Local Festivals and Tourism Promotion: The Role of Public Assistance and Visitor Expenditure

Abstract

Local festivals are increasingly being used as instruments for promoting tourism and boosting the regional economy. This is often reflected in the level of public assistance made available to them. However, it is difficult to assess the extent of the contribution of the festival to local economic growth, and most studies do not examine this issue beyond standard multiplier impacts. This study looks at two local festivals that take place annually in northern Israel. On the basis of detailed data on public assistance and visitor expenditure patterns, it goes beyond the basic impact analysis framework. A method is presented that accounts for net local income increase induced by the festival. The results show modest but positive local growth, suggesting some justification for public assistance for local festivals as a tourism strategy. Policy implications related to increasing the volume of visitors and their spending are discussed.