Ummm, no, not revenue. Gross or net profit yes.
That revenue is not free money, it requires inputs such as labour, food, power etc which have to be paid from the revenue, and it is that which initiates 'the multiplier', because those inputs are also not free, they have their own costs associated, and they in turn ... you get the picture. Since Stephenson is a professor of economics, rather than calling for his head on the grounds of incompetence, I am going to assume the press misquoted him.
That is not to say that these economic benefit analyses are bulletproof, lets just say they are (more often than not) prepared with an eye to securing a particular outcome.
The context is general economic impact in the area. That assumes a good deal of the capture goes back into the local economy in terms of either increased employment or investment locally. With locally owned/based businesses the model is that increased wages and growth will be funded from the capture. This didn’t happen here. The disruption impact was felt by the community with no lasting upside. The pitch on the event was put up with the disruption and everyone will win. It didn’t happen as only Formula 1 and a hand full of properties of MGM, Caesars and Wynn performed above expectations. Everyone else struggled or lost money with a few smaller operations going out of business.
The costs for lodging and hospitality at the resorts are largely the same event to event. What changes is the depth of staffing which is driven by volume. These are metrics that are constantly tracked. Except for the Saturday occupancy was down significantly for the week year over year. Even on Saturday it was only a couple of points higher than normal. We knew that in real time. The saving grace in terms of stats was the prices were significantly higher at high end properties. Rates at most properties were 4-5 times lower year over year with significant declines in occupancy.
Thousands that were called in were sent home early. As it was considered peak they weren’t allowed to take time off prior. With the exception of construction most of the labor needed specifically from the event was from outside Nevada. In the hospitality sector fewer people worked than would have normally on what is known to be one of the slowest weekends of the year. Nearly all shows closed and the few that remained open lost a significant amount. About 5000 people cast and crew work in that sector. In the economic benefit these losses were not held against what was reported as a gain. IOW they didn’t subtract the bad from the good. Between not working then and the added commute costs of the six plus months I’m out of pocket a grand hard money. Not counting my time, wear and tear on my vehicle and aggravation. There are tens of thousands of us in that same boat.
In terms of benefit to the community they over sold and under delivered. The tone deaf arrogance of Formula 1 and pricing structure has put the long term viability of the event at risk. Sales as are bookings are sluggish thus far. It will be the make or break year. If this year is gangbusters for everyone, unicorns and rainbows, expect to cement it long term. If not expect cement shoes for the event.
