The Valley plays host to a multitude of events and entertainers, drawing crowds of locals and visitors alike: car enthusiasts, comic-con fans, baseball spectators, golf connoisseurs, runners and football devotees making the trip to support their home teams.
These happenings play a positive role on the Valley’s economy, providing business to the Phoenix Metropolitan area. Partnering with local businesses, event companies create a memorable experience for attendees to make sure that people keep coming back. And crowds flock to businesses in the event’s vicinity, staying at hotels and dining at local eateries.
From the Waste Management Phoenix Open to Phoenix Comicon, crowds of all sorts enjoy the Valley of the Sun throughout the year.
Impact on the Valley
The influx of money into the local economy that an event brings is one beneficial economic impact, and Anthony Evans, senior research fellow at the L. William Seidman Institute at ASU’s W. P. Carey School of Business, explains that influx can be spread through a variety of sectors — hospitality, transportation, professional, health and trade, as well as local and state governments.
Direct beneficiaries of these events are primarily businesses involved in the hospitality industry, such as hotels, bars and restaurants. Less obvious, there are businesses that gain indirect benefit, such as the suppliers of these direct beneficiaries and transportation surrounding an event.
Take a look at Super Bowl XLIX, held in Glendale last year. According to Evans, it generated $719 million for the local economy. The direct impact from that mainly benefited the hotels and restaurants; however, when people spend their money in those establishments, they then benefit sectors throughout the Valley.
The key economic aspect is these events bring “an influx of money into a particular area that otherwise wouldn’t have been spent there,” Evans states. The Super Bowl is a perfect example of this, since it is not an annually recurring event. If Super Bowl XLIX had not been held in the Valley, that $719 million would not have been disbursed in this state. As Evans says, events attract new money into the Valley.
As important as the direct effect of events is their ripple effect. A direct effect is created by people coming to the area and spending money at local hotels, shows, shops and restaurants. The money that is spent then helps the employer, who pays the suppliers and the employees. This generates the ripple effect — not only will a local business spend that money on other local companies but the employees also spend money at other businesses in the Valley. “We know that $45 out of $100 spent at a local business goes back into the community,” says Thomas Barr, of Local First Arizona, quoting a study from the Institute of Self-Reliance. “Those dollars continue to recirculate throughout an economy.” Not to mention the tax revenue generated for local and state governments.
About 9 million people visit Scottsdale a year, although the “prime tourism season is from January through April,” says Rachel Pearson, VP of Community and Government Affairs at the Scottsdale Convention & Visitors Bureau. Thanks to major events throughout that four-month period, Arizona is packed, restaurants overflow, hotels fill and businesses surrounding the events have a steady stream of customers. Focused on attracting visitors and locals, multiple businesses — planners, vendors, hotels — work together to make every event an economic success.
When it comes to events in the Valley, the hospitality industry enjoys the greatest beneficial economic impact. Most of the money visitors spend is in this sector, which includes hotels, restaurants and tourism companies. These businesses then employ chefs, kitchen workers, farmers, managers, cleaners, servers, bartenders — the list goes on.
Fans going out-and-about for an event take part in more than just that one aspect; they experience the whole area. “Events are often a reason why people do choose to book someplace,” Pearson says, describing them as both a “trigger” and a “great hook and driver” for people to come into an area. People will visit the Valley for a specific event, but while they are here they spend money. Visitors go out to restaurants, shop, go on outdoor adventures, play golf or go to the spa. And the best part: “All of that revenue comes back into our community.”
Of the people who visit the area on a yearly basis, 42 percent participated in events, Pearson says, citing the 2015 City of Scottsdale Visitor Inquiry. That is a 10 percent increase from 2014, when just 32 percent of visitors took part in events held in the City of Scottsdale. These include sports and recreation, arts and culture, automotive, golf and equestrian events.
Hotels are “instrumental in these major events,” says John Chan, director of the Phoenix Convention Center. For large conventions and events, hotels in Downtown Phoenix block rooms ahead of time for visitors to stay in throughout an event. The convention center and downtown hotels have to work together for all major events in the Valley, especially during a busy season, when a number of people are visiting the area.
Even though visitors spend their money within the hospitality industry, Pearson points out their money goes to a variety of industries. When they do stay at hotels, that money goes to employees — people who clean the sheets, farmers who provide produce for the kitchens. If hotels “don’t have that business, they don’t need those vendors,” Pearson explains.
“While we look at the economic-induced impacts, they are very short term,” Evans says of Arizona’s major events. “There is a longer-term impact as well.” These intangibles, as Evans calls them, are due to news coverage: People could be watching the Phoenix Open or Spring Training from out of state, where it is cold or rainy, and see the beauty of the state, with cloudless and sunny skies. Just that scene could make someone want to come visit. As Evan points out, press helps bring people for the future. News coverage builds a positive image of Arizona; it’s good branding.
While there are no direct numbers to show the benefits of news coverage, Pearson believes press draws visitors because they give a realistic picture of a place. They are a third-party endorsement, and not paid to give a particular message.
So news coverage of outdoor sporting events like Spring Training, the Phoenix Open and Arizona Diamondbacks games provide a realistic picture of the Valley. Cactus League Association ballparks are featured on national television throughout the month of March during Spring Training, and Mark Coronado, president of Cactus League Baseball Association, states, “The media exposure and the reputation that you are drawing locally, statewide, from the United States, and international is huge.” Perceived as unbiased, news coverage is marketing that can’t be bought.
Benefits to the Locals
While the first four months of the year are known for getting people out and about, events and entertainment don’t stop there. Phoenix Comicon in June is a local three-day convention that draws a major crowd of both visitors and locals. “It is a big deal Downtown,” Chan explains.
The first year the convention center hosted Comicon, only a few thousand people attended, Chan recalls. However, the turnout has grown, with more than 75,000 people attending last year. “They literally take over the facility and take over the Downtown,” Chan says.
The Phoenix Convention Center plays a major role in hosting events throughout the year. Says Chan, “Our bread and butter are our conventions and trade shows. Those are the types of meetings that bring people from outside of our market.”
While the Phoenix Convention Center attracts out-of-towners, the Center, along with Symphony Hall and Orpheum Theatre, plays host to meetings, banquets, receptions, operas, ballet and other theatrical performances that are more geared toward locals, Chan says. And they, too, have an impact on the economy. Locals use transportation, they go out to restaurants before and after events, and crowd the area. The conventions that have a local component are usually the most popular, with the highest attendance, Chan observes.
A lot of people are being introduced to the city due to events, says Steve Geiogamah, acting director of the City of Scottsdale Tourism & Events. They help promote the destination and make people aware of the area. “There are large and small events. Every one of them is unique and every one of them enhances the city.” And, he says, they give “quality of life for residents.” These goings-on are an opportunity for locals to explore their city, to participate and be active in events around the Valley, like running in the Rock ’n’ Roll Marathon or attending the Barrett-Jackson Car Auction.
The community likes to participate, Geiogamah explains. Events build community spirit, whether they are large-scale, covered by the press, or small weekly happenings. Recurring events, such as farmers markets and art walks, also bring foot traffic to an area. They benefit the people taking part in the event — such as the farmers or artists — and businesses in the surrounding area.
Such is the case with local sports teams and their fan base. The Arizona Diamondbacks’ season lasts from April through October, with an “attendance anywhere from 2 to 3 million,” says Derrick Hall, president of the Arizona Diamondbacks. There are 81 regular season home games, with two exhibition games and, potentially, playoffs.
With Chase Field in the middle of Downtown Phoenix, Hall says it is important to invest in the area. “We are really trying to build Downtown up.” The field, surrounded by hotels, restaurants, bars and the Phoenix Metro Light Rail, is a hub for businesses. Visitors and locals crowd the stadium, before and after games, eating at restaurants and utilizing the transportation.
While the Arizona Diamondbacks supports businesses surrounding the stadium, Chase Field also has local vendors for its concession stands. “We stayed local this past year,” Hall says. Delicious snacks came from eateries such as Lo-Lo’s Chicken & Waffles, Paradise Valley Burger Co. and Cactus Corn, to name a few. A member of the board of directors of community development group Downtown Phoenix Inc., Hall believes it is important to support local business — and, in fact, sees “‘local’ rising in the Valley.”
In the past, January didn’t see a lot of visitors in the beginning of the month. But with the popularity of the Rock ̓n’ Roll Marathon Series and the Fiesta Bowl, all of January is now a strong month, Pearson states.
From the marathon and football games kicking off the year through Spring Training in March and April, Arizona is the place to be. “We have seen, over the years, that events can certainly help push up occupancy and drive new visitors to the area,” Pearson shares.
March is the busiest time of year, with Scottsdale’s hotel occupancy at its highest rate. “We know most of that is from Spring Training,” Pearson says. The month-long event is one of the area’s most impactful. In 2015, almost 1.9 million people attended Cactus League Baseball Association baseball games, with 58 percent visiting from out of town, according to an FMR Associates tracking survey. Of those visitors, 66 percent stayed in hotels near one of the ten ballparks associated with Cactus League.
“When you talk to that percentage of visitors from out of state, they will say that the No. 1 reason to come here is for Spring Training,” Coronado says.
Cactus League is celebrating its 70th year this coming March. At one time, Arizona was just a warm place to stay and get ready for the season, Coronado says. However, the league is “really becoming an economic driver.” Although Spring Training lasts just one month, the league is busy throughout the year. After the major-league players leave, other teams use the facilities throughout the year. In fact, says Coronado, players from all over the world come here to train.
The league hires between 1,500 and 2,000 non-baseball employees seasonally, and Coronado notes, “If Spring Training wasn’t here, those people wouldn’t be hired.” In order to keep the ballparks busy with spectators and players, Cactus League works with multiple companies. “We deal with the corporate entities of the operations; we deal with the hotels, the restaurants; all of our media outlets,” Coronado says. “It’s kind of a triangle of working together to make sure we draw fans.”
Before Spring Training and the arrival of baseball fans, February in the Valley is known for a different sport — golf. The Waste Management Phoenix Open at TPC Scottsdale is the “largest golf tournament in the world,” says Dan Mahoney, tournament chairman. “It transcends a typical golf tournament.” Competition, he notes, is on a massive scale, and they “essentially build a city,” with a record-breaking 564,368 people attending the event last year.
For the week-long tournament, temporary workers are hired for trash removal, security is needed, and provisions must be made for tents, tables and chairs. And, of course, there are vendors. According to Mahoney, millions of dollars are spent putting this tournament together. “We are employing, and pumping millions and millions of dollars into the community.”
Corporations from out of state buy skyboxes and corporate suites for the Phoenix Open. And this year, Mahoney says, The Thunderbirds are working with the Arizona Commerce Authority and Governor Doug Ducey to help host CEOs of businesses. The group wants to show companies what Arizona has to offer, as an incentive to do more business in the state.
This tactic was first tried last year, in conjunction with the Super Bowl, Mahoney says. Now, Mahoney explains, they are going to start working to draw CEOs annually for the Phoenix Open. “It is a tremendous community asset and we need to put it to work for the community. We want CEOs of out-of-state companies to see what a great place Metro Phoenix is to live, work and invest.”