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Sports Events: Opportunities and Impacts Mara Manente (Board of Master in Economics and Management of Tourism, Ca' Foscari)

mara.manente03@unive.it

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Agenda ❖ Sports Events: the different perspectives ❖ Identifying the impacts ❖ The importance of measuring and monitor ❖ Torino 2006 ❖ Lessons from the economic side ❖ Factors for success

mara.manente03@unive.it

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Big Sports Events in International Literature

THE THREE DIMENSIONS event as: -competition -business -show

THE THREE «DIAMOND TIPS» • • •

economic growth legacy of investment in infrastructure brand and promotion of the image

EVENT AS D4D Tool to be used in the process of development for destinations mara.manente03@unive.it

Sustainability conditions to be guaranteed @manente03


The different perspectives Participants and Attendees

EVENT MANAGEMENT (production process) Primary Event Stakeholders (partners/sponsors, suppliers)

EVENT Multidisciplinary dimension

Secondary Event Stakeholders (Local institutions - Local economic and production system - Media - Host Community)

IMPACT -Economic -Socio-cultural -Environmental -Marketing/tourism -Politics

- Ex ante - In itinere - Ex post mara.manente03@unive.it

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Identifying the impacts (1) Impact

Positive effect

Negative effect

Economic (input-output analysis, costbenefit, CGE, gravity equation model )

•Attracting financial, technical and project resources •Creation/strengthening of trade relations •Added value and employment activated by expenditure levels (participants and process) and ex-post use of infrastructure

•Price increase during the event •Real estate speculation •Unfair sharing of costs and benefits •Leackage effects

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Identifying the impacts (2)

Impact

Positive effect

Negative effect

Socio-cultural

•Increasing interest and participation of residents in activities associated with the event •Use/Improvement of Host Community Organizational and Implementation Skills •Growth of social pride and destination identity •Social interaction

•Defensive attitudes on the part of residents •Hostility between visitors and residents (possible overcrowding effect)

Environmental

•Structure and Infrastructure upgrading •New infrastructure

•Environmental damage •Overcrowding •Risk of abandonment of infrastructure

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Identifying the impacts (3) ... Marketing and Identity .... Impact

Positive effect

Negative effect

Tourism / Destination marketing

•Increase in the notoriety of the area as a tourist destination •Increasing information on investment potential and area competitiveness conditions •Accelerating the process of building/improving/relaunching the image and brand

•Negative image due to inefficiencies or inadequate infrastructure •Negative reactions of local productive activities due to the possible entry of new competitors

(Estimated value of media/social appearances, Anholt Brand Indexes)

Politics

•Dissemination of government / host community values •Distortion of the actual nature of the •Greater recognition and consciousness of the area and event its values •Pursuit of partisan interests in the name of local development

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… the importance of measuring and monitor … (1) Impact

Valuation methodologies

Main indicators Var. % arrivals and nights in the destination Occupancy rate of accommodation Var. % accommodation establishments and beds

Economic (including tourist impacts)

•Input-output analysis •CGE models ( Computable General Equilibrium) •Cost-benefit analysis •Gravity equation model •Etc.

Var. % n. tourism companies and other sectors related to the event N. jobs created in tourism and other sectors % Private investment on total Hard investments (works and infrastructure) / Soft investments (organisation, marketing) Direct visitor expenditure and added value Direct expenditure for each public € invested Direct expenditure per € invested

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… the importance to measure and monitor … (2) Impact

Valuation methodologies

Main indicators Participation rate of residents in the event (resident visitors / tot. population) % non-local visitors (non-local visitors / tot. visitors)

Socio-cultural

• Surveys among stakeholders • Etc.

Satisfaction rate of residents and other stakeholders Var. % n. associations, groups, networks between local stakeholders Pressure of the visitors of the event (n. visitors per inhabitant) Adherence to environmental certifications

Environmental

• Environmental impact assessment

N. buildings, infrastructure, etc. built for the event and no longer reused Concentration of visitors to the event (n. visitors to Km²)

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… the importance to measure and monitor … (3) Impact

Valuation methodologies

Main indicators

% residents in the country or abroad who are aware of the event

Destination marketing

• Estimated value of media/social appearences • Anholt Brand Indexes and similar • Conversion studies • Other ad hoc surveys among visitors and potential tourists • Etc.

% local stakeholders who have a positive image of the destination (internal image to be checked before and after the event) % visitors and potential tourists who have a positive image of the destination (external image to be checked before and after the event) Destination position in the City Brand Index rankings (before and after the event)

Politics

• Surveys among local stakeholders • Etc.

% local residents and stakeholders who feel more proud to live in the destination, thanks to the event.

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Torino 2006 Indicators of economic impact

The impact analyses estimate an added value of EUR 13 billion for Piedmont and about 17 billion for Italy in the period 20052009 deriving from the OlympicGames.

They also estimate an average annual contribution of about 1 percentage point to Italian GDP and 3 percentage points to regional GDP between 2005 and 2009. Source: CISET calculations from published official reports by the organising body and direct interviews

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Torino 2006 Other economic

Socio-cultural

Environmental

Marketing

Politics

N. Jobs created in tourism and other sectors (2005-2009) in Piedmont

54,000

No. of volunteers

20,000

Satisfaction rate of residents and other stakeholders

98%

environmental certifications adopted

ISO

N. Buildings/ infrastructure built for event and no longer reused

Several facilities no longer in use

% visitors for which the event exceeded expectations

78%

% local stakeholders who have an image positive of the destination

99%

% visitors who would come back to Turin

82%

% residents according to which the event contributed positively to the city

96%

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More than other Winter Olympics. Volunteers from Piedmont, Italy and 55 other countries

It was 81% before the event N.B. Only available indicators included Source: CISET processing from official reports published by the organizing body and direct interviews

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Lessons from the economic side

The multiplier effect

• Each € invested in renovations and construction of new infrastructure/facilities ("hard" investments) mobilizes about € 1.4 in the economic system, able to contribute to the increase in GDP by a few percentage points .

The leakage effect

• The resources activated by the hard investment spread in a very wide territory: extra-regional and even national. • Only the effect of visitor spending remains more localized.

New services for the community

• The event is an opportunity to attract investment, to build/complete infrastructure and services for the community (e.g. mobility network, road links, etc.).

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Lessons from the economic side

• Demand Crowding out effect": potential visitors might give up the visit due to factors such as congestion risk - rising prices, etc.

General overestimate of the number of visitors especially overnight stays • Possible "Substitution effect" on purchased goods and services: favouring some purchases at the expense of others

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How to get more from visitors? Some considerations on direct expenditure of visitors: • The direct economic impact varies depending on the visitors origin and their willingness to spend in the territory • Distinguish between visitors to the event and those who actually bear additional expenses for the economic system • Successful events are able to encourage participants and visitors not only to enjoy the services on site, but also to overnight in the area for several days, generating additional direct expenditure and added value. • In a long-term perspective, those events that manage to be a «reason for visiting» the destination and a «reason to come back in the future» are winning.

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Conclusions: Factors for Success

Start a promotion plan and a communication campaign well before the event

Public-private synergy > sponsors and private partners

Citizens are the first ambassadors of the destination

Integrated tourism offer and structured local economic system

Give "contents to containers"

Event as a driver and accelerator in a development strategy covering pre and post

EVENT OF SUCCESS

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Management of the legacy of the event and of the infrastructure in the post

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Profile for Center for Advanced Studies - Eurac Research

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