Lunar New Year and the Sydney Economy

Have you ever wondered about the economic benefits of Lunar New Year (otherwise known as Chinese New Year) and the impact on businesses? Is it possible to measure the economic impact on the Sydney Region economy? In 2017, the City of Sydney Council reported more than 1.3 million people, both domestic and international, attended the festival and spent $70 million on festival events. The Lunar Lanterns exhibition added  just under $53 million to the Sydney economy.

A review of the literature suggests that more detailed economic analysis has not been done for the Lunar New Year festivals for  the broader Sydney Region.

In 2019, the Sydney Lunar New Year festival is expected to attract over 1.4 million people. With festivities scheduled to take place throughout Sydney there is no doubt that participating businesses will see a spike in retail trade and demand for hospitality services as both domestic and international visitors enjoy the celebrations.

Did you know?

Visitors who travelled on to rural and regional NSW after experiencing 2017 Vivid Sydney, delivered an additional 94,000 room nights into the regions (up 45 per cent on 2016) and $16.6 million in visitor expenditure (up 40 per cent on 2016) (Tourism Research Australia 2018).

Businesses in Dixon Street, Haymarket, the traditional home of Chinese cultural events, have reported between 30-40% increase in trade in the lead-up to the festival and it is expected that the economic benefits will spread across Sydney’s 33 LGAs and beyond as more Councils join in the festivities and host celebratory events in their municipalities.

Additional casual labour, skills and expertise, will be required to meet demand as businesses ramp up production for the 10 day festival. Dumpling production, for example, doubles during the festival.  Demand for fresh food, beverages, catering equipment, entertainment and other goods and services, will generate additional revenues for businesses and income for employees throughout the supply chain. Local economies will also benefit as many festival attendees will travel outside Sydney, stay overnight and spend locally.

Measuring Impact

Measuring the direct and indirect economic impact of this large multifaceted festival, comprising 80 plus events and surrounding tourist magnets, isn’t simple; however, a number of indicators borrowed from other industry sectors are available and provide valuable insights.

The Regional Tourism Satellite Accounts, developed by Tourism Research Australia, is a suitable analytical framework because the Tourism Industry contributes to many sectors including, Accommodation, Transport, Retail trade, Food Services, Arts and Recreation Services and we know that festival attendees book accommodation, purchase food, attend events and consume services.

Destination NSW, in collaboration with other agencies, monitors the “Visitor Economy” and collates information from the annual national and international visitor surveys and publishes site specific data, for example:

  • The number of international visitors to Chinatown in year ended June 2018 was 1.6 million, up 2% when compared to the year ended June 2017.

  • These visitors accounted for 37% of all international visitors that spent a night in NSW.

Methodologies commonly used by not-for-profits and community groups are also useful. For example, counting inputs such as food stalls, sponsorships sold, exhibitor and attendee participation. Whilst it may be easy to measure the number of floats in a parade, sausage sandwiches (onions on the top or bottom), counting inputs and collating consumption rates across a multi-date, multi-location cultural festival  is not always reliable, feasible or cost effective.

Social Media activity and other proxy indicators  such as Facebook, Twitter and Instagram traffic are popular and increasingly acceptable means to measure “consumer engagement and sentiment”.  Interpretation can be subjective and open to manipulation; as is correlating SUCCESS with the status of crowd pleasers, event champions, celebrity MC’s and big name influencers.

Limitation of current measures

What benefits do small businesses accrue from large scale events? Do suppliers of goods and services from outside the CBD gain a benefit?  Can these benefits be measured?

The current suite of evaluation tools is helpful and access to industry insights and reliable data is invaluable however there are limitations with the use of this data and the methodologies as discussed. 

Did you know?

Visitors who travelled on to rural and regional NSW after experiencing 2017 Vivid Sydney, delivered an additional 94,000 room nights into the regions (up 45 per cent on 2016) and $16.6 million in visitor expenditure (up 40 per cent on 2016) (Tourism Research Australia 2018).

First, de-aggregating high level data is expensive and extremely difficult. Whilst in the future, digital impact measurement tools such as Neighbourlytics, Tourism Tracer and Spendmapp may provide solutions, now we must rely on high level data and conventional collection methodologies. 

Second, available metrics don’t easily capture intangible benefits, contribution to livability and long-term value such as capacity building, skills and knowledge acquisition, social benefits, and relationship development; outcomes that are very important to local regions.

Perhaps an analysis of local economic drivers, derived from large scale festivals, requires an integrated approach and the establishment of a new national benchmark and set of metrics.  Not a new idea and one contemplated by Sport and Leisure industry in the UK some years ago (Destination NSW 2016-17 Annual Report).

Event Success and Future Investment

There is a strong correlation between event success, investment attraction and improved economic outcomes. 

Economic Development Australia and local government economic development practitioners support the development of an ‘event impact measurement tool” that is able to capture the direct benefits and the flow on effects of major events at a local level.

This information is not only important for decision makers but essential to attract future investment, tourists and major events to the regions.

2019 Lunar New Year Celebrations

We can say for certain that the economic benefits of the Luna New Year Festival have increased exponentially since the annual festival began in Sydney's Dixon

Street over 22 years ago and will continue to grow as local councils embrace the festival and celebrations spread out across Sydney’s dynamic metropolis  as evident from this year’s calendar of events:

  • Georges River Council is hosting a street parade featuring colourful floats along Forest Road in Hurstville

  • The City of Ryde is celebrating 16 Feb  the highlights include, dragon parade, spectacular firecrackers, cultural dance and fabulous food stalls

  • City of Canterbury Bankstown – is hosting a smorgasbord of activities in Saigon Place.

  • Fairfield City Council – enjoy great food and carnival games, lions and dragon dancing

  • Luna Park – is offering traditional lion dancing performances throughout the holiday

  • Chatswood -  for the first time ever, is hosting a three week long cultural festival

  • Sydney City Council  - too many events to mention – check out the website

DID YOU KNOW?

“In 2017, 2.33 million visitors attended the Vivid Sydney Lights, Music and Ideas programs, positioning Vivid Sydney as the largest event in Australia and the largest festival of its kind in the world. 70,350 domestic travel packages were sold, a 59 per cent increase on 2016” (Development and Evaluation of Economic Development Measures”   University of South Australia Business School, September 2018).   

In the meantime, if you want to try and estimate the impact of the 2019 Lunar New Year in your local area, enjoy a meal at your favorite Asian restaurant, marvel at the lions and dragon parades, put a dollar of two in a red envelope, enjoy the fireworks and ask the chef “How many Dumplings do you hope to sell during the festival?” and perhaps in time for next year’s festival  we can devise a yummy “Dumplings Index”.

For now we wish you all KUNG HEI FAT CHOI and have a cracker of a time!

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