Can big events affect your establishment?

Analyzing the impact big-draw events of on the revenues of Austin restaurants and bars
Photograph: Shutterstock

Conventional wisdom would lead many to believe that a big event should have a resulting big impact on nearby restaurants and bars. As a provider of bookkeeping and payroll services and software exclusively for the food service industry, Tabulate wanted to study exactly how “big” those events are for Austin, Texas.

Using aggregation that combines data for similar restaurants in the same zip code, Tabulate examined month-over-month trends to discover indicators about how certain areas of a market grow or decline with residential and business traffic. After measuring top-line revenue and bottom-line profits for Austin bars over two consecutive 12-month cycles, it immediately appeared that some Austin events really are bigger than others.

Running the numbers

Four surprising takeaways jumped off the page.

1) South by Southwest (SXSW) is the single biggest annual rainmaker for bars in the immediate Austin area, compared to any other single event.

2) Austin City Limits (ACL), regarded as the city’s other huge event, has an impact, but it’s not nearly as substantial.

3) The University of Texas has a material impact on the city, as Austin is still small enough that school being in session can influence restaurants and bars.

4) University of Texas football home games, to a lesser extent, also appear to play a role in the success of local bars.

Armed with those insights, Tabulate examined the extent of SXSW's outsized success for Austin, how other factors compared and what lessons could be learned.

SXSW and Austin – a match made in revenue heaven

That same conventional wisdom from earlier–that big events mean big money for bars and restaurants–also hints that revenue and profits for restaurants in bars in large college towns should dip in March because of spring break (i.e. a lot of students and staff are away on vacation). While Austin is a destination city, it’s not a traditional spring break spot, so it should be impacted by the exodus of college students.

However, for Austin bars, March is the biggest month of the year, according to the aggregate data. In fact, no single month comes within 30% of March’s top-line revenue numbers–and it’s all because of SXSW.

The profit impact is even more massive, with no month coming within 50% of March profit totals. For comparison, during both years looking at same-store sales, January drew a meager 6% of the net profit that businesses reaped in March. When put under the microscope, the data also holds true at the bar-by-bar level.

Well-run big events in a city can definitely make a difference for restaurant and bar sales and revenue.

In terms of actionable takeaways, there are two big ones:

1) New restaurants should make sure they’re open and have the kinks worked out well ahead of SXSW in March,

2) The Austin Chamber of Commerce should lure a big convention to town in August.

This post is sponsored by Tabulate