By Dylan Gonsalves, @DylanGonsFOS
The Super Bowl continues to be a moneymaker for every host city and region. While no host team has ever won the Super Bowl, each year, that city continues to win big in the ‘G’ column.
The ‘G’ stands for green, which is the color of victory for Super Bowl host cities.
Last season, per a study conducted by Dr. Patrick Rishe of Sportsimpacts, Super Bowl 50 generated approximately $240 million, which is a conservative estimation.
This morning, while many fans and attendees will be wishing that they could sleep until Thursday to heal their hangover and the dents in their wallets, the city of Houston will be tallying tax dollars and continuing to celebrate another Super Bowl success.
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When all the dust settles from Super Bowl LI, the local Houston economy will have an enormous share of revenue to sort out.
All in all, PriceWaterHouseCoopers estimates that approximately $190 million will be pocketed by the city from yesterday’s Super Bowl between the Atlanta Falcons and the New England Patriots.
The events that led up to the game will have made a substantial contribution as well, and there is an additional estimation from the Houston Host Committee and Lockport Analytics that projects the Super Bowl will generate approximately $419 million.
Looking back at the past several Super Bowls, the numbers forecasted by the Super Bowl LI Host Committee and PwC are not far off:
Altogether, a majority of the dollars made in the past Super Bowls were contributed by hotels.
Keith Bruce, the CEO & President of the Super Bowl 50 Host Committee, told Front Office Sports, “Hotels were far and away number one. Hotels contributed $80 to $90 million of that $240. It was hotel-driven, positive revenue, year over year, when you compare what they did last year (the same week) to this year.”
Of the $240 million San Francisco and the Bay Area brought in from Super Bowl 50, the venue rentals used for parties and gatherings, the food and beverage sector and the retail sector contributed the majority of the remaining dollars, with retail contributing the least.
The city of San Francisco contributed roughly 57 percent of the $240 million generated by the host region, per the Super Bowl 50 Host Committee’s press release, and with a population of roughly 873,000 inhabitants (U.S. Census Bureau), you can estimate that the $240 million was created by approximately 1.468 million people, if you add the additional 43 percent.
When you compare that to the city of Houston, which has a population of 2.196 million (U.S. Census Bureau), it is entirely possible that Super Bowl LI could produce numbers closer to $360 million, at least.
And, to make that $360 million even more likely, on top of having almost twice the population, Houston has one of the highest lodging taxes in the country at 17 percent, per Danny King of Travel Weekly.
There is reason to doubt, of course, that the number will be as high as Houston’s Super Bowl Host Committee projects.
PwC did project the number to be under $200 million, and it greatly depends on how the study was conducted.
The Houston committee hired Rockport Analytics to conduct the study, prior to the completion of yesterday’s Super Bowl, and they used a different approach than last year’s Super Bowl committee, which only accounted for fans and attendees that came to the San Francisco Bay Area from out of town and outside the market.
When asked about why the study was done that way, Bruce said, “Past Super Bowl host committees’ economic impact studies tended to exaggerate or overstate the true impact. And when I say that, I simply mean that there are varying philosophies from the different economic impact study providers as to what should be included as real economic impact versus what could be attributed to real economic impact.” In his opinion, “We knew that money (the $240 million) was because of the Super Bowl. There was no denying that.”
Rockport Analytics estimates that 138,000 people will come from out of town to visit Houston during Super Bowl week. If they used the same method as Keith’s committee, you can bet that the projection would be much lower than the $419 million they are forecasting, as they estimate those 138,000 people will spend approximately $324 million.
In their breakdown, 25 percent was contributed by hotels (vs. SF’s 37.5 percent), 24 percent by food and beverage and 24 percent by retail and shopping, another big difference from last year’s study. You can read the study in its entirety here.
As far as overall spending goes, the Houston Texans had a greater chance of winning Super Bowl LI than the city of Houston does at ending up in the red after the weekend. According to Bruce, the Host Committee provided most of the funds required to put on the Super Bowl, but there was no doubt in his mind they would be gaining a net positive return for their contribution.
The city contributed a decent sum in San Francisco, around $5 million, but they gained that back with ease.
Hasting Stewart, senior director of media relations for the Houston host committee, spoke with the Houston Press regarding their budget and spending on the week. He said that their committee operated on a $63 million budget made up of private donations and corporate sponsorships. He said they will reimburse the city for the expected $5.5 million in security costs and, additionally, the state will earmark between $20 million and $25 million toward the host committee’s costs from its major events trust, which is funded by statewide sales, hotel, alcohol and rental car taxes.
To be exact, the state of Texas donated $25.4 million to the host committee’s budget, per Joe Martin of the Houston Business Journal. With a potential $200-400 million to be accounted for in the coming days, it is fair to presume that the state of Texas and the city of Houston will be getting more than they paid for.
Despite the Texans having lost to the Super Bowl Champion Patriots in the Divisional Round of the playoffs, you can bet the city will still be smiling this week.
Regardless of what happens in next year’s Super Bowl in Minneapolis, you can bet their city officials will be smiling too.