South African Cultural Observatory

South African Festivals Economic Impact Calculator (SAFEIC) Frequently Asked Questions

What does SAFEIC do?

The South African Festivals Economic Impact Calculator (SAFEIC) is a free online tool developed by the South African Cultural Observatory (SACO) specifically for cultural festivals and events. SAFEIC can be used to estimate the economic impact of a festival on a host economy.

Who developed SAFEIC?

The South African Festivals Economic Impact Calculator (SAFEIC) was developed for the South African Cultural Observatory (SACO) by Prof Bruce Seaman from Georgia State University, Atlanta, Georgia, and Prof Jen Snowball, Chief Research Strategist of the South African Cultural Observatory, and a professor at Rhodes University.

What is economic impact?

Economic impact studies attempt to answer the question: ‘If the event had not taken place, what would the loss of economic activity to the impact area have been?’ An economic impact study thus calculates all the additional economic activity that takes place in the region as a result of the event or festival – this includes spending patterns on accommodation, daily expenditure on food, souvenirs and other purchases – excluding tickets.

How much does SAFEIC cost to use?

Nothing! The South African Festivals Economic Impact Calculator (SAFEIC) is a free online tool that can be used by anyone at no cost. It was developed by the South African Cultural Observatory, a research centre and think tank for the arts, culture and heritage sectors and the creative and cultural industries, funded by the Department of Arts and Culture.

What can I use the results for?

The South African Festivals Economic Impact Calculator (SAFEIC) provides an estimate of the economic impact of festivals and events that can be used as part of the monitoring and evaluation process. Results can be used internally for event planning and management, or as part of reports to funders and other stakeholders. Keep in mind, however, that it doesn’t measure the cultural impacts of the event – only the increased spending associated with it.

What kind of events can economic impact studies be used for?

Economic impact studies can be used for valuing all kinds of events and organisations, but they work best when large numbers of tourists from outside the impact area (the town, city or municipality hosting the event) come specifically to attend a festival or event.

What data do I need to run SAFEIC?

The South African Festivals Economic Impact Calculator (SAFEIC) requires that you provide the following data:

  1. Number of days of the festival
  2. Population of the impact area
  3. Total number of attendees
  4. Average accommodation spending per visitor per night (estimation tables available if no survey data)
  5. Average non-accommodation spending per person per day (estimation tables available if no survey data)
  6. Funding or sponsorship from outside the impact area
  7. Total Organiser Earned Revenue

What determines the size of the multiplier?

The size of the multiplier (which determines the size of the indirect and induced impacts) depends on the characteristics of the impact area. Generally, the smaller the area, the greater the amount of re-spending that takes place outside of it (referred to as “leakages” from the system), and the smaller the multiplier. It is thus very important to carefully define the impact area of the study.

How can I calculate visitor numbers?

One of the most reliable ways of determining visitor numbers is the ticket sales method, which can be used if the festival has some ticketed events, and if there is reliable organiser data on the total number of tickets sold. Divide the number of tickets sold by the average number of ticketed events attended per attendee in order to estimate how many people attended the festival. Information on the average number of ticketed events attended can be obtained for conducting a visitor survey. Other methods of estimating visitor numbers are through accommodation providers and crowd counts.

Why is the spending of local residents at the festival not included?

Most economists agree that the spending of local residents, which is likely to have occurred in the impact area anyway, albeit on different goods and services, even if the festival had not occurred, should not be included. This is because economic impact studies try to answer the question: “If the event had not taken place, what would the loss of economic activity to the impact area have been?”

Why is defining the population of the impact area important?

Much of the underlying coding of the South African Festivals Economic Impact Calculator (SAFEIC) is linked to assumptions about the economy of the impact area. While detailed information about the economies of smaller towns and cities is not always available, population size is a reasonable proxy for the size of the economy.

Where can I find information on population data?

Population data is available for free online via Statistics South Africa (www.statssa.gov.za/) for town, municipalities and provinces.

How do I enter population data into SAFEIC?

The South African Festivals Economic Impact Calculator (SAFEIC) requires that you choose between six population size categories, and that you enter the category, not the actual population size: Enter 1 if the population is less than 10 000; 2 if it is between 10 000 and 149 999; 3 if it is between 150 000 and 499 999; 4 if it is between 500 000 and 999 999; 5 if it is between 1 million and 2 999 999; and 6 if the population size is 3 million or more.

How can I calculate the percentage of local residents versus visitors from outside the impact area?

The percentage of non-local audience will be higher, the smaller is the population of the impact area, reflecting the economic reality that smaller economies have smaller populations from which to draw participants in arts programming, be they audience, artists, technical and operational staff, volunteers and active board members, indicating that a greater proportion of any given audience will be from outside the impact area. If you do not have audience survey data, the South African Festivals Economic Impact Calculator (SAFEIC) will enter a default value based on the population category of the impact area.

Why does SAFEIC exclude visitors whose main or only reason for being in the impact area is not the festival or event being studied?

Sometimes, especially in larger cities, visitors to a festival or event are time-switchers’ or ‘casuals’. That is, the festival itself is not the main or only reason for their visit to the city – rather they may have been planning the visit anyway (for example, to visit family or for work-related reasons) or where in the area for something else, and happened to attend the festival. Since their spending is likely to have happened in the impact area in any case, even if the festival had not taken place, they should be excluded from the economic impact calculation. If you do not have data on the percentage of attendees whose main or only reason for being in the impact area was the festival, the South African Festivals Economic Impact Calculator (SAFEIC) will enter a default value based on the population category of the impact area.

How do I estimate visitor length of stay and why is this important?

It is important for visitor spending to know how long visitors stay. SAFEIC allows you to enter the average length of stay separately for visitors in paid accommodation and for visitors who do not pay for accommodation (day visitors, or those staying with friends or family). If you do not have this information, the South African Festivals Economic Impact Calculator (SAFEIC) will use a default value, which is half of the total festival duration, for both groups. In general, the longer visitors stay, the more is their spending and the greater is the economic impact.

How do I estimate the percentage of visitors who stayed in paid-for accommodation and why is this important?

Accommodation spending is often one of the largest visitor spending categories and can thus have a large impact on the host economy. If you do not know the proportion of visitors who paid for accommodation (as opposed to those who stayed with family or friends), the South African Festivals Economic Impact Calculator (SAFEIC) will use a default value of 35% (based on many other festival studies). However, you can over-ride this default value if you have other, credible information (such as from a visitor survey).

How do I estimate visitor spending if I didn’t run a visitor survey?

If you do not have visitor spending averages from a visitor survey, you can find some averages in Appendix 2 of the South African Festivals Economic Impact Calculator (SAFEIC) Guide that have been calculated from the South African Domestic Tourism Survey (Statistics South Africa, 2015). Averages differ across provinces.

Why isn’t spending on tickets included in visitor spending in SAFEIC?

It is much more accurate to count ticket revenue by using organiser data. So organiser income (including income from ticket sales) is included, but as part of organiser spending, not visitor spending. Different economic impact models work differently, but the important thing is to avoid double counting – so if spending on tickets is included as part of visitor spending, it should not be included again as part of organiser spending.

How does SAFEIC include spending by producers (artists) and the media?

Depending on the type of event, spending by producers and media representatives from outside the impact area can make up a significant proportion of overall spending. The South African Festivals Economic Impact Calculator (SAFEIC) allows you to estimate this impact by filling in the number of producers and media representatives involved in the event.

SAFEIC allows you to leave the number of producers and media representatives as zero if:

  • there are no artists/producers or media representatives from outside the impact area; or
  • the organisers cover all the costs of artists/producers.

If you do not have information of producer and media representative length of stay or spending, but wish to include non-local producers and media representatives, SAFEIC will use default values based on the visitor spending data that you have already entered.

What is the “Local Capture Rate”?

Some proportion of spending in the host economy will immediately flow out of the region again. This is because all towns, municipalities, provinces and countries buy goods and specialist services from outside. This is especially the case for festivals taking place in small towns that may attract vendors and performers from outside the impact area, but it also applies to the goods sold by local businesses. In general, the larger and more diverse the economy of the impact area is, the smaller is this immediate outflow. This is referred to in the South African Festivals Economic Impact Calculator (SAFEIC) as the ‘Local Capture Rate’. SAFEIC estimates this based on the population size category of the impact area.

What is the difference between organiser spending and organiser income?

Data on organiser contribution can be obtained from two indicators: organiser income and organiser spending. Organiser income includes earned income from, for example, ticket sales, programme sales, and payments by artists or sellers for venue hire and other services. Organiser income also includes unearned income from sponsorship. For non-profit organisations, one can reasonably assume that organiser income translates into organiser spending. However, many festivals are managed by for-profit events management companies, in which case income is not the same as spending.

Why doesn’t SAFEIC include all of organiser spending in the economic impact calculation?

Just as economic impact does not include spending by local residents because it isn’t “new” money coming into the impact area, organiser spending funded from local sponsorship and earnings from local residents’ spending (for example, on show tickets) is not included. This is because this money was already in the impact area, and is likely to have been spent in the host economy even if the festival or event had not taken place. Another issue is that not all organiser spending takes place in the host economy. If you do not have information with which to estimate the percentage of organiser spending that occurs locally, SAFEIC will use default values based on the size of the impact area.

The economic impact is much smaller than I expected, why is this?

Only “new” money coming from outside the host economy can be included in economic impact. So if a large part of festival spending came from income derived from tickets sold to local residents and local sponsors, that spending merely redistributes economic activity; it does not create new economic activity for the host economy. 

Even if a large part of organiser spending does indeed come from outside the region (via audiences from outside the impact area, and from contributions and grants from outside the impact area), it must still be spent and captured initially within the host economy in order for it to circulate around via the multiplier effect before eventually leaving the area. Smaller host economies that are less diversified, will have lower capture rates and lower multipliers as the initial injection of money leaks out through the purchase of goods and services from elsewhere.

How reliable and accurate is SAFEIC?

The South African Festivals Economic Impact Calculator (SAFEIC) is designed to provide a credible, conservative estimate of the economic impact of festivals and events, based on data input into the SAFEIC by the event/festival organiser. The underlying modelling has been carefully designed by experienced economists. However, it is based on average characteristics of festivals and host economies. So, while SAFEIC can provide an estimate of economic impact, it cannot take the place of a comprehensive economic impact assessment designed specifically for your event.  The results also depend very much on the reliability of the data entered by the person or organisation using the SAFEIC.

Where can I get more information about how SAFEIC works?

The South African Festivals Economic Impact Calculator (SAFEIC) guide is available to download on the website. The Guide gives both a theoretical basis and some practical advice on how to use SAFEIC, with examples from other festivals and events. 

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