced in this report by the 366% ROI. Furthermore, despite the effects of Tropical Storm

Karen during BayFest 2013 weekend, where attendance dropped from the previous year- thus

reducing the amount of visitor direct spending in Mobile- it is the report author’s perception that the

BayFest Music Festival is a signature event. Not only has BayFest continued to provide a wide

98

variety of music opportunities to attendees at an affordable cost; but has evolved to adapt over a

period of time to create participant and spectator loyalty; and has created a pattern of seasonality to

instill the occurrence of an event taking place at the same time each year and the potential for repeat

customers to the region.

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