Do sporting events, concerts, and other big events in a given city boost that city’s adjacent business revenue? Venue-centric vendors and apparel shops certainly benefit, but what about the broader scope of foot traffic to bars, restaurants, and retailers in a given city? Placer.ai is out with new data to answer this question.
Skipping right to the punchline, the results are mixed. Though common wisdom holds that mega events lift all boats in bringing new energy and foot traffic to a given city, the ground-truth outcomes tell a more nuanced narrative. That includes uneven results across verticals and other local variables.
Placer examined these questions through the lens of this year’s World Cup. Given the scale of the event, and its geographic diversity across U.S. cities, it offers a robust sample and several factors to uncover insights and answer some of these questions. Placer.ai came up with a set of lessons from the results.
Data Dive
To synthesize these results and layer in some insights, here’s our analysis and paraphrasing of the top takeaways from the Placer.ai data.
1. Mega-Events Don’t Necessarily Boost Foot Traffic
Elevated business levels from a big event aren’t a given. In an aggregate sense, the lift was lower than you might think. Placer.ai reports that year-over-year retail visits in World Cup host cities outperformed non-host markets by just .1 percentage points throughout the duration of the tournament.
And the gains that do happen are specific to certain verticals or other factors that we’ll go over below. For example, dining saw a bigger boost than the broader retail category. The latter was mostly not impacted by the presence of the World Cup, at least in an aggregate sense across markets.
2. Communal Viewing Drives Dining
Speaking of dining – a category expected to get a boost by mega-events – the level of impact depended largely on the subcategory. For example, bars performed best with a 9 percent increase in foot traffic on World Cup game days. QSR was flat while coffee shops and full-service restaurants were down.
One of the common denominators here is outlets that are inherently social and enable communal viewing. So sports bars will have large displays to capture event-driven demand, more so than restaurants where patrons are chained to a table and possibly out of view of TVs broadcasting games.
3. Not All Retail is Created Equal
Like restaurant subcategories, retail performance varied based on themes & products sold. Not suprisingly sporting goods retailers performed best. Meanwhile, apparel stores and superstores saw mixed results. This tells us that events don’t guarantee foot traffic – other variables have to align.
This is valuable intel because retailers who don’t thematically align with a given event (sporting, music, or otherwise) can run promotions that do align in some way. That extra push is necessary in many cases. And retailers should plan inventory levels according to the realistic boost they may or may not see.
4. Proximity Matters
Aligned with the theme that mega-events don’t guarantee business levels and “it depends,” another deciding factor is distance. There’s a clear correlation between revenue lifts and proximity to event venues. Though this isn’t surprising, it validates the fact that events don’t lift all boats in host cities.
To add some color, bars & restaurants within a mile of event venues grew foot traffic by 54 percent on game days, while retailers grew 22 percent. Those gains decline the further you get from a given venue. This could suggest that businesses launch mobile business units (think: food trucks) or pop-ups.
5. Venue Location Matters Too
Sticking with proximity, it’s not just about the business location but the venue too. The centrality of a given venue – whether it’s downtown or displaced from a city center – impacts the economic boosts it can bring to that city. For example, Atlanta and Houston saw big gains while New York and Miami didn’t.
Similarly, think of the difference between AT&T Park (San Francisco Giants) and Levi Stadium (San Francisco 49ers). The former is in San Francisco, while the latter is 40 miles away in Santa Clara, CA. In fact, Levi Stadium happened to be one of the World Cup venues with a muted local business impact.
6. Public Activations Can Broaden Participation
Just holding an event in a city isn’t enough. Sometimes additional promotional efforts are needed to get consumers out into the streets. In the case of the World Cup, there was a clear correlation between foot-traffic gains and promotional events such as official FIFA Fan Festivals held in many cities.
These boost the numbers by holding free events that expand attendance – and therefore local business revenue and economic development – well beyond event ticket holders. These event-associated activations can better fill up local restaurants and parking lots while supporting retailers and vendors.
7. Event Logistics Matter
Crowds don’t automatically translate into commercial spillover. It can be impacted by the unintended consequences of event design and logistics. For example, Houston’s FIFA Fan Fest allowed attendees to leave and re-enter freely, causing a 22.4% and 24.0% lift in nearby retail and dining traffic, respectively.
Los Angeles, conversely, prohibited re-entry in its Coliseum activation while offering extensive food and beverage on-site. As a result, the retail and dining foot traffic within a one-mile radius grew by much smaller levels – 7.2% and 8.0%, respectively. This compels more holistic and thoughtful event logistics.
So there you have it. For more color, charts, and narratives directly from Placer.ai, check out the full report.
