Unmasking the Financial Burden of Sports Tourism on Communities & Families
The Cost of Doing Business
One time I was at a notable sports tourism industry conference and a to-remain-nameless event owner (EO) from a well-known US Olympic & Paralympic Committee National Governing Body (USOPC NGB) came strolling through the hotel lobby. The individual casually mentioned he could really use a cup of coffee. Then he nonchalantly gazed around the busy lobby and said with zero hint of sarcasm, “Who can I get to buy me a coffee?” He turned to me and smirked.
Within 90 seconds I saw him walking up to the coffee shop line… with a willing destination representative alongside.
It made my stomach turn.
Now, I’m not naïve enough to believe this little story is a representation of the declining moral compass of all sporting EOs in the industry. I know many wonderful EOs who would never do such a thing. I do believe that true story is a microcosm for a larger industry issue at hand.
Let’s not forget, it takes two to tango and the other half of the equation is that, often, destinations are all too willing to tango. Afterall, many of them have significant – if not bloviated – budget line items for things such as “client engagement”, “travel and entertainment”, and “marketing”.
“Wine and Dine”. The “Cost of Doing Business”. Call it whatever you want. I understand that—as with any business development and sales efforts—it’s part of the gig.
Here’s the thing… more commonly than not, our sports tourism budgets for these types of things come from a different place than a private sector company. They come from restricted revenue generated by tax dollars. Those are public dollars, not private. It does not matter if they were generated by sales tax, tourism improvement districts (TIDs), or lodging tax revenue. It’s still generated by publicly assessed sources.
Let’s take it a step further.
Often the same EOs mooching double pump soy lattes off destinations are commanding sizeable bid fees from the same communities to host their events (see my thoughts on why that is in a recent article).
This is Dip #1: Rising bid fees.
Bid fees—or fees paid by destinations to host sporting events—have only grown and they are exorbitant in some cases. They can be either cash or value-in-kind (VIK), which offset operational expenses for the EO. Even a $5,000 bid fee is a big deal for a small market! And hosts of mega sporting events such as the Olympic Games and FIFA World Cup face fees towering above a hundred million dollars by the time you add in costs incurred to host such gargantuan events.
With growing funding mechanisms at the local and state levels, and an expectation of financial return in economic impact, markets often elect to bear the burden. Certainly, there is a measurable return on bid fee investments in some circumstances. But not all.
And that’s only the first layer of the equation.
Dip #2: Hotel kickbacks from “Stay-to-Play”.
When said event comes to town, you can bet your bottom dollar that the *most savvy* EOs are working with a third-party housing company to negotiate, in some cases, lucrative kickbacks in the form of hotel rebates and commissions. These incentives can be flat fee dollar amounts per room (for example, $5 or $10, or even $20 for every room booked), or percentages based upon room number “pick-ups” (3% on a room’s rate, for instance).
This scenario is commonplace across all levels of sporting events, but the impact is magnified at the youth and amateur sporting event level, naturally, where parents are forced to stay in tournament approved hotels in a ridiculous model known as “Stay-to-Play”.
Are hotels just eating those losses when they cut a check to the EO? Not a chance. They are passing it on to moms and dads trucking little Susy all over the country because they are certain she’s getting a scholarship to play volleyball at Penn State.
So, to be clear about who is paying the EOs for these kickbacks: It’s the participants and families. The sad part is that many parents are none-the-wiser.
Most would stop there, with evidence of EOs double-dipping the market through the combination of rising bid fees and hotel kickbacks, with a side shot of often undisclosed pain for parents’ credit card balances. Still, for the fun of it, let’s take it one step further.
Dip #3: Escalating participation costs for, well, everything.
The Life of a Youth Travel Sport Family
Here’s where things can go really hog-wild. I wish the scenario I’m going to share below was pure hyperbole, and it may be for some, but for others it’s the stark reality. Take it as you wish, it’s meant to paint a picture of the pressure put on parents and the illusion that the current system creates…
You’ve likely already taken out a second mortgage to get Susy a private coach so she can make that $1,000+ travel team and a sports psychologist to keep her head in the game. Fancy uniforms, because we can’t have them look like parks and rec kids out there. Then there’s registration and travel for all those tournaments, none of which are likely taking place in your own community.
But to be the best, you have to play the best. Plus, you wouldn’t want Susy to question your love for her or her undeniable, once-in-a-generation talent. Load up the minivan – or better yet, fly your family of 5 to Timbuktu over Thanksgiving. Everyone else is. And it’s on the team calendar, which by this point has complete control over your life.
And those tournament registration fees? Well, you guessed it, they’re only going up and up and up as well. You know, because we’re creating “experiences” for these kids. Championship rings, commemorative t-shirts, custom highlight reels, live-streaming, digital player profiles, in-game analytics… all those fancy bells and whistles completely necessary for the miniscule chance of a scholarship at worst, or a “well-rounded” kid at best.
You guessed it, you’re paying for all that too, in egregious registration fees, travel expenses, and on-site upselling.
That’s just for one kid, one team, one sport.
Before you know it, you’re carrying your overly exhausted kiddos in from the minivan at 10:37pm on a Sunday night, crashing face first into bed, and waking to your alarm to start a busy Monday morning like you got slammed by a weekend Mack truck. But you’d do anything for your kid’s dream.
Sorry to be blunt here but check out our article about private equity in youth sports if you don’t believe me.
Flipping Back to the Sports Tourism Industry
Flip back to our industry role, here we are, watching and participating in a Triple Dip that is further widening the chasm between the “haves” and “have nots” in sport right before our very eyes.
And to think, we have the audacity to wonder why participation is declining in key demographics.
I know I’ll hear the argument that these events contribute to economic impact in a community and generate tax revenue and create jobs. They do. In cases. And the research on that is sketchy.
(For reference, in academia, the economic impact research horse is, well, dead. Cost-benefit analysis (CBA) is much the preferred method of evaluation. Funny how things change when you must take costs into account as well…)
Alas, that doesn’t support the narrative, so it’s never been widely pushed in the industry for that matter. And those pesky room night totals? Yeah, that’s an industry salesperson’s commission check hanging in the balance… and EOs’ future rising bid fee outlined in Dip #1 above. Hence, both sides are highly incentivized to report overly positive numbers.
I really applaud the recent Industry Confidential piece in PUSH magazine discussing the financial imbalance in the destination/EO relationship. I especially like the offering of solutions. The only problem is, they have no incentive to change. Just give up revenue out of the goodness of their hearts in the name of “fairness” or “balance”? Not likely. Recall, private equity is flooding the market.
Sidebar: Check out my take on the solutions offered in that piece and their viability.
So, we’re left with 3 Dips underpinning the financial burdens imposed by the way the business of sports tourism is currently conducted. Yet we’re shouting from the rooftops about the “power of sport” in our communities, while—if we’re honest—we’re contributing to the very foundation of the problem by creating space for and perpetuating this dynamic.
“Not so” you say? Well, let me remind you that EOs pay for nearly nothing to be hosted at industry tradeshows.
- Registration = Covered
- Hotels = Covered
- Travel = Stipend (at minimum)
- Food & Alcohol = Covered by the conference and more-than-willing destinations
- Fun = Covered
- A room full of gifts and swag? Oh yeah, that too.
Their only requirement? Show up to some 7-minute appointments and a party. Sounds rough.
19th Hole with Stoll
Don’t take this brutally honest article as a knock only on EOs. It’s not. Remember it takes two to tango and it has taken not only event owners, but also destinations and an entire industry ecosystem 30+ years to cultivate and perpetuate this cycle.
However, it’s 2025. We cannot continue to operate the industry the way it’s always been done. If we do, we will be front row spectators—or even participants—in its demise. It is not sustainable and the very cost—besides our credit card balances—are all the kids that are left out.
Harsh? Maybe. Reality? I think so.
- Fact: Sport participation is decreasing.
- Fact: Population is decreasing.
- Fact: Participation costs are increasing.
- Fact: The wave of new facility development will subside.
- Fact: Kids and adults in the US are facing increasing health crises.
- Fact: Markets can only bear so much hotel average daily rate (ADR) pushing.
- Fact: Travel and sport consumer behavior is changing.
- Fact: The current system is not set up for sustainability.
- Fact: The industry’s business transaction has barely changed in 35 years.
The solution? Nothing short of pure reimagination.
There is power in sport, indeed, when leveraged toward its intended purpose to serve as a force for good. That power diminishes when our motives are manipulated and selfish ambition creeps in.
Sports tourism has its role, and it is an important one. But along the way we have sold out the essence of the industry. We’ve spent more time talking about the importance of what we do than we have taking action to be a part of the solutions to real problems plaguing the industry, and by extension, an entire generation of kids.
Lest we fall victim to being triple dipped into oblivion, it’s time to lace up our shoes and reimagine! The whispers from the corners of the room are growing louder, and not just in our industry. Will you be a part conversations leading to solutions?
Until next time, for the love of all things good, let’s stop being George Costanza!
Evoke a thought.
Check out our additional resources offering solutions for the industry:
- Creating Community Through Sport, Cimarron Global Solutions’ publication dedicated entirely to the great people and ideas that are working.
- Our four part Fixing Youth Sports, Again series analyzing the current state of youth sports and highlighting several destination-level programs that are making measurable differences in their communities.
