The Masters: Augusta, Georgia's $120 Million Tournament
The Masters: Augusta, Georgia's $120 Million Tournament
Masters week is significant, especially for a city of 200,000.
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Hey Golfers —
Golf fans from around the world will descend on Augusta, Georgia this week for one of golf’s most iconic events, the Masters.
Augusta, Georgia, is a relatively quiet city for 51 weeks of the year. It is ranked the 116th largest city in the United States, with a population of just over 200,000.
Located on the Georgia and South Carolina border, Augusta is a two-hour drive from Atlanta and an hour drive from Columbia, South Carolina.
Masters week delivers a boom to Augusta. An estimated 200,000 people will travel to Augusta and provide $120 million to the local economy.
The Masters will operate at full capacity of 50,000 patrons per day for the first time since 2019 — a welcome sight for the local economy.
2020: 0 patrons per day
2021: 12,000 patrons per day
Hotel and lodging are some of the biggest drivers of revenue. It is estimated that hotel room prices increase nearly 800% during Masters week in Augusta, generating $26 million of hotel revenue.
Here is a quick breakdown of hotels and lodging in Augusta.
7,200 hotel rooms
4,000 home rental listings
6% lodging tax
$1 per night local fee
$5 per night state fee
Augusta expects hotel capacity to be at 100% for the week, meaning the average hotel room cost is around $500 per night. Hotel tax revenue will net approximately $2 million for the city and state.
The Holiday Inn Express is $899 per night this year; just a month later, it is $130 per night.
An interesting piece of information during Masters week?
Spring break.
Richmond County School System aligns its spring break with the Masters. This allows homeowners to rent their homes for a week while out of town.
For context, a home valued at $350,000 can net a homeowner north of $12,000 in rental income during the week.
Augusta Regional Airport’s traffic skyrockets during the Masters. A plane will take off or land every 30 minutes during a typical week. During Masters week, a plane will take off or land every five minutes. The airport has so much traffic that they need to close a runway to park jets.
Let’s look at how the Masters compares to other golf events regarding local economic impact.
2021 Ryder Cup: $135 million
2019 U.S. Open: $175 million
2019 PGA Championship: $100 million
Let’s take it a step further and see how Masters week compares to other sporting events.
I have learned that the Super Bowl economic impact number is widely disputed among economists. Some even suggest it is a tenth of the number provided below. The 2019 NCAA Final Four games in Minneapolis are used as a benchmark due to covid.
2021 Super Bowl: $477 million
2019 NCAA Final Four: $143 million
Generally speaking, the Masters economic impact is in line with several major sporting events across the United States.
When it comes to the local economy, they aren’t the only ones benefitting from the Masters.
Secondary ticket market prices have nearly doubled from 2012 to 2019. In 2012, the secondary market was $1,338 for tickets; in 2019, that number increased to $2,484 per ticket.
The secondary ticket market produces a significant margin for the seller considering the cost to purchase directly from the Masters.
2022 practice round: $75
2022 tournament round: $115
The economic impact for the Master is significant, especially in a city with a population of 200,000.
Masters week is one of my favorite weeks of the year; I hope you have a chance to enjoy it.
Have yourself a great Monday. Talk to you next week!
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And don’t forget the preferable tax treatment for Augusta homeowners! From Hudson Oak Advisors: “ The Masters Rule - which stems from Internal Revenue Code section 280A(g) - is a unique rule in which homeowners that rent out their property for 14 days or less in a tax year are not considered to be engaged in the activity for profit. This means that any rental income received from a property in which it was legitimately used for rental purposes for 14 days or less during a taxable year may be excluded from taxable income for Federal income tax purposes. State rules may differ.”