Review finds some large-scale events turn a profit for Virginia Beach, others don’t
VIRGINIA BEACH — Several major festivals held at the Virginia Beach Oceanfront this year turned a profit for the city, according to a new economic analysis of the city’s event sponsorships.
Pharrell Williams’ Something in the Water music festival, the Beach It! country music festival and the North American Sand Soccer Championships were the most successful in terms of return on investment, Vincent Magnini of the Institute for Service Research told the City Council Tuesday. He’s been analyzing eight events that received city support and were held in the resort area. Magnini presented data on five of them.
The city ramped up its festival calendar this year to drive tourism, engage local residents and generate revenue. But some people who live in the resort area and visitors who were impacted by sections of the beach being closed, amplified music and parking limits expressed concern about festival fatigue.
Magnini looked at visitor surveys conducted after the events ended, information from the event organizers, ticketing data, hotel occupancy figures and city records.
The analysis showed that not all events generate a large sum of revenue for the city, but they still draw people from out of town to the resort area.
Something in the Water, which attracted 33,000 festivalgoers each day on Friday and Saturday of that April weekend, had the highest economic impact in Virginia Beach — generating more than $26 million in economic impact and more than $1.49 million in tax revenue. It also had most hotel stays with more than 12,600 rooms booked. The final day of the three-day festival was rained out.
The city provided a sponsorship to the festival promotor based on the taxes generated. Between the tax arrangement and in-kind donations, the city spent a total of $1.48 million. Every dollar spent by the city on Something in the Water yielded between $1.04 and $1.18. Magnini’s findings were presented in ranges because of the estimates used in the modeling platform.
On the other hand, the Jackalope adventure sports festival, which was a free event for spectators, was a loss in terms of its economic return on investment. Jackalope received a $1 million grant from the city in its first year, and it’s scheduled to return next year. Every dollar spent by the city yielded only between 47 and 53 cents in tax revenue. Attendance at Jackalope was nearly split down the middle between locals and non-residents. Also, it attracted the most people who had never come to Virginia Beach before Jackalope.
The soccer championships generated the most profit for the city, turning more than $15 for every dollar spent. A longstanding event at the Oceanfront, sand soccer drew the greatest percentage of non-resident visitors at 77%. The city invested only $44,000 in the event.
City Auditor Lyndon
Remias also analyzed the city sponsorship agreements for Something in the Water and Beach It! His report revealed that both events, produced by Live Nation, didn’t produce enough tax income to warrant the full sponsorship amount the city had appropriated.
The sponsorship for SITW provided the company with admission, meals and a local portion of the sales tax within the festival footprint.
The city set aside $2 million from the Tourism Investment Program fund for SITW, but less than half of that amount — $970,000 — was collected through the taxes.
In-kind contributions were also provided for the festivals. For SITW, those included resort area stages, public parking lots and public safety amounting to approximately $800,000.
For Beach It!, the city appropriated up to $1.5 million for the admission tax, but only $351,000 was collected. In kind contributions totaled about $121,000.