Super Bowl an Economic Boom for NYC?
Will the snowy New York City area really reap an estimated $600 million economic boost from the Super Bowl? Probably not.
Despite such lofty predictions, sports economists say the financial impact of the Super Bowl could fall far below expectations, in part because visitors often spend their cash at NFL-sponsored or corporate events rather than at tourist attractions. Some hotels say Super Bowl bookings are running behind what they hoped for, prompting them to ease demands for minimum stays and room deposits. And academic studies show that at best, past Super Bowls generated tens of millions, not hundreds of millions.
"Move the decimal point one place to the left," said Robert Baade, a professor at Lake Forest College in Illinois, who has studied the Super Bowl's impact on local economies. "The NFL says $500 or $600 million? I think $50 to $60 million would be a generous appraisal of what the Super Bowl generates."
The NY/NJ Super Bowl Host Committee, which has worked closely with the NFL to prepare for the Feb. 2 game, has claimed in the yearslong run-up that it would generate $500 to $600 million for the region, but it refused to provide any information on how it tabulated that estimate. An NFL spokesman said the league does not conduct economic impact studies on the Super Bowl.
A study Baade conducted in 2000 showed that the average Super Bowl from the 1970s through the late '90s only accounted for about $32 million each in increased economic activity at the most. The study, which examined tax revenue and other economic factors before and after the Super Bowl, concluded that the 1999 Super Bowl in Miami, for example, only contributed about $37 million to the South Florida economy.
The NFL, by comparison, claimed that 1999 game between the Denver Broncos and Atlanta Falcons generated $396 million, the study said.
County sales tax data in Jacksonville showed hardly any increase in 2005 when it hosted the Super Bowl compared to non-Super Bowl years, according to a study conducted by Philip Porter, an economics professor at the University of South Florida.
"No one's ever been able to find a footprint that an event occurred," he said.
Porter found that visitors spend money at NFL-funded events and buy NFL-branded memorabilia during Super Bowl week instead of frequenting local establishments.
Die-hard Denver or Seattle fans won't necessarily attend a Broadway show or visit the Statue of Liberty during their stay, as tourist attractions often report lower attendance than usual during major sporting events. They're more likely to visit Super Bowl Boulevard in Times Square, which is filled with NFL-sponsored activities that funnel money directly back to the league.
A Business Bonanza
Economic impact studies commissioned by past Super Bowl host committees - based largely on spending surveys distributed among fans at the game - claimed that the 2008 Super Bowl in Glendale, Ariz., generated a record $500 million and the 2006 game in Detroit brought in about $274 million. But those studies, which aren’t made publicly available, are widely disputed by economists.
"Here’s how the NFL gets the huge numbers that they get. They ask the people, ’How much are you spending while you’re here?’" Porter said. "They ought to be asking: ’How much did we sell you while you were here?’"
The Super Bowl is a weeklong business bonanza for people who work in marketing, advertising, product development and sales, said Robert Boland, a professor of sports management at New York University.
"The Super Bowl has a life of its own as a trade show apart from a football game," Boland said. "It’s about 10 days of celebration, trade show and tourist event, and then it’s a game. And not necessarily the same people attend both."
Experts note that the pre-game madness may also deter tourists or business travelers who might ordinarily plan a visit to the host city.
In New York, some hotels realized by mid-autumn that the expected surge in bookings had not materialized, so they began to scale back, in some cases reducing required minimum stays from four nights to two and ending demands for non-refundable room deposits. Rates for the week leading up to the game, which had been at a premium, were dropped back to normal pricing.
Kate Martin, general manager of the Hotel Chandler in midtown Manhattan, said the hotel was only 50 percent booked during Super Bowl weekend, with fewer than usual bookings lined up for the week preceding the game.
"All of the anticipation and the hype about what this was going to bring for hotels in New York City has not materialized," she said.
Part of the problem lies in the tri-state area’s large hotel room inventory, which at 150,000 rooms is at least triple the inventory seen in the past 10 Super Bowl host cities, said Adam Jones, a director at consulting firm PricewaterhouseCoopers. That leaves more lodging options for visitors and makes it harder for hotels to jack up rates.
Still, some hoteliers are more sanguine about the prospect of a football-fueled revenue jump. Langham Place Hotel, a luxury hotel on Fifth Avenue, is approaching the Super Bowl like another holiday, with prices on par with New Year’s Eve at about 20 percent higher than normal. As of two weeks before the big game, the hotel was not yet sold out, with 70 percent occupancy for the days leading up to the game.
"For us, it’s a bit like another holiday," general manager Francois-Olivier Luiggi said. "Suddenly you throw another Thanksgiving in the middle of a cold winter."
Economists say that’s the one bright spot for New York City: The months of January and February are usually the most sluggish tourism months of the year, so it’s possible the game might provide a boost.
Another potential benefit - exposure - could also be muted. While prior host cities in less populated cities, such Indianapolis and Jacksonville, have been enticed by the chance to showcase themselves on a worldwide stage, there’s no evidence that the game has any lasting brand impact for any city, said Smith College sports economist Andrew Zimbalist.
And in any case, more exposure isn’t exactly something New York City needs.
"You can’t say that a Super Bowl is going to put New York on the map," he said.