Visitor Economics. Tourism economics

Tourism drives 10% of global GDP. Yet it is planned in silos. Living Lab connects the dots.

We align policy, investment and delivery into one strategy. OECD-aligned. In 80 countries.

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One visitor economy. Nine connected domains.

Airports & Routes

Public Transport

Sports & Live entertainment

Cultural Venues

Convention & Event District

Sponsor Activation

Hotels

Short term rentals

Entertainment Economy

Living Lab answers “what should we do next?” not just “what happened?”

How does it work?

Step 1

Connect

Most governments begin with event portfolios and expand from there. We layer in visitor economy data: event calendars, route schedules, hotel supply, venue capacity, infrastructure plans and policy objectives. We need the decisions you are making and the data behind them.

Step 2

Model

Living Lab integrates your data with proprietary datasets covering 80 countries and 200+ cities: hotel demand curves, air connectivity economics, fiscal frameworks, visitor spending profiles and employment multipliers.

Step 3

Decide

You receive evidence base structured for every department that touches the visitor economy. Finance reads fiscal return. Tourism reads visitor demand. Transport reads connectivity. Planning reads infrastructure economics. One model, one methodology, one set of assumptions – readable by every team

6 ways Living Lab strengthens government decision-making

Cross-departmental alignment

One model. One truth. Every department reading from the same evidence base.

The visitor economy spans tourism, finance, transport, culture, trade and urban planning. In most governments, each department commissions its own studies, uses different consultants and arrives at different numbers. The result is contradictory evidence, wasted time and decisions made in isolation from their consequences. Living Lab eliminates this problem. One integrated model produces outputs for every department: fiscal return for treasury, visitor demand for tourism, connectivity data for transport, employment figures for economic development and infrastructure economics for planning. Every output is internally consistent because it is drawn from the same source.

Fiscal return intelligence

Economics, Tax revenue and jobs across 50 sectors

Finance ministries do not make decisions based on gross economic impact. They need fiscal return: the tax revenue generated relative to the public money invested. They need net figures after displacement, leakage and additionality adjustments. They need sensitivity ranges that show what happens if assumptions change. Living Lab reports fiscal contribution as standard. Every engagement produces the numbers a treasury requires to approve, defend and audit public expenditure on the visitor economy. Gross headline figures are available for communications purposes, but the decision-grade output is always net, always conservative and always assumption-transparent.

Event portfolio optimisation

Manage your MICE, sports and cultural calendars as one strategic economic asset.

Most cities manage events in silos. The convention bureau optimises MICE. The sports authority bids for tournaments. The arts council programmes festivals. Nobody models how they interact: which events cannibalise each other’s hotel demand, where calendar gaps leave infrastructure idle, which combination of events across all three sectors maximises total economic return. Living Lab treats the event calendar as a single portfolio. The platform models interactions across MICE, sports and cultural events to identify the programming mix that delivers the highest fiscal return, strongest employment effect and most efficient use of venue and hotel capacity. The output is a calendar strategy, not a collection of individual event assessments.

Public investment appraisal

Economic cases for infrastructure, venues, routes and policy that survive scrutiny.

Venue expansions, convention centre builds, air route subsidies, hotel development incentives and transport upgrades all require economic justification. The question is always the same: does the public investment generate a return that justifies the use of taxpayer funds? Living Lab models public investment economics across the full visitor economy system. A venue investment is not assessed in isolation – it is modelled against the event demand it enables, the hotel nights it generates, the air connectivity it supports and the fiscal return it delivers over 10, 20 or 30 years. The output is an investment case that planning boards approve, treasuries defend and audit offices sign.

Employment and jobs intelligence

Employment is the metric that matters most to citizens and to the elected officials who answer to them. Living Lab models employment effects across the visitor economy at city level: direct jobs in hospitality, events and transport; indirect jobs in the supply chain; induced jobs supported by household spending. Employment multipliers cover 88 countries and are validated against national statistical frameworks. The output tells you how many jobs a hosting decision, route subsidy or infrastructure investment creates – and which sectors and skill levels they sit in. This connects visitor economy strategy to labour market policy and skills development, making the case for tourism investment in the language economic development agencies speak.

Audit-grade methodology

OECD-aligned. Built for the audit office.

Every Living Lab output includes a full assumption trail, sensitivity analysis across low, medium and high scenarios, and source documentation for every multiplier and data input. The methodology is OECD-aligned and designed to meet the requirements of national audit offices, finance ministries and Big 4 accounting firms. We are explicit about additionality, displacement, leakage and counterfactuals – the four areas where most economic impact claims fail under scrutiny. The conservative, net-impact approach means the numbers Living Lab produces are defensible in parliamentary committees, treasury reviews and public accountability proceedings. Governments that use Living Lab do not find themselves defending inflated claims.

Living Lab Manage the visitor economy as a system.

Book a briefing with Living Lab. We will walk you through the platform and show you how your visitor economy performs as a connected system – and where the unrealised value sits.

FAQ - Living Lab for governments

1. How does Living Lab’s cultural event impact analysis differ from standard economic impact models?

Standard input-output models produce a single backward-looking multiplier. They cannot model event cannibalisation, hotel displacement, seasonal effects or portfolio-level interactions between cultural events. Living Lab is purpose-built for the visitor economy: we model forward-looking scenarios across your full cultural calendar so you can test programming decisions before committing public funds. Where generic models answer ‘what happened?’, Living Lab answers ‘what should we programme next?’

2. How does Living Lab conduct a cultural event economic impact study?

We require four inputs per event: dates, location, operating expenditure and international visitor count. Living Lab combines these with proprietary datasets covering hotel demand, air connectivity, fiscal frameworks and visitor spending profiles across 200+ cities. Once the data is ready, most single-event arts economic impact studies are delivered immediately unless a bespoke document format is required. Multi-event arts economic impact studies are similar. Forecast studies depend largely on the complexity and scale of the project and data but plan for four weeks from sign off.

3. What does a cultural event economic impact study cost?

Pricing depends on scope. A single-event hosting analysis is priced differently from a multi-event portfolio assessment or a full infrastructure life cycle model. Living Lab offers annual platform licences tiered by city count, event volume, and data modules, as well as standalone advisory engagements. We scope pricing on a briefing call so the engagement matches what you actually need to decide.

4. Can event owners and venue operators commission a cultural event economic impact study independently?

Yes. Event organisers, venue operators and rights-holders use Living Lab to prove economic value to host cities, justify public subsidy, negotiate with arts councils and demonstrate ROI to sponsors and stakeholders. The methodology is the same whether the client is a government or an event owner. The difference is which outputs each buyer needs: governments focus on portfolio optimisation and fiscal return; event owners focus on proving the value their programming delivers.

5. Is Living Lab’s methodology auditable by finance ministries and national audit offices?

Yes. Every output includes a full assumption trail, sensitivity analysis (low, medium, high scenarios) and source documentation. The methodology is OECD-aligned and designed to meet the requirements of national audit offices, finance ministries and Big 4 accounting firms. We are explicit about additionality, displacement, leakage and counterfactuals: the areas where most economic impact claims fall apart under scrutiny.

6. How many countries and cities does Living Lab cover?

Living Lab operates across 80 countries and 200+ cities, with particular depth in the Gulf, Europe, Asia-Pacific and the Americas. If your city is not yet in our system, we can typically onboard it within the scoping phase. Our international coverage is built to the same methodological standard as our core markets: OECD-compliant and audit-ready at every level.

7. What does cultural event portfolio optimisation involve?

Cultural portfolio optimisation is the process of managing a city’s full cultural calendar as a strategic economic asset rather than a list of individually funded events. Living Lab analyses interactions across your portfolio: which festivals cannibalise each other, where calendar gaps leave hotel inventory idle, which art forms attract the highest-value international visitors and where the fiscal return per pound of public investment is strongest. The result is a calendar that maximises total economic contribution, not individual event attendance.

8. How does Living Lab compare to IMPLAN for cultural event economic impact analysis?

IMPLAN is a general-purpose input-output modelling tool built for the US domestic economy. Living Lab is purpose-built for event and tourism economics, covers 80 countries at city level and delivers forward-looking portfolio intelligence rather than a backward-looking multiplier report.

9. What outputs does a Living Lab cultural events engagement deliver?

A standard engagement produces GDP contribution (direct, indirect, induced), employment supported (FTE), fiscal return to government, hotel room-nights generated, visitor spending analysis and portfolio-level scenario modelling. All outputs include assumption documentation, sensitivity ranges and source references. Reports are structured for ministerial briefings, grant submissions and treasury papers, not press releases.

10. Can Living Lab model the economic case for a new festival or venue investment?

Yes. Forward-looking scenario modelling is core to the platform. We can model the economic case for a new festival, a venue expansion or a change in cultural programming strategy, including incremental visitor spend, hotel demand effects, air route activation and fiscal return. We also model cannibalisation risk against your existing calendar and displacement effects on the host city. The output is a decision-grade business case, not a marketing brochure.

FAQ - Cultural event tourism and economic impact

1. What is a cultural event economic impact study?

A cultural event economic impact study measures the contribution of festivals, exhibitions, performances and cultural programming to a host economy. A rigorous study goes beyond attendance figures to quantify GDP contribution, employment, fiscal return, hotel demand and supply-chain effects. The best studies are OECD-compliant, assumption-transparent and built for government scrutiny: not a headline number, but a decision-grade economic case that can withstand audit.

2. What is the economic impact of arts and culture?

Arts and culture generate significant global economic impact, contributing over $2.25 trillion in revenue and supporting nearly 30 million jobs worldwide. Cultural and creative industries (CCIs) act as major drivers for tourism, local business revenue, and innovation, with U.S. arts and culture activity alone reaching $1.17 trillion in 2023.

Key economic impacts include:

Job Creation & Economic Activity: Nonprofit arts organizations alone generated $151.7 billion in economic activity in 2022, supporting 2.6 million jobs and providing $29.1 billion in tax revenue.
Tourism & Ancillary Spending: Cultural events, museums, and festivals drive tourism. Attendees spend an average of over $30 per person per event on dining, parking, and transportation, which boosts local commerce.
Sector Growth: Arts and cultural economic activity has grown faster than the overall economy in recent years.
High Self-Employment: The sector supports high rates of self-employment, with artists and creative professionals being 3.6 times more likely to be self-employed than other workers.
Innovation: The creative sector drives innovation with strong links to other sectors like digital media and design, such as in web publishing and gaming.

This sector is considered a strategic investment for economic, social, and environmental outcomes, providing a resilient, high-growth, and, often undervalued, component of the global economy.

3. How is a cultural event economic impact study conducted?

A credible study requires event-level data (dates, location, attendance, expenditure), robust economic modelling (input-output tables or computable general equilibrium models) and transparent assumptions. The model should account for additionality (what spending would not have occurred without the event), displacement (crowding out of other visitors), leakage (spending that leaves the host economy) and counterfactuals (what would have happened otherwise). Studies that omit these adjustments routinely misstate impact.

4. What is the difference between direct, indirect and induced economic impact?

Direct impact is the initial spending by delegates, exhibitors and organisers within the host economy. Indirect impact captures supply-chain effects: the hotel buys linen, the linen supplier buys cotton. Induced impact reflects the household spending of workers employed through direct and indirect activity. A credible study reports all three separately and is explicit about the multiplier assumptions used to estimate indirect and induced effects.

5. Why do cultural event economic impact figures vary so widely between studies?

Three factors can drive variance. First, methodology: studies using gross output rather than Gross Value Add (GVA) produce larger numbers. Second, additionality: studies that count all visitor spending without removing domestic sourced activity and adjusting for displacement or substitution overstate impact. Third, geographic and economic boundary: whether a study draws its boundaries at national or regional level fundamentally changes the result. A national study captures spending that recirculates across the wider economy; a regional study counts only what stays within the host city or region. The most reliable studies use GVA, adjust for displacement, define their geographic scope explicitly and publish sensitivity ranges.

6. What is seasonal backfilling and why does it matter for cultural programming?

Seasonal backfilling uses cultural events to fill periods of low tourism demand. A festival programmed in a traditionally quiet month can justify air route continuation, support hotel rate stability and generate fiscal return that far exceeds the programming cost. For destinations with pronounced seasonality, cultural events are among the most cost-effective tools for smoothing annual demand curves and improving the economic performance of tourism infrastructure year-round.

7. How should governments measure the return on investment from cultural event funding?

Governments should measure cultural event ROI against the public expenditure used to support events and programming: arts council grants, venue subsidies, marketing spend and infrastructure investment. The return should be expressed as fiscal contribution (tax revenue generated) relative to public cost, not as gross economic impact or attendance. A robust framework also accounts for opportunity cost: what else could the public money have funded, and would that have generated greater economic return?

8. What role does hotel displacement play in cultural event economic impact?

Hotel displacement occurs when an event fills rooms that would have been occupied by other visitors, meaning the net room-night gain is lower than the gross figure. In high-occupancy periods, displacement can be substantial. A credible study models occupancy patterns before, during and after the event to estimate net rather than gross hotel demand. Ignoring displacement is one of the most common sources of overstated economic impact in cultural event analysis.

9. What is additionality in cultural event economic impact measurement?

Additionality measures the economic activity that would not have occurred without the event. Not all visitor spending is additional: some attendees would have visited the city regardless (time-switchers), some are local residents who would have spent money elsewhere in the economy (casuals). A rigorous study estimates the proportion of genuinely additional visitors and adjusts the economic impact accordingly. This adjustment is essential for any analysis intended for government decision-making.

10. How do cultural events support destination development and tourism strategy?

Cultural events serve as anchor demand for destination development: they justify air route investment, underpin hotel development feasibility, fill seasonal troughs in occupancy, raise destination profile and attract high-value visitors whose per-day spend often exceeds that of leisure tourists. For governments developing tourism strategy, cultural events provide predictable, programmable demand that can be planned years in advance, shaped to fill specific economic gaps and aligned to national strategic priorities in ways that leisure tourism cannot.

Living Lab is the tourism operating system for governments, events, cities, and infrastructure owners.

We provide government-grade economic intelligence across MICE, Sports and Cultural events, aviation, accommodation, and public investment — enabling joined-up tourism strategy and destination development.

Core Capabilities

Event economic impact
Economic impact studies
Tourism strategy
Destination development
Visitor economy modelling

Where We Work

80 Countries
226 Cities
MICE events
Sports events
Cultural events
Aviation Route development
Tourism systems
Public investment and infrastructure
Rights holders and hosting

Living Lab Ltd
Registered in the United Kingdom
Company number SC848549

Microsoft Partner

Our economic impact and tourism system models align with OECD statistical standards and support reporting against the UN Sustainable Development Goals (SDGs), including productivity, employment, and sustainable urban development.