Taking A Closer Look At Tour of Missouri Economic Impact Estimates

Last month, the Lieutenant Governor Peter Kinder's office touted a study from IFM Sports about the estimated spending by Tour of Missouri spectators during this year's race. According to their analysis, spectators spent more than $38 million on food, lodging, gas, souvenirs, etc. as part of their viewing of the race. The LG's office wasn't able to explain how these estimates were produced, but I was able to talk with one of the analysts at IFM Sports.

Per my conversation IFM, the Tour impact estimates weren't created by a review of sales or lodging tax receipts, but by:

1. Asking a sample of spectators about what their spending related to the race
2. Using that data to create a profile of the typical party of spectators for locals (people who watched the race less than 50 miles from their house), non-local Missourians, and non-Missourians
3. Multiplying that average spending estimate by the estimated number of spectators (provided by law enforcement officials) according to a projected breakdown of the three subgroups of spectators (locals, non-locals, non-Missourians)

Here's a web-friendly version of the topline estimates -- the spreadsheet from which this comes is also embedded at the bottom of this post.

It's worth noting here that average numbers for each of the spending categories are for parties, not individuals. So, for example, IFM estimates that the average local party of spectators spent $26.87 on food & beverages connected to their viewing of the race. Kinder's office misunderstood this in the press release announcing the study. "The average out-of-state visitor spent over $220 per day during their visit," Kinder claimed. However, as their own chart shows, the average out-of-state visitor spent $97.57 per day, not $220.

Also, these numbers don't include any spending by the riders, their teams and vendors, who probably required a fair number of hotel rooms on their own.

Multiplying the estimated spending per party by the separate estimate of spectators, here's how the totals break down by category:

A more complete impact study is expected to be published in the coming days, and I look forward to seeing more about how the total spectator estimates are distributed by community.

I'm not a sports researcher, but am somewhat skeptical of the assumptions used to create these estimates. The surveys of spectators at the start and finish lines seem reasonable enough, but if I'm understanding things correctly, these estimates also apply to people who watched the race fly by nowhere near the big tents and vendor stands. It's certainly in the interest of race promoters to have large spectator totals -- and a lot of people do see the race for very short periods of time as it travels through their communities -- but I'm not convinced that the data collected by more enthusiastic viewers at the start and finish lines can be reliably projected onto people who just happen upon the race.

Also, I'm and am interested to know how these estimates correspond with on-the-ground reports. Even though local (Republican) tourism officials have previously reported relatively limited lodging reservations by Tour spectators, these Tour-provided estimates indicate activity that would be hard to miss. Consider:

• Locals were estimated to have spent $814,482 on hotel rooms to watch the race -- even though they were watching the race in or near their hometowns. If one assumes a average cost of $150 per room (and that could be a little high), that works out to 5,430 hotel rooms just for local spectators over a one-week period.
• All together, $12.3M was estimated to have been spent by spectators on hotel rooms. At $150 per room, that's 81,778 hotel rooms -- or about 11,683 hotel rooms per night. Remember that this doesn't include any hotel rooms for riders, their teams, vendors, etc.

If I'm misunderstanding or misreading the data, please let me know in comments or by email. But based on the topline data presented so far and the first-hand accounts presented at the October 1 Tourism Commission meeting, I think there's good reason to take the economic impact estimates with a grain of salt.

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Here is the full spreadsheet of topline data as provided by the Lieutenant Governor's office.