VIRGINIA BEACH, Va. — With several big festivals bringing thousands of people to the Virginia Beach Oceanfront this year, the city had an audit done to evaluate the impact the event had on the local economy — and overall the impact was positive.
The analysis was presented to the Virginia Beach City Council on Tuesday by the Institute for Service Research, a company specializing in market research. The company looked at events, such as the Something in the Water and Beach It! music festivals, to assess the economic impact and return on investment for the city government.
The company found that Something in the Water, the music festival founded by Virginia Beach native Pharrell Williams, generated an economic impact of $26 to $29 million for the city in 2023.
According to Institute for Service Research Executive Director Dr. Vincent Magnini, the festival had a positive return on investment for Virginia Beach this year. For every $1 the city spent, it got a return between $1.04 to $1.18.
Virginia Beach City Auditor Lyndon Remias said those expenditures, tabulated at $1.48 million, included city preparations for the event, clean-up efforts afterward, public safety efforts and more. Magnini said the return on investment was measured using tax revenues and municipal parking revenues.
In addition to the city expenditures, the city had a sponsorship arrangement for the festival.
For the inaugural festival in 2019, Remias said City Council put forth a lump sum of $250,000 grant to organizers as a financial incentive to help attract events to bring revenue to the city. This year, the city took a different approach.
Remias said organizers were allowed to keep up to $2 million that would have otherwise gone to the city as taxes on admissions and meals, and the local portion of sales taxes for activities within the festival’s footprint. But the event only generated $970,000 in tax revenue, so that's the amount organizers were allowed to keep.
In regard to Beach It!, the inaugural festival this year generated an economic impact between $11.3 million and $12.8 million.
It was another positive return on investment for the city, according to Magnini. For every $1 the city spent to help the event, it yielded a return of $1.93 to $2.17, he said. The city expenditures were tabulated at $473,000.
Beach It! generated roughly $350,000 in tax revenue from ticket purchases on-premises and online. In a similar arrangement to Something in the Water, event organizers were allowed to keep up to $1.5 million of those taxes.
The Institute for Service Research report shows a high percentage of attendees said they were likely or very likely to return for another festival: roughly 79% for Something in the Water and 85% for Beach It.
Another inaugural event took over the Oceanfront this summer: Jackalope Fest, an action sports festival that was free to the public.
According to the report presented to City Council, the festival had a negative return on investment for the city. For every dollar the city spent, it yielded a return of 47 to 53 cents.