Measuring the impact of the European Capital of Culture programme on overnight stays

What is it about?

This study explores the effects of the European Capital of Culture (ECoC) on tourism demand, measured as overnight stays, for the years 1998 to 2014. The analysis includes 34 ECoC hosts and makes use of data on approximately 800 European cities. A difference-in-differences propensity score matching estimator shows that hosting the ECoC leads to an increase in overnight stays of eight per cent on average during the year of the event but does not stimulate tourism demand in subsequent years. To account for deviations in the distribution of tourism inflows between ECoC and other cities, the quantile difference-in- differences estimator is used. This leads to similar but somewhat stronger results, especially for the year of the event and for the year after. Separate estimations of ECoC host reveal that there is a certain degree of heterogeneity in the effect. Long-term impacts can only be observed for a small group of cities (Essen, Guimarães, Salamanca and Tallinn).

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Why is it important?

Event planners often argue that hosting the ECoC leads to a long-term increase in tourism demand, and stimulates urban regeneration, city branding and economic development. Thus, destination marketing organisations and local stakeholders increasingly use major cultural events as an important opportunity to market cities and attract tourists. Cultural tourists are particularly regarded as desirable tourists because they are well educated and spend more money than other types of tourists. Ex-post evaluation of the ECoC is important because the national or local government, EU structural funds or a mix of these sources largely fund the event. In the last 20 years, on average the ECoC budget has been about EUR 40 million for each city.

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