Was The Super Bowl Really Worth $347 Million to Houston?
The economic impact report for Houston’s Super Bowl is out, and the numbers are staggering. But are they legit?
In many ways, Houston’s Super Bowl was a tremendous success. On the field, it was perhaps the most exciting game in the 51-year history of the event. The weather was perfect, the mild Texas winter providing a comfortable respite for visiting fans and media. For locals and visitors alike, the events at Discovery Green and throughout the Super Bowl Live experience offered engagement with the event regardless of whether they could afford a (minimum) four-figure ticket to the game itself. Taylor Swift had a good time! So did Sting, The Goo Goo Dolls, Travi$ $cott, and the other entertainers who visited and performed for the crowds.
That meant that a whole bunch of money was spent in Houston over the course of nine days in February. How much money? Well, the Houston Super Bowl Host Committee is glad you asked. They commissioned an economic impact report from Pennsylvania-based Rockport Analytics, which valued the event at $347 million. That’s a staggering figure. It’s more than SXSW 2016 ($322 million) or the Austin City Limits Festival ($277 million)—though it’s less than the figure cited by the Houston Livestock Show and Rodeo, which commissioned its own report to come up with a figure of $475.4 million in 2010. It’s also more than the estimated impact of Super Bowl 50 on the San Francisco Bay Area, which was a relatively tame $240 million.
The figure lines up almost precisely with the “around $350 million” figure the Host Committee estimated back in January. That’s either a nifty coincidence, an indication that the Host Committee should get involved in the futures market, or, perhaps, a sign that the figures in these reports are dubious.
The Super Bowl’s report assesses the gross spending that happened in the city in the two weeks around the game—a total of $428 million—and attempts to separate out the local dollars from the spending of the 150,000 people they say visited the city in that time. (It also attempts to exclude money spent on vendors that aren’t based in Houston, like the Los Angeles-based PR firm the committee hired to help visitors best enjoy the city.) Money spent by locals does get factored into the report, though, in terms of “ripple effect” spending, where people who make money off of the Super Bowl spent that money in Houston on things perhaps unrelated to the event. Put it all together, and wham, you get $347 million.
These things aren’t exactly a hard science. SXSW has commissioned economic impact reports for years that calculate “direct impact,” “indirect impact,” and “induced impact” to ensure that somehow, year after year, even after people on the scene can identify a smaller festival, empty lots that used to host brand activations, and lower rates for event spaces, the economic impact numbers never seem to falter.
None of that is to say that the Super Bowl, SXSW, the Austin City Limits Festival, the Houston Livestock Show and Rodeo, or other events that commission their own reports to boast how economically impactful they are for their host city aren’t significant in terms of the local economy. It’s just prudent, perhaps, to be skeptical of those figures.
Hotels in Houston were mostly (though not completely) full for the Super Bowl, it’s true—but let’s not overstate what that means. According to CBRE Hotels, the Super Bowl’s impact on hotel occupancy is good for roughly a 2 percent increase in the annual rate. As Mother Jones noted before the 2016 game near San Francisco, attributing full hotel rooms to the Super Bowl ignores that tourism tends to be up in warm weather cities during the winter. Packing football fans into a hotel that might otherwise be occupied by people who’d be visiting the Museum District isn’t really a net gain for the city. These numbers get fudged, and nobody really commissions a report that reveals that the event failed to meet expectations.
Still, even with the fuzzy math of an economic impact report, the Houston Super Bowl was a success. The city spent $5.5 million on the event, but city controller Chris Brown estimated before the event that the $11 million in taxes collected directly by the city would more than pay for it. (The Rockport report says that between state and local government, the tax impact of the game was $39 million.) That mitigates much of the handwringing that goes on around mega-events—that they fill the coffers of the wealthy (hotel rates spiked during the event, but most of that goes to shareholders outside of the area) while taking resources away from locals. In this case, it’s more likely that Super Bowl 51 did both.
The impact of Super Bowl 51 on Houston also highlights the significance of events like the Houston Livestock Show and Rodeo, or SXSW and the Austin City Limits Festival in Austin. The numbers touted by all of the events are hard to independently verify. (Houston’s Free Press Summer Fest, which released an economic impact report in 2010, seemed more trustworthy when it announced that the 92,000 people it brought to the city were worth about $14 million in spending.) But if we assume that they’re all inflated in roughly the same way, it becomes clear what value events like the Rodeo, SXSW, and ACL have to Houston and Austin. Cities around the country compete, year after year, with aggressive bids for the chance to host Super Bowls. The Rodeo happens every year and brings in more money, while SXSW annually serves as a recurring pitch to the 85,000 or so people who come to town that Austin is a cool place to live, work, run a business, and spend money. No matter the exact numbers, the Super Bowl seems to have worked out for Houston—but the most impactful events seem to be the ones that are annually in our backyard.