2024-08-24 05:26:09
Cities want to attract visitors (festivals, attractions, racing, etc.) and thus boost local economic growth. What direct revenues does the city gain from this strategy?
Ernest Carbono
What do the Grand Prix, Osheaga, the Montreal International Jazz Festival, etc. mean? Take the 2019 Grand Prix, for example. According to Tourism Montreal, roughly speaking, the event contributed about 0.01% to the province’s economy.
Let’s expand on this. A few years ago, the Organization of Major International Events (RÉMI) estimated the economic contribution of its 17 members (Osheaga, Just for Laughs Festival, Rogers Cup, etc.) to the Quebec economy. It amounted to $290.8 million. By adding this amount to the amount generated by the Grand Prix, we can deduce that the contribution of these events to the Quebec economy in 2019 was… 0.08%.
The role of tourism in the economy
The answer to this question is two-fold, says Pierre Emmanuel Paradis, an economist at AppEco.
First, the role of tourism in economic growth. Let’s use 2019 as an example, as this is the last year for which the data was not affected by the pandemic. Tourism Montreal estimated the economic impact of the 2019 Grand Prix on the province’s GDP at $63.2 million.
“It’s not zero: 63 million is 63 million. But we can’t say that without the Grand Prix there would be no tourists,” said economist Pierre Emmanuel Paradis.
Can we talk about significant economic benefits in this case?
For Tourisme Montreal, major events are of great significance to the tourism industry and are a calling card for this metropolis.
“The economic impact of the four-day Grand Prix is equivalent to the average spending in 12 days in mid-June. So, we can say it is [environ] Three in one,” said Aurélie de Blois, a spokesperson for Tourisme Montreal.
Mr. Paradis said the highest-earning tourist revenue comes from abroad because tourists choose to visit Quebec over other destinations. In theory, the money spent by tourists in Quebec, unless saved, would be spent in another sector and would allow the economy to grow in a different way. Martin Roy, president and CEO of RÉMI, agreed.
More than 4 million people attended one of the 17 participating festivals in the study published in 2018. Of these, 190,603 visitors from outside Quebec travelled to their destination primarily because of the event.
This picture […] Demonstrating the importance of the industry as a destination’s flagship product, events often transform a simple intention to travel into a trip on the calendar.
Martin Roy, President and CEO, RÉMI
income
Now that we understand the contribution of tourism to the economy, how can governments at all levels benefit from it? First, cities.
We can assume that this value will eventually be converted into the property value of the institution and then returned to the city government’s coffers in the form of taxes.
Pierre Emmanuel Paradis, economist
Aside from this new land wealth, the only other direct revenues the City of Montreal sees coming are those related to parking pricing and public transit use.
“Public revenues from tourism are mainly collected by the Quebec and Canadian governments through sales taxes (QST and GST) and corporate and personal income taxes,” Gonzalo Nuñez, public relations officer for the City of Montreal, explained in an email.
In 2018, RÉMI estimates that the 17 events included in its study generated $49.3 million in tax revenue for the Quebec government and $17.3 million for the federal government. However, these events are made possible by local, provincial and federal subsidies, which account for 16.7% of their revenue.
riceI De Blois recalled that tourists generate expenditure in five areas: food and beverage services, accommodation, leisure and shows, transportation and travel services.
“For every dollar spent by festival-goers, a quarter went on lodging and a third on food and beverage,” recalls RÉMI’s president and CEO.
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