The Economic Impact on Super Bowl Host City Minneapolis
Analyze the economic impact of the Super Bowl on Minneapolis, understanding how major sporting events affect host city economies.
The Super Bowl, a premier annual sporting event, draws national and international attention. Minneapolis hosted Super Bowl LII in 2018, showcasing its capabilities and generating substantial economic activity. The event attracted a large influx of visitors and media. Hosting such a large-scale event creates a ripple effect throughout the local economy, extending beyond immediate game day festivities.
Measuring Economic Impact
Economists measure the economic impact of large-scale events like the Super Bowl by analyzing how new money enters and circulates within a host economy. This analysis categorizes spending into three distinct effects: direct, indirect, and induced. Direct spending represents the initial injection of money into the local economy by visitors and event organizers. This includes expenditures on items such as hotel accommodations, food and beverages, transportation services, and event tickets.
Indirect spending captures economic activity generated as local businesses purchase goods and services to meet increased demand from direct spending. For example, a restaurant with higher sales might increase orders from local food suppliers or hire additional staff. These inter-business transactions contribute to the overall economic footprint. Induced spending accounts for economic activity created when local workers, whose wages increased from direct and indirect effects, spend their additional income within the community. This includes employees using earnings on consumer goods or services. Economic impact calculations assess “additionality,” ensuring only new money brought into the area is counted, subtracting factors like displaced tourism.
Minneapolis Super Bowl Economic Contributions
Super Bowl LII generated an economic contribution for Minneapolis and the surrounding region. The event brought in an estimated $450 million in gross local spending. After accounting for $80 million in displaced tourism, net new spending was $370 million. This net spending led to an estimated $400 million contribution to the Gross Metro Product for the Minneapolis-St. Paul area.
During the 10-day event period, approximately 125,000 non-resident visitors arrived in the Minneapolis metro area. These visitors spent an average of $608 per person per day, higher than typical tourism spending. Their average length of stay was 3.9 days, contributing to sustained economic activity across various sectors. Hotels reported a 98% occupancy rate during the final four days of the event, generating three times their normal revenue for that period.
The economic activity extended to job creation and tax revenues. The Super Bowl supported over 5,490 annual jobs across the metro area and generated more than $273 million in wages. This increased economic activity also resulted in over $32 million in incremental state and local tax receipts. These tax revenues, collected from sources such as sales, lodging, and entertainment taxes, provided a financial boost to government coffers.
Drivers of Economic Impact
The magnitude of economic impact from a large-scale event is influenced by several factors, including the volume and behavior of out-of-town visitors. A higher number of non-resident attendees, coupled with a longer average length of stay and increased daily spending, directly amplifies the financial benefit to the host city. Minneapolis, for example, saw an influx of visitors who spent considerably more than typical tourists, enhancing the overall economic gain.
The capacity and readiness of local infrastructure play a role in maximizing economic benefits. Robust transportation networks, ample accommodation options, and well-equipped venues ensure the city can efficiently handle the surge of visitors and event operations. Local businesses engaging with the event and participating in the supply chain, facilitating indirect and induced spending, further strengthens the economic ripple effect. This includes local vendors providing goods and services to event organizers and businesses serving visitors. A city’s pre-existing tourism infrastructure can also contribute to a more seamless hosting experience.
Beyond immediate financial gains, global media exposure and the potential to attract future tourism and conventions provide long-term economic advantages. The event enhances the city’s image and attractiveness as a destination.