WILMETTE, Ill. – Sports tourism is big business and many entities are involved on all sides of this equation.
In this month’s column, we examine the numbers and strategy that serve as a catalyst for economic development.
It is typically defined as traveling to a destination specifically for a sports-related activity (e.g., racing, testing, recreation, etc.) or visiting a sports-related attraction (e.g., track, car museum, race shop, etc.).
Estimates peg sports tourism in the United States as generating $103 billion per year and it’s growing at an annual rate of nearly six percent. This includes both direct and indirect spending.
Lots of the focus has been on those participating or attending and when, where and how they are spending these dollars.
Just as important are the entities hosting events and seeking to attract attendees to these activities. They need new sources of revenue and raising taxes or increasing fees are not popular policies.
Sometimes those in business have to spend money to make money. This is where sponsorship becomes part of the conversation.
In order to evaluate if this makes sense, certain issues should be considered: How will this spending be viewed by residents and will it generate the expected revenue?
There are several reasons cities will embrace sponsorship. Destinations are looking to strengthen name recognition, build brand awareness and bolster business development.
One of the largest places to embrace sports sponsorship is Texas, where officials established legislation to support projects throughout the Lone Star State.
The Texas Event Trust program is comprised of three separate funds — the Events Trust Fund, Major Events Reimbursement Program and Motor Sports Racing Trust Fund.
The goal is to attract various types of events. The funds can assist communities with paying costs related to preparing for or conducting an event. They will direct gains in various local and state taxes generated from the event into a dedicated event-specific account to cover allowable expenses.
The largest state disburses more than $100 million for these categories. About 60 percent for the largest events and 40 percent for smaller activities.
Most recently, Circuit of The Americas in Austin, has been one of the largest recipients. For the track’s most recent Formula 1 event, officials applied to receive almost $40 million and $6 million for a MotoGP weekend. The NASCAR Cup Series race at Texas Motor Speedway was in line for $10 million and NHRA was to receive $3 million for its Texas Motorplex event.
Additional Texas sporting events that got backing were the NCAA Final Four at $16 million and $5 million for WrestleMania.
Clearly, everything is bigger in Texas and the appetite for supporting events is as big as it gets!
This story appeared in the April 19, 2023 edition of the SPEED SPORT Insider.
