State says it cost estimated $1.5 million for July 3 Mount Rushmore event but said state got $2 million in revenue from it

KELOLAND.com Original

PIERRE, S.D. (KELO) — The Mount Rushmore July 3 event cost the state an estimated $1.5 million but has generated an estimated $2 million in revenue, according to the South Dakota Department of Tourism.

The state intentionally estimated the costs on the high side “in the event our federal partners come back to us with any additional costs,” Katlyn Richter, global media and public relations director for the South Dakota Department of Tourism, said in an email response Friday.

The largest cost was $350,000 for fireworks followed by $175,000 for additional costs for the incident management team, labor costs, supplies and equipment. The only other triple digit cost was $125,000 in travel costs for the incident management team.

Here’s a breakdown of costs provided by Richter.

Pre-event planning$60,000
Travel costs for incident management team$125,000
Labor costs$80,000
Supplies $3,500
Equipment$4,500
Contracts$40,000
Fire engines$9,500
Fire engine staff$4,500
Fire engine staff resources$50,000
Fireworks$350,000
Shuttle buses$47,000
Jumbotrons and A/V for jumbotrons$50,000
Additional costs for incident management team, labor costs, supplies and equipment$175,000
A breakdown of July 3 event costs as estimated by the South Dakota Department of Tourism.

The state will be paying the $350,000 in fireworks costs from the state’s Future Fund. The money for the fund comes from a fee paid by businesses, which pay unemployment taxes. The state’s website says the fund is to be used to support workforce development and technical assistance programs, retraining of laid off employees, economic development initiatives, research and entrepreneurial activities.

The state said on July 2 that the fund can be used for economic development and fireworks was an appropriate use.

The state announced on Thursday the July 3 event, which included a visit by President Donald Trump, resulted in $160,000 in immediate tax revenues to the state and local governments.

Richter said on Friday the tourism department along with guidance from Tourism Economic, an Oxford Economics Company, calculated the $160,000 revenue and the estimated $2 million in direct spending as of July 10.

Richter said those are conservative estimates. They are based on the state tourism department’s annual economic impact study.

“To ensure we provided a conservative estimate on spending for food and beverage, lodging, transportation and miscellaneous expenses, the department estimated that at least 10% of the event attendees were locals from the Black Hills Region, 22% were from South Dakota, and 68% were nonresidents,” Richter said.

The attendees residents were based on the states from which people applied for the event lottery tickets, Richter said. The state randomly selected applications for 7,500 ticketholders for the July 3 event.

Travel data shared by Tourism Economics said that 69.3% of the travelers at Mount Rushmore on July 3 were tourists and 56.9% drove more than 200 miles. The data is compiled through monitoring mobile devices. A share of the local drivers were from the Rapid City area on July 3. The numbers change significantly from July 1 through July 6 with 92.98% of the travel by tourists.

The state calculated spending by attendees at $115 per person per day for South Dakota residents that did not live in the Black Hills area. Non-South Dakotans spent $120 per person per day. Those from the Black Hills area spent $54 per person per day.

“We then applied the same factors utilized by Tourism Economics to obtain the visitor spending and the state and local taxes generated as a result of that spending,” Richter said.

Studies and reports on the economic impact of events, tourism and sports completed in various states including Michigan, Indiana and Durham, North Carolina, for example, calculated factors such as overnight stays, meal expenses, tickets, gas and others and various multipliers in a model and formula.

The largest number the state said will be generated from the event is $22 million in advertising benefit. In its Thursday news release, the state said global media covered the event. The number could be low because several broadcast programs covering the event likely had historically high ratings during the coverage, according to the state tourism department’s news release.

Media coverage is translated to advertising dollars in metric, Richter said.

Think of it as if how much the state had to buy advertising on broadcast and print media for the July 3 coverage.

Also, there is value in an attentive audience.

“These are articles and broadcast programming that consumers have chosen to watch or read, this wasn’t an interrupted commercial ad during television program they were watching,” Richter said.

When asked when the state will realize that $22 million benefit or how it will know it’s on track to receive $22 million in advertising benefit, Richter said the state watches such figures year over year.

The tourism department is already seeing signs of the equivalent advertising benefit as there has been a surge to the tourism website since July 3, she said.

The surges are “proof that these consumers were actively engaged in the program and are considering a visit to South Dakota,” Richter said.

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