Jack Pelfrey
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Lake Eufaula is, quite literally, a treasure.
Every dollar spent everywhere has an economic impact. If a local business hires a new employee, there will be an economic impact. When someone drives through Eufaula and stops to buy lunch, there is an economic impact. Likewise, dollars attracted by Lake Eufaula have a local economic impact.
In an economy where dollars are moving freely and rapidly among many buyers and sellers, it is very difficult to assess the economic impact of an additional dollar spent. It is relevant whether that dollar is an addition from outside the local economy, or whether it is a dollar already in the local economy that would have been spent on something else. But it becomes somewhat easier and more precise an exercise to assess the economic impact of a discrete event, such as a sporting event. It’s a little like seeing night-glow lettering against a dark background. The contrast makes it much easier to see.
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The Eufaula Barbour County Chamber of Commerce, through its Restricted Tourism Committee, works to bring several fishing tournaments to Lake Eufaula every year. I’ll therefore use the example of one of the 2011 fishing tournaments to demonstrate the economic impact these tournaments create. But first, a little about how the economic impact is calculated.
The economic impact of an event can be defined as the net change in an economy resulting from the event. In our example, fishermen and tournament operators come to Eufaula to participate and run the event. That means visitors are coming to town and renting hotel rooms, buying meals, buying gasoline and all of the other items needed for the days they’re here. Another aspect of fishing tournaments is that many competing anglers will come and practice-fish prior to the event itself, which adds to the economic impact of the event. All of these are referred to as direct effects. But that’s not all. There are other effects, referred to as indirect effects and induced effects.
The indirect effect is the money re-spent by hotel workers, restaurant workers, gas station employees, and others from the wages they’ve earned serving the anglers and others during their visit. The best example of the induced effect is when an angler living elsewhere comes to Eufaula to fish because he or she saw an interview on TV with the FLW Outdoors tournament director stating that “Lake Eufaula’s facilities are as good as any in the country;” and that Eufaula is “one of the most hospitable towns in the United States.” And that is why we work to attract fishing tournaments that generate regional and national publicity through TV, internet and magazine coverage owned, controlled, and/or influenced by the tournament operators. The economic impact of an event can be expressed by the following equation:
Total Economic Impact = Direct Effect + Indirect Effect + Induced Effect
Studies have shown that every dollar spent by anglers, operators and spectators of a fishing tournament, the direct effect, can result in as much as $2.70 of economic impact when the indirect effect and the induced effect are added; and more recent studies indicate that amount may be even greater. So if the direct effect of a tournament, the dollars actually spent locally by visiting anglers, et al, is $100,000, then the total economic impact of that event could be as much as $270,000. The total indirect and induced effects can therefore be expressed as a ratio of the direct effect, and this ratio is referred to as the multiplier. The multiplier quantifies the process through which initial spending (direct effect) generates further rounds of spending (indirect and induced effects), and in this case is expressed as a factor of 2.7. So the economic impact equation above can be restated as:
Total Economic Impact = Direct Effect X 2.7 (Multiplier)
Let’s look at the FLW Outdoors Everstart Tournament held this past April. This tournament had 144 boats participating, which equates to 288 anglers and co-anglers, most of whom were visitors and stayed in local hotels and motels. When you add family members, tournament operations staff, and sponsor reps, the total number of people renting local hotel rooms can easily be over 500. Using an average of two people per room, that’s 250 hotel rooms. If the average room rate is $50 per day, that’s $12,500 daily for lodging. This was a three-day tournament, and most contestants came early to practice-fish, so if the average stay was five days, that’s a total of $62,500 in direct economic impact just in hotel rooms. Similar calculations for food, gas and other miscellaneous expenditures result in a total direct economic impact for the tournament of over $375,000. Apply the multiplier of 2.7 to this amount and you see that the total economic impact of this one fishing tournament is over $1,000,000.
The FLW Everstart is the biggest fishing event held on Lake Eufaula this year, but the Chamber of Commerce also helped sponsor and/or promote seven other smaller tournaments. The combined economic impact of these fishing tournaments totals over $3,000,000.
And this article only addresses the economic impact of fishing tournaments that the Chamber has a part in. There are over sixty others this year that launch from Lakepoint marina, and while these are generally smaller and have fewer out-of-towners participating, their money spent will multiply by some factor as well. When you consider that almost 4,000,000 people visited Lake Eufaula in 2010, it’s easy to see that we all benefit from the economic impact generated from the lake. And we can all do our part to protect, improve and promote Lake Eufaula.
It’s worth repeating; Lake Eufaula is, quite literally, a treasure.
Jack Pelfrey is Executive Director of the Eufaula Barbour County Chamber of Commerce |