ECONOMIC EFFECT OF THE SALZBURG FESTIVAL
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1 SALZBURG FESTIVAL 2011 ECONOMIC EFFECT OF THE SALZBURG FESTIVAL Study 2011 of the Zentrum für Zukunftsstudien Fachhochschule Salzburg / Dkfm. Bernd Gaubinger
2 Power of the Salzburg Festival as Economic Motor Unbroken: Longer Duration of Stays and Higher Spending Per Day Lead to Rising Effects on Employment and Taxes Overall Economic Effect of the Festival Increased to 276 Million Euros December 21, 2011 (SF): The enormous economic importance of the Salzburg Festival for the region and all of Austria is demonstrated by a study recently conducted by the Center of Future Studies at Salzburg s University of Applied Sciences, led by Dkfm. Bernd Gaubinger. Providing 200 year-round jobs and more than 3,600 summer jobs, the Salzburg Festival is an important employer in the region. Its tax and social insurance contributions alone provide the state with more revenue than the sum of the subsidies paid to the Festival for the same year. However, what is at least equally important for the economic development is that the Festival secures about 3,200 year-round jobs throughout Austria indirectly. The basis for the new study is a poll conducted among Festival visitors in early 2011 (which evaluated about 3,500 usable questionnaires); its results provided the data necessary for calculating the economic effects of the Salzburg Festival. For the first time, not only the dominating group of Festival visitors from outside of Salzburg was questioned, but also the 20% of regional Festival attendees from Salzburg and the neighboring regions in Austria and Bavaria. Unlike other cultural enterprises, the Salzburg Festival bears a double responsibility, one artistic and one for the overall economy, Festival President Dr. Helga Rabl-Stadler emphasized at the final presentation of the study s results together with Dkfm. Bernd Gaubinger. Since its founding, it has been an artistic and economic motor for an entire region. This motor is stronger today than ever: the overall economic effect has grown to 276 million Euros more than ever before! Helga Rabl-Stadler said. Thanks to the effect of taxes flowing back to the government, the Salzburg Festival brings in many times what it costs in subsidies. Dr. Rabl-Stadler was particularly pleased that the Festival was able to enhance its position in the eyes of the audience further. The Festival product is just right: both the number of regular visitors as well as the length of their stay and the guests spending have increased further. More than ever, the Festival is not only an artistic bonus, but also an economic advantage for the city, state and nation, for the taxpayer and for business in Salzburg, but also throughout Austria.
3 High Number of Regular Visitors and an Increase in New Visitors The visitor analysis shows that the percentage of regular visitors among the overall number of attendees has increased in comparison to the last survey (in 2006). Thus, 72.5% of visitors (in 2006: 71%) may be qualified as regular guests of the Salzburg Festival, with 62.6% of them having attended the Festival ten times or more. 8.2% were first-time attendees of the Salzburg Festival in On statistical average, a Festival visitor has attended about 18 times so far. Frequency of Fes-val A2endance "How o=en have you abended the Salzburg Fes$val?" 10 to 19 $mes; 23,4% 20 $mes and more; 39,4% 6 to 9 $mes; 9,9% 1 to 5 $mes; 19,1% First $me in 2011; 8,2% The Festival as an Exclusive Vacation Motivation Asked why they attended the Salzburg Festival, 71% responded that they visited Salzburg only or mainly because of the Festival a decisive indication that the Festival visitors spending constitutes real additional revenue, and that their economic effects could not be generated without the Festival (these are effects comparable to the Guggenheim Museum in Bilbao or the Bayreuth Festival). In the case of 29% of respondents, other motivations (e.g. vacationing, medical treatments or business) also played a role for their stay in Salzburg, in additional to their attendance at the Festival.
4 Festival Visitors Stay Longer than Other Tourists What is structurally and politically relevant for regional tourism apart from the early booking habits important to hotel owners and the independence of Festival visitors from weather conditions is the average length of stay of the Festival visitors from outside Salzburg: this was measured at 7.2 days (in 2006: 7.1 days). This figure is far above the overall average for Salzburg tourism (4.2 days) and especially above that for city tourism (1.8 days). Only 27.3% of Festival visitors stay in Salzburg between one and three days. 42.6% stay between four and seven days. Finally, almost a third of all visitors (30.1%) spend eight days and more during their Festival sojourn in Salzburg. Hotel Nights Increased Once Again Asked where they stayed during the Festival, 59.6% of Festival visitors from outside of Salzburg stated that they found accommodation in the city of Salzburg significantly more than in 2006 (55.3%). 20.7% of Festival visitors stay in the Salzburger Land region, most of them in the villages surrounding the city. While every tenth visitor (9.6%) uses a second home, 5.4% of all visitors attend from their permanent residence (including Bavaria and Upper Austria). Residence of Fes-val Visitors from outside Salzburg "During the Fes$val, where do you stay?" Second Home; 9,6% "Or in "; 4,7% Return to Primary Residence; 5,4% Region of Salzburg; 20,7% City of Salzburg; 59,6% Or in : Surrounding federal states and Bavarian border region
5 About 80% of the Festival visitors live in a hotel or a guesthouse during their Festival stay, and in comparison to 2006 (68.3%), the share of hotels rose again to a level of 69.5%. Most Festival-related overnight stays are booked at the higher-class establishments, of course. Only 3.3% of attendees rent private rooms, while 15.4% stay with friends or in a second home. Choice of Accommoda-on "During your stay, which kind of accommoda$on do you choose?" Private rental rooms; 3,3% Guesthouse, Bed & Breakfast; 10,8% Second home; 12,7% Free stay (e.g. with friends) ; 3,7% Hotel; 69,5% Over half of those questioned (54.2%) spend their Festival sojourn as a couple, 15.9% have two persons accompanying them, and 11.7% of all visitors are single attendees. 39.6% of Festival visitors from outside Salzburg attend only one or two performances. Another 29.7% attend three to four performances, and 25% attend between five and nine performances. The average Festival visitor from outside Salzburg attends 4.2 performances. Regarding the choice of main means of transport to Salzburg, the ever-high percentage of cars (68.2%) has been joined by a significant increase in travelers arriving by train: 18.4% (in 2006: 13.4%). About 12.4% arrive by airplane (in 2006 almost 17.6%).
6 High Rate of Attendance at other Festivals The answers to the question which other festivals our visitors attend reveal the high contingent of festival tourists with several interests, an important segment in cultural tourism. Thus, 70% of all respondents named one or several other festival locations. Bayreuth leads the nominations, with almost a third (31.2%) of Salzburg Festival visitors attending. This is followed by Munich (22.6%), Bregenz (18.6%) and the Vienna Festwochen (12.5%). Other festivals frequently named were Lucerne (8.6%), Reichenau (8.2%), Verona (7.9%), Baden-Baden (7%) and Glyndebourne (5.5%). Higher Level of Spending The special economic significance of the Salzburg Festival is based mainly on the high level of spending of Festival visitors. If the expenditures for accommodation, dining and various other costs (transportation, shopping, services, other expenditures) are added up, this reveals an average spending of about 317 Euros per visitor from outside Salzburg per day. About three quarters of this sum (235 Euros) are spent on accommodation (45.4%) and dining (28.9%). Shopping accounts for 16.9% of it, and the remainder is spent on transportation and other expenses (3.4% and 5.4%). In addition, every visitor spends an average of about 550 Euros on Festival tickets. Daily Expenditures of Fes-val Visitors from Outside Salzburg "Approximately how much did you spend during your last Fes$val visit?" (2010) Other Expenses; 17,03 $ Shopping; 53,61 $ Transporta$on; 10,80 $ Accommoda$on; 143,78 $ Dining; 91,52 $
7 The spending of regional visitors from Salzburg and the neighboring regions reaches an average of 127 Euros and is thus relatively high. Most of this is spent on dining (36.1%), followed by shopping (28.9%) and other expenses (20.5%). Daily Expenditures of Fes-val Visitors from the Region "Approximately how much did you spend during your last Fes$val visit?" (2010) Other Expenses; 25,93 $ Accommoda$on; 6,20 $ Dining; 45,76 $ Shopping; 36,64 $ Total daily expenses: 126,68 Euros Transporta$on; 12,50 $ In summary, this analysis demonstrates the following visitor characteristics: The average Festival visitor from outside Salzburg stays in Salzburg for a week, attending four performances, frequenting a higher-class hotel in the City of Salzburg and spending a total of 2,220 Euros on accommodation, food, shopping and other expenses for the entire duration of his or her stay, plus an average of 550 Euros on Festival tickets. Most people attend Salzburg Festival performances in pairs, but stay in Salzburg during the Festival in groups of three. With an average of 18 previous visits to the Festival, this visitor can be called a long-term regular guest.
8 Overall Economic Effects of 276 Million Euro In estimating the overall economic effect generated by the Salzburg Festival, including so-called indirect profitability, one must distinguish between direct and indirect effects. When ascertaining the direct effects, i.e. the primary effects of the Salzburg Festival, the amount of spending by Festival visitors in terms of accommodation, dining, shopping, transportation etc. is included, as well as expenditures by the Festival (the Festival Fund ) itself, i.e. purchased goods and services as well as personnel costs. Thus, spending by Festival visitors from outside Salzburg in companies in the tourism, commerce, transportation and other sectors lead to an overall spending of million Euros, of which about 73.6 million Euros are spent in the touristic sectors of hotels and gastronomy in other words, almost three quarters of the entire spending of the visitors from outside Salzburg. After subtraction of VAT, this results in a direct overall demand-related effect in all sectors of about 91.2 million Euros, including an additional turnover of 66.4 million Euros for the hotel and gastronomy sectors. Another remarkable fact in this context is the VAT revenue of the government, totaling about 11.3 million Euros. Staging the festival (by the Salzburg Festival Fund) results in a direct, demand-related effect totaling about 34.4 million Euros. Thus, the direct effects of the Salzburg Festival, a total of million Euros, which result from the demand-related spending of the Festival itself and the expenditures of Festival visitors, lead to further, indirect effects of about million Euros via the so-called indirect profitability (a multiplier effect): these are triggered in numerous upstream service and production industries in the regional and Austrian economy. In summary, the overall economic production resp. turnover effect for 2010/2011 totals about million Euros; the largest part of this effect, about 80% (roughly 220 million Euros) benefits the economy of the State of Salzburg.
9 Significant Effects on Employment and Taxes An estimate of the Festival s effect on employment through the volume of production and turnover it generates shows a significant result for the regional economy. Approximately 1,800 jobs are created in Salzburg as a result of the direct effects of the turnover generated by foreign visitors to the Festival alone, the majority of these jobs being in tourism and commerce. Taking the indirect effects into account, the Salzburg Festival generates approximately 3,100 to 3,300 full-time jobs nation-wide, of which 2,700 to 2,900 can be classified as part of the Salzburg economy. It is a fact that numerous companies in the tourism and commercial sector in the City of Salzburg could not maintain their existing full-time jobs without the so-called Festival turnover. The tax effects generated by the Festival were also estimated. The effects in terms of tax resulting from the value created by the Festival (reflux effect) can be estimated at around 36 million Euros, which represents mainly additional revenue from VAT and taxes on wages and income. This figure also includes the payment of taxes by the Salzburg Festival Fund, which amounts to 12.8 million Euros. In comparison, the subsidies the Festival receives from the Federal, State and Local Governments amount to only 10.9 million Euros. The present study demonstrates once again that the Salzburg Festival is an extremely crisisresistant cultural enterprise with a worldwide significance. Its considerable effects on value creation, employment and state finances make it clear that the Festival plays a central role in designing an economic structure geared towards growth and with a high percentage of service companies.
10 The Salzburg Festival in Numbers Direct Effects (Primary Effects of the Salzburg Festival): million Spending by Festival visitors 73.6 million thereof in the hotel and gastronomy sector 11.3 million Government VAT revenues from Festival visitors spending 34.4 million Spending by the Salzburg Festival (purchases, services, personnel etc.) million Direct spending million Indirect spending by upstream companies million Overall Economic Effect: sum of direct and indirect effects Reflux Effect: 36 million total reflux resulting from 23.2 million reflux effects mainly from turnover as well as income tax from Salzburg Festival-induced value creation 12.8 million levies paid by the Salzburg Festival 7.6 million in taxes 5.2 million in social insurance This is balanced by
11 10.9 million government subsidies plus 2.7 million from the Tourism Board Employment Effect: Jobs in Salzburg: o 1,800 in tourism, commerce, gastronomy Full-time jobs throughout Austria: o 3,100 to 3,300 Employees of the Salzburg Festival: o 200 full-time employees o 3,600 seasonal employees during the summer Duration of Stay: 72.5% of the Festival visitors are regular guests, 62.6% having attended the Festival 10 times or more The average length of their stay is 7.2 days (in comparison, the average stage of holidaymakers is 4.2 days and that of the city tourist is 1.8 days) Level of Spending: 317 per day per visitor from outside Salzburg, i.e. more than 2,220 during their average stay 127 per day for regional visitors from Salzburg and the neighboring regions 550 purchase of Festival tickets per visitor
12 INDIRECT PROFITABILITY IN MILLIONS OF EUROS + = + =
13 EMPLOYMENT EFFECT IN NUMBER OF JOBS Rest Österreich
14 TAX EFFECTS IN MILLIONS OF EUROS ,2 18,9 + =
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