A recent economic report commissioned by the Seven Peaks Music Festival reported that Chaffee County and Buena Vista sales tax revenues grew in 2020 over the year prior despite the fact that the festival and other major community events were not held last year, cancelled because of the coronavirus pandemic.
In 2020, county sales tax grew by 13.5 percent and the town’s sales tax revenues grew by 16 percent, major increases by any standard.
This information, however, should not be used to imply that the festival did not have a significant impact on the town and county.
What should be noted in reviewing potential economic impacts are the elements involved in the festival as well as all the factors which may be behind local governments’ sales tax bonanzas of 2020 and recent years.
The study by consultant Alan W. Hodges reported that spending by festival participants averaged about $316 for the 3-day event, with total visitor outlay estimated at $3.6 million.
Town officials said the festival just outside the town “has done little to benefit the small businesses in the community.”
One reason for this is that most of the 11,500 attending – some 73 percent – camped out on the festival grounds at the Meadows. What they did spend in the town was on visits to restaurants and bars and activities outside of the music offering.
Economic impact to businesses would likely be higher – or much higher – if the festival were to be held within the town, for example, on Main Street. But this is obviously not going to happen, given the opposition the festival has and is generating from neighbors and nearby property owners objecting to the noise, crowds and traffic the weekend attracts, among a host of other reasons.
The consultant estimated the festival’s economic impact equated to 144 full- or part-time jobs and $4 million in labor income with other financial benefits for the town and county.
No one to date has put together a definitive explanation on the reason for local governments’ sales tax increases of the past few years, and specifcally 2020.
The reasons vary, that local residents did not travel and did most of their shopping at home and that this was the first year online purchasers paid sales tax on goods bought over the internet, tax revenues that made their way back to the municipalities and county.
The contribution visitors made to the sales tax increases is an open question. County lodging tax from 2019 to 2020 grew by less than 1 percent – just $1,936 – from $835,688 to $837,624.
If tourists accounted for a major portion of the increase, it wasn’t because more of them were staying at county lodging businesses, at least not judging by the miniscule year-over-year increase in lodging tax.
Getting back to the festival, another way to look at its impact is the crowd it drew. A survey found that participants were middle aged, well educated and affluent with 42 percent under 40; 83 percent had college degrees; 88 percent had annual household incomes of $50,000 or more; and 56 percent incomes of $100,000 or more.
In terms of crowds, this is a highly attractive demographic, visitors the town and county would love to see coming back for return visits, or from an economic development standpoint, for relocation.
If Seven Peak’s impact is to be measured, all aspects need to be considered, namely who came to the concerts, as well as the economic benefits to the town and county.