Our little band of brothers at the Huddle Up Group interacts with over 400 destinations on an annual basis. We do this through consulting projects (strategic planning, facilities, and/or economic impact studies) and also through the Sports Tourism Index™ platform. The cool thing about this level of engagement is that we have a massive trove of data we can lean on to benchmark nearly every aspect of the industry we serve. This week’s Huddle Up is about some of that data, specifically intel on budget sizes for tourism bureaus that are active in our space.
We get asked all the time about what level of resources a destination needs to be competitive in the sports tourism marketplace. As my favorite college economics professor used to say, “It depends.” There are a lot of factors that go into benchmarking budget sizes and in determining how much is enough to get the job done.
One of the questions that is asked within the Sports Tourism Index™ is about what we call “deal making funds.” These resources are defined as the financial assets your organization has to put towards attracting events to your destination. They could come in the form of bid fees, sponsorships, marketing dollars, grants, and/or other similar sources. Not surprisingly, there is a wide range of answers to this question, however we can use this data to paint a good picture around this from a national perspective.
Of the hundreds of sports tourism focused destinations that have entered data into the Index™, here are some key benchmarks on their “deal making funds” (hereafter “fund”).
- 42% of organizations have a fund below $10,000.
- 68% of organizations have a fund below $50,000.
- Only 12% have a fund of more than $200,000.
If we expand the data analysis to cross reference market sizes of above or below 500,000 people, there are some small but interesting shifts…..
- 71% of destinations with under 500,000 people have a fund below $50,000.
- For markets of more than 500,000 people that under 50k number drops to 54%.
- Only 8% of markets under 500,000 have more than $200,000 in their fund.
- That figure rises to 27% in markets larger than 500,000 people.
So in those two examples, the larger the market, the larger the budget. Makes sense.
However, what we have experienced over the years is the location of the destination and the human capital (people) that are marketing it, have a major effect on how much they may or may not need for their fund. Relationships go a long way, so if your destination doesn’t have biz dev people with a solid list of contacts, it is likely you will need more financial resources to get the business you are looking for.
The moral of the story is indeed, “It depends.” A good mix of financial resources with experienced and connected people deploying them will have better success over the long haul. Yes you can allocate a bunch of cash and “buy” business in the near term, however our team hasn’t seen that strategy serve as a sustainable business model.
We will be touching on this kind of data more and more as the new year moves along. For now, get the right people in place and give them the resources they need to succeed.
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