Tough Mudder economic impact below expectations

The economic impact of April’s two-day Tough Mudder event, while significant, was far less than the $6 million that the company claimed at its one-day military-style obstacle course in March 2015, according to a new Haas Center study.

Santa Rosa County’s share of this year’s estimated $2.75 million impact on the region was about $1.45 million, as calculated by the economic modeling used by researchers to assess the answers of 371 Tough Mudder participants who responded to survey questions.

The accuracy of the study of Tough Mudder’s 2015 event, done by a sports business professor at San Diego State University, has been criticized by several area tourism industry leaders. Still, that study was quoted by county commissioners who voted to award the for-profit, New York-based company $110,000 in financial incentives to return its event to Milton for a second year.

“I’d call the results decent, but not what we were promised,” said Liz Horton, a member of Santa Rosa’s watchdog Tourism Development Council and a marketing executive at Wyndham Vacation Rentals, which specializes in lodging on Navarre Beach. The report showed that only 13 percent of Tough Mudder participants who stayed overnight did so in the Navarre area, where most of the county’s tourist tax money is generated.

Candid counting

The report appears to validate doubts raised by tourism industry leaders about whether county commissioners, led by District 4’s Rob Williamson, should have unanimously approved financial incentives for Tough Mudder that are five times more than the $20,000 recommended by the TDC.

Last month, before the Haas Center study was made public, the Navarre Press reported that the county’s bed tax collections in April rose a disappointing 8 percent, or $14,820, from the same period in 2015. That broke a string of double-digit monthly increases dating back to August 2015, which prompted TDC member Jack Sanborn to label the county’s giveaway to Tough Mudder “a rip-off.” He added, “We paid way too much.”

After TDC members pressed for a more accurate account of this year’s economic benefits from Tough Mudder, county officials required the company to hire locally for the job. The company did as instructed,  commissioning the Haas Center and paying $4,000 for its analysis.

The Haas Center is a business and research arm of the University of West Florida and has done numerous economic-impact studies involving tourism and other industries in the Escambia-Santa Rosa area.

Bright spots

“For events like Tough Mudder, the economic impact only considers the spending of non-resident event participants and spectators,” according to the Haas Center report. “Spending by Santa Rosa residents has little impact because it is a substitute for money they would have likely spent in Santa Rosa County anyway. In addition, local spending by the event producer is included as a direct expenditure.”

Thus the study looked at visitor expenditures on daily purchases, accommodations, merchandise and spending by Tough Mudder employees, among other things.

The positives included:

  • Supporting about 35 jobs while generating $853,873 in direct and indirect labor income.
  • Sparking $117,695 in sales taxes, “largely” in Santa Rosa County.
  • Attracting 4,861 participants and 1,172 other visitors, 87 percent of whom were from “out of town,” according to the report.
  • About 35 percent of participants were from outside Florida, a demographic targeted by the tourism industry hereabout and a potential source of new business.
  • About 75 percent of participants said they are “very likely” to return for Tough Mudder in 2017, if the company holds one in Santa Rosa. Another 17 percent said they are “likely” to return.

But Tough Mudder didn’t accomplish the goal of South Santa Rosa tourism leaders to gain overnight lodging stays in their area. Only 13 percent of those who stayed in overnight accommodations were in Navarre and 4 percent in Gulf Breeze.

Milton got 31 percent of the overnight visitors. But many sought lodging outside Santa Rosa County: 30 percent in Pensacola and 7 percent in Fort Walton Beach.

“We hoped more would stay in Navarre Beach,” Horton said, “But I know my company didn’t get any.”

The Economic Impact Report can be found HERE

The Post Event Report can be found HERE

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