Category: Business

PHILADELPHIA, PA — – Mayor Michael A. Nutter announced that over the Labor Day weekend the Budweiser Made in America Festival, locally produced by Live Nation, generated at least $10 million in economic impact for the city economy and covered all municipal costs associated with the event, while netting hundreds of thousands of dollars in various tax revenues for City coffers.

“Today, the Festival promoters delivered a check for $305,124 to the City. Coupled with an earlier check of $200,000, I’m pleased to say that the Festival covered all costs incurred by the City for what was a truly stunning event on the Benjamin Franklin Parkway,” Mayor Nutter said. “Financial considerations aside, this event gained global recognition for Philadelphia and showed what a great city can do working with the private sector. It energized our hospitality industry on a traditionally quiet weekend, brought thousands of visitors to our city and pumped millions of dollars into the city’s economy.”

A preliminary economic impact estimate was developed by Econsult Corp., the Philadelphia based consulting firm, working on a pro bono basis for the City of Philadelphia. Using a set of conservative assumptions, Econsult estimated $6.1 million in direct new net spending and an additional $3.6 million in indirect expenditures. Spending by Festival attendees on tickets and concessions was not included in the analysis.

Meryl Levitz, president and CEO of the Greater Philadelphia Tourism Marketing Corp., said, “Labor Day weekend is usually a very slow time for hotels, restaurants and the whole industry. But this year, Center City occupancy (including University City) soared the entire three nights, averaging more than 90% for the weekend at very good rates. The last couple years, it was 66%. This means an increase of more than $2,000,000 in hotel revenue, spinning off tax revenue, restaurant receipts, and souvenir purchases and so on.”

Levitz said that the two-day event also spread the city’s name worldwide. “Equally exciting was the international media coverage: we have tracked well over 6,000 pickups so far including print, online and electronic. When you add in the global chatter on all social media platforms, the sound of Philadelphia will continue to resonate, giving strength to our great city’s image as the place to be,” she said.

In addition, Festival promoters have estimated that during the two-day event 1.5 million viewers from all over the nation and world live-streamed the event.

Ed Grose, executive director of the Greater Philadelphia Hotel Association, said his member hoteliers were “thrilled with the weekend.” Citing research from PFK Consulting and Smith Travel Research, Grose said room revenues were $4.96 million for the weekend, up $2.17 million over 2010. Grose said the 2011 Labor Day weekend was impacted by Hurricane Irene. The occupancy rate for Labor Day weekend 2012 was 90 percent, up almost 21 percentage points over 2010.

The Econsult analysis completed three days after the Festival estimated total city tax revenues of $223,000. But city officials believe the total tax revenue impact will be more. For example, a recent analysis of hotel occupancy data conducted by GPTMC estimated hotel tax revenue at almost $202,000 for the three days of the event.

In addition, the Econsult analysis did not include an estimate of amusement tax. Live Nation officials said today that 78,655 people attended the Festival, generating $5,049,924 in gross ticket sales. In turn, the City’s 5 percent amusement tax raised $240,473 in amusement tax revenue. Wage tax revenue has not yet been fully calculated, though the Econsult analysis projected $66,000.