NFL Draft

Philly’s NFL Draft totals: $95 million economic impact, not enough hotel stays

The economic impact exceeded some original projections.

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Ed Newton

Clarification appended

Philly’s first NFL Draft resulted in a $95 million economic impact for the city — exceeding original projections by $15 million — but fell short on the expected number of hotel “nights” booked by about 20,000.

The findings are part of a report published today by the Philadelphia Convention and Visitors Bureau in partnership with Temple University’s Sport Industry Research Center. The report found that a quarter of a million people visited Philadelphia for the draft and the three days of events that went along with it. According to the study, direct spending — which is the sum of visitor, meeting planner and exhibitor spending — was $56.1 million, while the overall economic impact was $94.9 million. The CVB originally projected the event would bring in $80 million.

An important note: Of that “direct spending,” $20 million was kicked in by the NFL to finance the event itself, while state and local taxes generated $7.9 million. That’s about a million dollars more than the $6.8 million originally projected.

The report also noted 18,991 hotel “room nights” in the Philadelphia area — 80 percent of which were in the city itself — were booked between April 26 and 29, which translated to an about 89 percent occupancy rate in Center City hotels. But not all those rooms were filled with draft attendees. The draft took place the same weekend as the Penn Relays, the largest college track and field competition in the country.

Ed Grose, executive director of the Greater Philadelphia Hotel Association, had expected the rate to be closer to 100 percent. The number of hotel rooms stays fell well short of original projections — officials estimated prior to the event that 39,000 hotel nights would be taken by draft attendees, meaning hotel room bookings fell short by more than 50 percent.

Jeremy Jordan, a Temple professor in the School of Sport, Tourism and Hospitality Management who led the economic impact study, said the $15 million above estimates was driven by the unexpectedly high number of visitors. About 250,000 people turned out — 50,000 more than projected.

He said they found many NFL Draft attendees who came from out of town either stayed with relatives or friends or day-tripped, leading to the larger number of hotel vacancies.

“So they were here spending money,” Jordan said, “but they didn’t stay for the night.”

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Dan Levy/Billy Penn

April marked the first time Philadelphia hosted the NFL Draft, which combined an outdoor sports festival on the Benjamin Franklin Parkway with the actual the draft on the steps of the Philadelphia Museum of Art. Philadelphia could host the Draft again in 2018. Some NFL insiders, however, have said Dallas is the frontrunner to play host. And sources have said cost overruns caused in part by construction of the elaborate stage and NFL Draft Experience have turned off the NFL.

Today’s report also estimated that “more than 30,000 jobs” were supported by the Draft, however the report indicates that translates to just 914 “full-time equivalent” jobs. Allen Sanderson, an economist at the University of Chicago and skeptic of economic impact reports of big events, told Billy Penn earlier this year jobs are routinely rounded up and exaggerated in these studies.

“If some NFL executive gets in a cab,” he said, “that’s a job.”

Sanderson said he believes a major organization like the NFL would seek a greater share of tens of millions of dollars in spending if that much money was being produced.

“Why on earth if that’s true would they leave that much on the table?” he said. “The answer is they wouldn’t. They’re not leaving that much on the table.”

Jordan noted the economic impact total did not account for disruptions, such problems caused by traffic and construction leading up to the event or Philly residents avoiding spending and other activities in the area because of the draft.

“I think there are always going to be folks who don’t go to a certain part of the city because of an event,” he said. “The end result for us, the economic impact greatly outweighs the displacement.”

The CVB noted in today’s report that the draft attracted visitors from 42 states and more than 1,800 members of the media from across the country. Representatives from the CVB said earlier this year that when the organization calculates “total economic impact,” it’s a combination of three things:

1. Direct spending, or the sum of visitor, meeting planner and exhibitor spending.

2. Indirect spending, or the business-to-business transactions required to satisfy the direct spend (for example, if the organizer plans an opening reception and, as a result, the venue needs to purchase food and beverages from their vendors to host the event).

3. Induced spending, or secondary and third-level impacts of the direct spend and a result of increased personal income caused by the direct and indirect effects (for example, a server gets hired by a catering company to work at the event — the person gets paid and will, in turn, increase spending at local businesses).

The CVB came up with its original $80 million economic impact projection using a Temple University study that suggested the draft had an $80 million “economic impact” on Chicago each year the event was held there.