Abstract
Festivals can improve the image of host communities, making them an appealing destination and boosting local economy. However, it is hard to measure their actual impact, which is a key factor to justify governments’ initiatives. This study aims to verify how accurate direct expenditure analysis can be. First, the impact of new visitors’ expenditure is calculated based on a survey. Then, consumption indicators are used to forecast the actual economic impact of the festival. Finally, both results are compared. Even though the values gathered with consumption indicators are only a lower bound of the festival’s impact, this study found that assessing expenditure intentions during the festival leads to impact estimates that can be three times higher. The theoretical contribution of this study is to identify direct expenditure analysis weaknesses and how to reduce their effects.
Highlights
Festivals and touristic events increase the visibility of host communities, which contributes to local economies by attracting tourists and increasing expenditure
The present study showed that is possible to estimate the direct expenditure impact of a festival in the local economy
It presented a methodology to validate the impact estimates. This validation process revealed that the expenditure analysis produced results three times higher than those calculated based on consumption indicators
Summary
Festivals and touristic events increase the visibility of host communities, which contributes to local economies by attracting tourists and increasing expenditure. These events are mostly funded by local governments who share a need to measure the resulting economic impact to justify their investments. The impact of tourism and of touristic events, festivals in particular, has been widely researched. There is still no consensus on what is the best way to measure their contributions to local economies. There are two major problems in measuring the economic impact of an event. To decide how to exactly define economic impact and how to measure it. The second problem derives from the need to validate that impact
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