Richard III economic impact

Assessing the assessment, the council’s “almost £60m” claim explained

The economic benefit to Leicester after the last Plantagenet monarch turned up in a Greyfriars car park was upwards of £59 million. That’s the estimate the city council made in May this year after hiring consultants to report.

How did Focus Consultants and the council arrive at that figure? Hang on to your crown, and follow the guide. These are the first steps:

  • Estimate how many people came to Leicester who wouldn’t have come if Richard III had never been discovered.
  • Figure out the average amount of money that people tend to spend when they come to Leicester.
  • Multiply the number of additional visitors by the average spend.

How many additional visitors came to Leicester?

Visitor numbers are not available for 2014 or the early part of 2015. So the consultants made estimates. Some of the economic data used is commercially sensitive and therefore not open to scrutiny. The figures that are available show:

  • An increase in the number of retail businesses in Leicester of 4.42% between 2011 and 2014 compared with just 0.31 in the region as a whole.
  • An increase in accommodation and food services business in Leicester over the same period of 9.8% compared with 2.56% in the East Midlands.
  • An increase in the number of arts, entertainment and recreation businesses in Leicester of 13.48% compared to 0.4% in the East Midlands.
  • Visits to all city museums and heritage sites were up by 11% in the period from 2011-12 to 2013-14.
  • Hotel occupancy in the city increased by 5% between 2013 and 2014.

That snapshot of selected data looks impressive. Leicester’s economic buoyancy marks it out within the region. It’s especially striking when models suggest that before 2012 the numbers of visitors to Leicester had been falling.

Are these indicators sound? Will the analysis match the tourism industry’s model when that is available? Heather Frecklington, associate at Focus Consultants, thinks so. Though she is quick to point out that no calculation was made into visitor numbers during the week or so of interment activities. As they would relate to a one-off, never to be repeated, event, such figures wouldn’t be any use in planning for the future.

Taking all that into account, and bearing in mind that some of the additional visitors will be from Leicester, Focus estimates that there has been around a 5% increase in visitors to the city between the discovery in 2012 and 2014. It also assumes an increase of 132,000 in visitor numbers for the first quarter of 2015, which represents a 5.2% increase compared with the 2012 baseline.

That leads to a grand total of 830,000 more visitors compared with the baseline of 2012. Most, 88%, are day visitors. Staying visitors total nearly 100,000.

The consultants’ best guess is that at least 75% of the additional visitors came as a result of the discovery of Richard III. So that’s 547,678 day visitors and 74,885 overnight stayers – a total of 622,562.

How much did they spend?

Focus used estimates from a widely used economic activity monitor that calculates tourism spending. In 2013, according to the model, day visitors to Leicester spent a total of £277.9m. There were 8.223m day visitors that year, and therefore on average each visitor spent £33.80.

There were 1.252m visitors who spent at least one night in the city in 2013. They spent a total of £234.2m. That’s an average of £187 for the period of their stay.

Do the sums on that basis and the results are £18.5m for the additional day visitors and £14m for overnight stayers. That’s a total rather short of the £54m claimed. Why? Because money spent locally is still circulating around, producing a number of direct and indirect effects, and inducing other spending.

The calculation used here is to add an additional sum for this multiplier effect on the assumption that for every £1 spent a further £1.80 is generated. But then some of it leaks out of the city, being spent in neighbouring counties, for instance. So the total needs to be reduced by this leakage, estimated at 40%.

It’s that calculation which finally arrives at the consultants’ figure of an additional £54,625,048 in Leicester’s economy because of the discovery of the King in the car park.

So the total is….

But wait. The council claimed almost £60m as the overall figure. Where did the extra £4.5m come from? That’s back to the interment week activities. Focus left them out of its calculations. But since there was clearly an economic impact, though admittedly a one-off, council officials stepped in and filled the gap. The £4.5m figure is their best guess at the impact of all those shenanigans at the end of March 2015.

The overriding question now is whether the benefits from this economic shot in the arm can be sustained. Perhaps Richard-mania was a shortlived phenomenon from 2012 but will now naturally die away. Asked whether Leicester can maintain visitor levels and spending, Heather Frecklington is guarded, but positive. “It’s a reasonable aim to try”.

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