The COVID-19 Pandemic has been devastating to many families across the country, and the prolonged economic effects have resulted in the permanent closures of one in seven businesses across the country according to marketing platform Womply. The Pandemic has also caused events to be canceled during 2020, with some cancellations announced for 2021 as well. While we hear much about how local governments are indirectly affected by lost tax revenues from business closures, we should also not forget these impacts extend to communities that benefit from large events for tourism.
Earlier this year, prior to the Pandemic outbreak in the US, RSG completed a two-part financial study for the City of West Hollywood on the LA Pride Parade & Festival. The LA Pride Parade & Festival (“LA Pride”) is hosted annually in West Hollywood each summer and celebrates the LGBTQ community. The three-day event includes a parade, live concerts, and numerous vendors. LA Pride is one of the largest such festivals in the United States and generates a significant economic impact in West Hollywood and the surrounding area. In 2019, LA Pride attracted roughly 250,000 attendees.
In January of this year, RSG was commissioned to perform a two-part financial analysis on the LA Pride festival and parade for the City of West Hollywood. Our study focused review of the fiscal impacts report prepared on behalf of the nonprofit as well as evaluating the overall fiscal condition of the nonprofit itself. We found that the fiscal benefits for this type of an event coalesce around sales taxes collected and a limited amount of TOT revenues from out-of-town/multi-day visitors. We also compared these revenues to costs borne by the City to provide services to LA Pride, and found that the organization’s fiscal health and efficiency are improving. We made several recommendations to assure transparency and oversight given the City’s long-standing relationship with LA Pride.
If you are interested in commissioning a similar study, inquiries may be directed to Jim Simon at (714) 316-2120 or [email protected].