How to estimate economic impact and effort in event bidding

When cities consider bidding for a major event, they have to weigh the economic effects and the resource it will take. Do that properly and the go/no-go decision rests on estimates, not enthusiasm. The list below is the checklist I use to structure that work.

What the event brings in

1. Direct Economic Impact (DEI). The immediate boost from visitor and organiser spending on accommodation, dining, transport and logistics.
2. Total Economic Impact (TEI). The broader measure, capturing ripple effects through supplier spending and locally circulated wages beyond the direct spend.
3. Economic Retention (ER). How much of the money stays within the local economy after the event. This is the factor most estimates skip — and the one that decides real benefit. See economic impact versus economic retention.
4. Tourism boost, post-event. Increased visitor spending and tourism revenue in the months and years after the event ends.

What it costs

1. Pre-event infrastructure impact (PEI). Short-term economic effect of construction and preparation — job creation and industry activity while the city gets ready.
2. Return on investment (ROI). Economic return set against the total cost of hosting.
3. Cost-benefit analysis (CBA). The full picture, confirming that overall benefits exceed total expenditure.
4. Leverage ratio. Private-sector investment relative to public funding — who carries the financial burden.
5. Opportunity cost. The value of the projects or investments the city gives up by hosting this event instead.
6. Environmental impact cost. The expense tied to emissions, waste and resource use.

What stays afterwards

1. Post-event infrastructure impact (PI). Long-term value from continued use of newly built or improved facilities.
2. Tax revenue generation. Extra government revenue from sales, income and business taxes on the added activity.
3. Social return on investment (SROI). Wider societal benefit — jobs, cultural value, community development.
4. Human capital impact. Long-term gains from workforce development and higher earning potential.
5. Job creation, in work-years. Total employment across preparation, delivery and ongoing facility operation.

Why estimate all fifteen

Any one factor read alone flatters the bid. A big direct impact hides a big opportunity cost. Strong infrastructure numbers hide weak retention. Estimating the full set is what turns a feasibility study from a sales document into a decision. It is the same logic behind the host city bidding method: cities don't lose bids for lack of money or ambition — they lose by chasing the wrong events, or pitching the right ones the wrong way.

Two of these factors — retention and impact — are where most estimates go wrong, because the headline turnover gets counted as benefit. That is the problem with standard economic impact numbers, and it is worth reading before you trust factor one.

Comprehensive estimation turns a bid decision from a hope into a judgement.

To put numbers on impact and retention for a specific event, the Real Economic Impact calculator runs the estimate the way a feasibility study should.