Experts may debate immediate benefit of hosting All-Star crowds

Just don't tell that to restaurateurs, bar owners, hoteliers and shops

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Gene J. Puskar, Associated Press

VisitPittsburgh estimates Major League Baseball's All-Star festivities, centered around the July 11 game at PNC Park, above, will bring $52.3 million into the region.

By Anya Sostek
Pittsburgh Post-Gazette

Help wanted signs beckon from the window of Olive or Twist on Sixth Street, seeking an experienced bartender and evening server. The street in front of the bar and restaurant is torn up for construction, and the owners are racing to complete expansions upstairs and next door.

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All this needs to happen -- now. With only five days before All-Star Week begins, there's no time to waste if they hope to cash in on the biggest thing in baseball in this town since, well, since the last All-Star Game here a dozen years ago.

"We've always wanted to do a private party room upstairs," said co-owner Matt Smith. "We thought, 'It's now or never.' The All-Star Game really provided us the kick."

His is just one of many businesses on Sixth Street, and hundreds across the region, eyeing a piece of the $52.3 million pie that VisitPittsburgh estimates the All-Star festivities will bring to the region in the form of direct spending by attendees and celebrants. Across the street, Salon NuVo, on the second floor of the Roosevelt building, plans to hand out fliers and cards for discount haircuts to draw street traffic upstairs. Even Kitty Litman, owner of The Coin Exchange, is predicting a 20 percent boost in business. "Anytime you get more people, it's going to be good," she said.

But for all the predictions of a business bonanza -- and counterstudies suggesting those hopes for financial payoff are more hype than real for the region's economy -- the biggest benefit from hosting the All-Star Game in the eyes of many civic leaders is the ability to shine the global light on the "new" Pittsburgh. National and international television exposure, word-of-mouth and other intangibles that come from showcasing a city that's going through a third -- and on the lifestyle front perhaps most important -- renaissance is not something that can easily be quantified.

"The All-Star Game is an opportunity to showcase the assets of southwestern Pennsylvania to the nation and the world, and to encourage those who don't know Pittsburgh -- or who imagine it as it was decades ago -- to take a closer look ... and see first-hand the quality of life we Pittsburghers enjoy," said F. Michael Langley, chief executive officer of the Allegheny Conference on Community Development, the influential economic development group.

"We will be getting the kind of exposure through the media that you can't afford to buy," agreed Bob Imperata, executive vice president of VisitPittsburgh, the nonprofit agency that recently changed its name from the Greater Pittsburgh Convention and Visitors Bureau and is charged with selling Pittsburgh to the world.

If the sun shines and the skyline sparkles, Mr. Imperata is confident he'll be able to wow his guests: big-time convention and leisure travel planners who might be expecting a polluted steel town. Previously, he's found that if he can get people to see Pittsburgh, he can sell Pittsburgh.

"Eighty to 85 percent of the people we bring in to look at Pittsburgh for a meeting or convention site eventually sign a contract," he said.

He's also hoping that even a tiny fraction of the millions of people worldwide who will watch the game on television might eventually decide to vacation in Pittsburgh or even just spend the night here on their way to somewhere else.

It is these sort of intangible benefits that local leaders believe will pay off for the region in the long run. But in the short term, there is ample debate about the immediate, direct impact of hosting a game.

Academic papers examining sales tax receipts in cities that have hosted All-Star games in Texas and California actually show revenue below what would be projected in a normal year.

The authors of the studies speculate that some of the money spent on All-Star games is just a substitute for money that would have been spent anyway. Buying drinks at a Sixth Street bar, for example, isn't a net increase in regional spending if that patron spends every Tuesday night drinking at Downtown bars.

The authors also speculate that All-Star games "crowd out" other events that might have otherwise generated economic activity. "No one in their right mind would schedule a wedding in Pittsburgh that weekend," said Victor Matheson, an economics professor at the College of the Holy Cross in Worcester, Mass., who studied the California sales tax numbers.

Dennis Coates, who is an economics professor at the University of Maryland-Baltimore County and conducted the study into Texas sales tax receipts, speculated that the most profitable sports "mega events" would be the ones in a city where not much else is going on. For example, he said the Super Bowl in Detroit this year would probably have a large economic impact since not many people vacation in Detroit in February.

Mr. Imperata of VisitPittsburgh said his group tried to be fairly conservative with its spending estimates, accounting for only direct spending through a formula devised by the Destination Marketing Association International.

After an event takes place, VisitPittsburgh attempts to assess whether its projections were accurate. Mr. Imperata said that for the Senior Olympics, their accounting showed that the event exceeded the prediction of about $30 million in direct spending.

For All-Star Week, the $52 million figure includes everything from hotel rooms to taxi rides to the money that a baseball card exhibitor spends to rent a booth at FanFest.

The single biggest item is hotel rooms, accounting for about 48 percent of out-of-town expenditures, said Mr. Imperata.

For example, another Sixth Street business, The Renaissance Hotel, has been sold out for the three prime All-Star nights for more than two years. It expects to increase its revenue on hotel rooms about 33 percent from a normal Monday and Tuesday, and 50 percent from a normal Sunday.

The hotel also plans to make money on additional room service, restaurant sales and banquets, and hopes to drum up future business when television viewers see the distinctive architecture of the hotel rising behind PNC Park.

"People are going to be sitting around the country, watching the TV, and thinking, 'Oh, there's the Renaissance,' " said Tom Hemer, the hotel's director of sales and marketing.

Like the Renaissance, many other Pittsburgh businesses also are hoping their All-Star business translates into future growth.

Cranberry-based Penn Telecom has been scrambling for the last month to install new telecommunications infrastructure in PNC Park and surrounding areas. To provide journalists and broadcasters with phone and Internet connections, the company laid more than a quarter-mile of fiber-optic cable into PNC Park and hooked up more than 500 phone and Internet lines.

Rich Kushner, who heads marketing operations, believes that Penn Telecom is the first non-national telecommunications company to wire a stadium for the All-Star Game. Assuming everything goes well, the company is hoping to use that accomplishment to expand to major events beyond Western Pennsylvania.

"This will give us exposure to a larger audience than we would have been exposed to," he said. "Some of the larger corporations can look at Penn Telecom and say that we can handle large-scale telecommunications needs."

At Olive or Twist, where eight people work on a typical Tuesday, about 25 people will work the night of the All-Star game, including some permanent new hires.

The owners will open a new bar, tentatively called the Miller Time Tavern, in the building next door to Olive or Twist, which they also own. They expect that both the bar next door and the new upstairs lounge will stay open past All-Star Week.

"As far as the All-Star Game goes, for us it's not just an opportunity to make money but to take that money and invest it and grow our business," said Mr. Smith. "The All-Star Game affords us the opportunity to expand."


Anya Sostek can be reached at asostek@post-gazette.com or 412-263-1308.


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