Tuesday, February 07, 2012

Events, Festivals, Worldwide Buzz and the Austin Economy

Leadership Austin's February "Engage Breakfast" highlighted how local festivals can leave a mark on both the local economy and international reputation of a city.  "Festival Fever" included a panel of experts discussing the direct and indirect impact of large and small events.

The panel included:

Hugh Forrest - Event Director, SXSW Interactive Festival
Lisa Hickey - Festival Marketing Director, C3 Presents
Geoff Moore - Chief Sales and Marketing Officer, Circuit of the Americas
Jon Roberts - Principal, TIP Strategies

When we examine the economic impact of the large events, such as South by Southwest, Austin City Limits Festival, and Formula One, we often only look at the dollar and cents that are spent around the event, but the real impact to a city like Austin often comes in other ways.

In the past, Austin was not thought of as an international city, but SXSW, ACL and now F1, coupled with our booming tech industry, has catapulted the city into full view of the world.  On a recent visit to London, the mayor and his delegation found that SXSW and F1 were well known.  (I find as a professional speaker that audiences all around the country always love that I am from Austin!).

Following the Atlanta Olympic Games many American cities began to realize that international events bring with them more than just money, but instead connections and communications with leaders in a variety of areas.  These connections can influence many long-term economic, corporate, and trade decisions.

The 2011 SXSW Festival pumped $167 million into the local economy (this is about equal to half of the impact a city sees from hosting a Superbowl).  ACL's economic impact was $100 million, plus over 2 billion media hits (and note that "Austin" is in the name of their event!).  Formula One is predicted to be equivalent to over 4 Super Bowls each year for a decade.  No other city of our size has this many internationally recognized events!

The number of out-of-town visitors that these large scale events bring to Austin is important, but it is the exposure that the city receives that is a game changer.  People like to share information about products they enjoy and with the proliferation of the mobile internet, the experience of these festivals help make Austin itself a product that is being raved about all over the world.  Both SXSW and ACL happen during the most ideal weather seasons... and who cannot LOVE Austin in March and October?  (note these events would not have the same level of success if they were held in August).

Our city's high tech industries and heavy adoption of social media has also helped drive the proliferation of the national and international reputation.  Additionally, SXSW was not the overnight phenomena, as the festival (which began as only a music festival, only later adding Interactive and Film) has been around for 25 years.  It is harder to start from scratch with a new event and expect it to rival SXSW.  It takes the support and integration of the community to make an event successful.

The influx of people to Austin for these mega events does bring with it some negative side effects, as the traffic and lack of hotel rooms for 20 miles causes hardships for some, but in addition to the economic boost, most of the larger events have charitable causes that they help support.  ACL has raised around $4 million over the years for the Austin Parks Foundations, which has allowed for improvements both at Zilker Park and in neighborhood parks all over the city.

Tickets to these giant festivals also are expensive, which means that not everyone can afford to attend.  SXSW does offer several free venues for music and their Gaming Arcade, but this also brought up conversation about the power of other regional and local festivals (such as The Pecan Street Festival) that are free and help build community. These gatherings bring people together, and local focused events should not get lost in the mix.  Local and regional festivals should be celebrated and cherished.

Formula One will be like nothing we have ever seen in Austin.  About 1/3 of the attendees are expected to come from Texas, 1/3 from the rest of the United States, and 1/3 from around the world.  Some questioned if Austin was the right fit for international racing, but Austin is really the perfect venue.  The sport is more about technology than racing.  Because of their investment in F1, Ferrari spends more than $300 million in research and development.  This investment has transformed the company from an automobile manufacturer into a technology company (they now have several tech divisions that are impacting the auto and other industries).  Much like the ancillary benefits that came from the space race in the 1960s, Formula One is spinning off advancements that will impact the future.  The commitment to technology and R&D makes Austin the right place to host this world-class event.

Few cities can lay claim to as many successful events and festivals, and Austin is poised to continue to see these events grow, as well as attracting new festivals (both ones that move and organically grown).  ACL has keeps growing, F1 is coming in big, and SXSW has nearly maxed out capacity (But the rumors of SXSW moving out of Austin are not true, as the vibe of the city is too deeply connected to the soul of the festival).

Thanks to Leadership Austin for hosting this informative and thought-provoking breakfast.  For more information on the Engage Breakfasts, visit the Leadership Austin website.

Have A Great Day.

thom singer

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