People are quick to say that the Super Bowl, Wrestlemania and the Final Four serve as valuable capital injections into local economies—with some even trickling down into lasting property appreciations.
But economists aren’t so sure. “About 20 years ago people thought these events were a big economic boom for an area,” Rajeev Dhawan, chief of Georgia State University's Economic Forecasting Center, tells Bisnow.
“But then people realized that if you have an event in an area which already has 90% occupancy in the hotels, it doesn’t add much; it actually substitutes.”
Dave Berri, former president of the North American Association of Sports Economists, echoed that sentiment last year. ”Sports do not generate economic growth; they don't really generate jobs.”
Jobs, of course, are one of the engines behind commercial real estate growth, as well as economic health as a whole. However, the local economy can get a boost from huge events that include constructing new infrastructure, like the World Cup or Olympics, Rajeev tells us.
Case in point, Stan Kroenke's new LA stadium is expected to bring in big bucks for real estate players in Inglewood, as Bisnow previously reported.
And beyond the direct monetary injection, big events—even ones without new construction—can have a “non-pecuniary, spillover effect” that increases tourism and the ability to snag more high-brow sporting events in the future.
“It puts you onto the map, so people can say, ‘Hey, we had the Final Four, why don’t you come here for these other events,” Rajeev says. “It can put an area on people’s radar screen.”
)
)
)
)
)
)
)
)
)
)
)
)