Santa Monica City Council
October 8, 2024

New York | Atlanta | Dallas | Los Angeles | Raleigh | Washington DC Memorandum
To: Susan Cline, Assistant City Manager, City of Santa Monica Susan Cola, Assistant City Attorney, City of Santa Monica Melissa Spagnuolo, Community Partnerships Manager, City of Santa Monica From: HR&A Advisors, Inc.

Date: October 1, 2024
Re: Fiscal Impact Findings – Hosting Beach Volleyball for the 2028 Olympic Games Executive Summary
As a major international sporting event, many believe that hosting the Olympics represents a rare opportunity for cities to unlock significant benefits, while elevating their position on the world stage. Billions of dollars invested in new or upgraded facilities and infrastructure suggest the potential for global recognition, along with a substantial economic boost from international visitation. The Games can also generate an intense sense of local pride and enhance a city’s brand; while the world’s most talented athletes compete for gold and glory, so too does the host city have a chance to shine.

The City of Santa Monica (“the City”) is in discussions to host the beach volleyball events as part of the 2028 Olympic Games, negotiating terms with the Los Angeles 2028 Olympic Organizing Committee (LA28) and its partners. To inform its approach to negotiations with LA28, the City of Santa Monica retained HR&A Advisors (HR&A), a real estate, economic development, and public policy consulting firm, to project the fiscal impacts to the City for hosting Olympic beach volleyball. This memorandum presents draft findings of HR&A’s analysis to date.

HR&A evaluated the potential net fiscal impact that the City would likely expect across two scenarios:
1) if Santa Monica hosts beach volleyball events (the “Event Scenario”), and 2) if Santa Monica does not host beach volleyball events (the “Non-Event Scenario”).

HR&A derived these projections from historic City of Santa Monica budget data, visitor spending reports, estimates for revenues and costs associated with hosting beach events, and insights from impact reports and analyses of major regional events and available data from recent Olympic precedents. While Santa Monica may receive the intangible benefits of hosting beach volleyball events (e.g., civic pride, brand enhancement, earned media etc.), our analysis narrowly focuses on the fiscal revenues and costs the City will face given its unique market, tax, and regulatory environments.

Should Santa Monica host Olympic beach volleyball, the City will utilize the beachfront adjacent to the famed Santa Monica Pier, providing the space for a temporary 12,000-seat venue. More than 30 ticketed events are likely to draw over 450,000 attendees to the city across a two-week span (July 14 – July 30, 2028).

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 2 However, Santa Monica is already successful at attracting tourists and visitors, with millions of tourists visiting every year. In particular, July is one of Santa Monica’s heaviest months for tourism and visitation. While Santa Monica hosts a significant number of daytrip and overnight visitors in a typical month, the potential fiscal impact from spending is significantly greater from overnight visitors. On average, overnight visitors spend between 3 – 10 times as much as a daytrip visitor, with much of that spending directed at overnight accommodations.

Regardless of whether Santa Monica hosts volleyball events on its Pier-adjacent beach, the City should expect a significant increase in visitation in July 2028. In fact, based on HR&A’s analysis, in either scenario, with the number of available hotel rooms and short-term rental options and typical Olympic travel patterns, Santa Monica’s overnight accommodations will reach maximum capacity. If overnight accommodations are at maximum capacity in each scenario, this means that the fiscal benefits from overnight visitors are effectively maximized regardless of whether Santa Monica hosts beach volleyball or not. Projections for visitation are detailed in Figure 1 below.

Figure 1: Estimated Visitation Summary During Olympic Events – Event vs. Non-Event Scenario1 Scenario Daytrip Visitors Overnight Visitors Total Visitors Event 642,000 59,0002 701,000
Non-Event 245,000 53,0002 298,000
Based on this visitation, along with historic visitor spending patterns in Santa Monica, HR&A prepared fiscal impact projections for two scenarios. Summarized in Figure 2 below, the City is projected to incur a net fiscal cost of approximately $1.45 million if it hosts Olympic beach volleyball. Meanwhile, in the Non-Event Scenario, the City stands to receive significant net fiscal benefits, totaling approximately $10.65 million, from increased visitation, with much lower City costs. Taken together, these findings suggest that choosing to host Olympic beach volleyball translates to a net loss of roughly $12.10 million to the City.3 These estimates also include longer-term revenues and costs from beach and parking rentals and parking revenue reimbursement, covering April – September 2028, accounting for the time that these areas will be used for staging and tear down. 1 This table summarizes the total visitors by category from Figure 4, later in the memo. 2 Visitors staying with friends and relatives drive the difference in overnight visitors. We approximate that Santa Monica can accommodate about 50,000 visitors during the Olympic period in hotel and short-term rental options at full capacity. 3 Stated another way, if Santa Monica hosts Olympic beach volleyball events, it will incur approximately $1.45 million in real cost. In addition, it will miss out on $10.65 million in projected net revenues in a scenario in which the City does not host. The additional $10.65 million represents the City’s opportunity cost of the potential revenues it could benefit from if it chooses not to host Olympic events.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 3 Figure 2: Summary of Fiscal Impacts – Event vs. Non-Event Scenario ($2024) 4 Event Scenario Non-Event Scenario Incremental Impacts:

Hosting Events
Revenues $14,090,000 $11,300,000 $2,790,000
Costs ($15,540,000) ($650,000) ($14,890,000)
Net ($1,450,000) $10,650,000 ($12,100,000)
Key Caveats and Uncertainties
It is crucial to note several important caveats and areas of uncertainty in this analysis:

1. Reimbursement Conditions: Our projections assume that LA28 will reimburse the City for certain costs and lost revenues. However, these reimbursements are contingent on LA28 achieving a financial surplus after covering all operational costs and obligations for the City of Los Angeles, the University of California, Los Angeles (UCLA), the University of Southern California (USC), and other venue cities. If LA28 does not achieve this surplus, the City of Santa Monica may receive partial or no reimbursement.

2. Negotiation Outcomes: Final agreements with LA28 on revenue-sharing, reimbursements, facility use, and operational arrangements could significantly alter the fiscal impact.

3. Visitor Spending & Market Implications: Our analysis makes some baseline assumptions about visitor spending during the Olympics:
a. Our analysis assumes that Olympic visitor spending patterns will mirror the typical Santa Monica visitor. Visitors to Santa Monica spend more on average than other visitors to Los Angeles County; therefore, there is already a natural premium built into visitor spending averages. b. We assume maximum occupancy for overnight accommodation across Santa Monica is 95%. This assumption accounts for baseline vacancy, cancellations, staffing limitations, and an inability to turn over rooms fast enough to keep up with demand. In alignment with the point above, we assume hotel rates will match historic average hotel rates for July in Santa Monica. Rates in Santa Monica regularly outstrip average hotel rates across Los Angeles County and are at their peak in July. We do not consider the potential impact of hotel rate negotiations between LA28 and individual hoteliers.
c. We assume that short-term rental (“STR”) options like Airbnb will experience rate increases, based on preliminary projections from the 2024 Paris Olympics. 4 This table summarizes fiscal impact calculations from Figures 12 and 18.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 4 d. As the Pier is a significant driver of economic activity in Santa Monica, our analysis assumes that the Pier will be fully operational. Should security requirements and/or operational challenges force business disruptions at the Pier, this will translate to a negative fiscal impact.

4. Point of Sale: We assume all event-related transactions will occur within Santa Monica city limits; therefore, the point of sale relevant for sales and use tax would apply for the benefit of the City. If the point of sale for LA28-related retail activity is established elsewhere (i.e., in the City of Los Angeles), it could significantly reduce projected tax revenues.

5. Unquantified Costs: Several potential costs are not included in our quantitative analysis due to current uncertainties:
a. Capital infrastructure improvements or new construction needed to host events b. Additional staff time and resources across various City departments leading up to the event c. Post-event site restoration and potential long-term infrastructure maintenance d. Opportunity costs of allocating City resources to the Olympics e. Potential environmental mitigation efforts

6. Foregone Revenue: The City may lose some revenue streams from regular beach-related activities that normally occur during the event period, which are not fully accounted for in this analysis.

7. Paralympics: In addition to the 2028 Olympic Games, the Los Angeles region will also play host to the Paralympic Games. Our study does not include estimates or impacts from the 2028 Paralympic Games since Santa Monica is not slated to host any Paralympic events.

8. Pre- and Post-Olympic Impacts: Our analysis does not account for potential impacts on visitor activity in the periods immediately before or after the Olympic period.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 5 Project Description & Memo Purpose
At the request of City leadership, HR&A Advisors—a public policy, economic development, and real estate consulting firm—has conducted a fiscal impact analysis to understand whether it is advantageous for the City of Santa Monica to host beach volleyball events as part of the 2028 Olympics in Los Angeles. HR&A projected potential fiscal revenues and expenses associated with two different scenarios – one where Santa Monica hosts beach volleyball and another where it does not.

Methodology
To project the fiscal impacts of hosting Olympic beach volleyball events in Santa Monica, we developed methodologies for estimating both revenues and costs across two scenarios:

1. Event Scenario: Includes calculations for increased regional visitation from the broader 2028 Olympics and visitors who are specifically attending the Olympic beach volleyball events in Santa Monica.

2. Non-Event Scenario: Accounts for increased regional visitation due to the Olympics, but without any additional visitation from hosting events.

These methodologies rely on:
• City of Santa Monica budget data
• Visitor spending reports
• Estimates for revenues and costs associated with hosting beach events • Insights from reports and analyses of major regional events and Olympic precedents By considering multiple scenarios and visitor types, we aim to provide a thorough understanding of the potential fiscal implications for the City.

Visitor and Revenue Methodology
To estimate the fiscal revenues generated from hosting Olympic beach volleyball events, we focused on different visitor segments—daytrip visitors and overnight visitors—and assigned spending profiles based on their length of stay in Santa Monica.
5 Drawing from City visitation data, local event precedents, and analysis of previous Olympic events, we understand that daytrip and overnight visitors can fall into one of three identified visitor categories:

1. Regional visitors who are visiting the region for the Olympics and are drawn to Santa Monica as a high-profile destination in Los Angeles County: Santa Monica regularly captures a substantial portion of the County's regional visitation and hotel demand. Desirable locations like Santa Monica capture a 5 See Figures A.9-A.10, A.13, and A.18 in appendices for associated spending profiles.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 6 substantial proportion of hotel demand from large sporting events, such as the Super Bowl, even when events are held in neighboring cities.6 Based on a 4% net annual visitor increase experienced during the 2012 Games in London, we can assume that Santa Monica will experience similar growth for both daytrip and overnight visitors.
7 2. Olympics visitors attending volleyball events: These visitors are traveling with a more targeted purpose, as they have specifically purchased tickets to attend Olympic beach volleyball events in Santa Monica. Per LA28 and the City of Santa Monica, there are 468,000 available tickets for beach volleyball events. Assuming a 98% ticket sale rate (similar to the London Olympics), with 85-87% sold to the public and the rest used for sponsors, stakeholders, and the "Olympic family," we estimate 398,000 unique ticket holders (See Figure A.1 in the Appendix for a more detailed breakdown). 8 Given the competition with
business and non-volleyball visitors, we assume that the proportion of volleyball ticket holders seeking overnight accommodations in Santa Monica would be similar to the city's typical capture rate of hotel demand across Los Angeles County: 3.9%.

3. Business visitors: Visitors who travel to Santa Monica regularly for work-related purposes, such as conferences, meetings, or client engagements. A survey during the London Olympics found that 58% of businesses reported changing their travel plans during the Games to avoid potential disruptions caused by the increased crowds and security measures.9 However, this also suggests that 42% of business visitors maintain their common travel patterns.

Between the three visitor types and two duration types (daytrip and overnight visitors) there are six visitor groups.

These groups were used to estimate the impacts of the Event and Non-Event Scenarios. Figure 3 provides a breakdown of the different visitor categories. Figure 4 highlights how those groups break down into discrete portions of the projected visitor population.
6 Heller & Stephenson 2020, How Does the Super Bowl Affect Host City Tourism? 7 London Tourism Report 2012/13 – London & Partners
8 Olympic family" is a term used to refer to the various stakeholders involved in the Olympic Games beyond the general public and local organizers. This group includes representatives from the government, as well as the International Olympic Committee (IOC), international sports federations, media personnel, athletes and their families, and individuals with VIP/premium ticket packages. 9 Impacts and Lessons from the London 2012 Olympic Games Travel Demand Management Program – an Independent View CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE
HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 7 Figure 3: Breakdown of Visitor Types to Santa Monica During the 2028 Olympics In the Non-Event Scenario, we expect that Santa Monica will capture its current share of regional visitation; however, it will not benefit from the additional visitation that would have resulted from hosting Olympic beach volleyball events.

In both scenarios, Olympic and non-Olympic visitor demand exceeds the likely supply for overnight options within the city. For visitors who are interested in staying in Santa Monica, but cannot find accommodations, we anticipate that they would still visit Santa Monica as daytrip visitors but would find accommodations in other parts of the County. We account for this behavior in Figure 4. For a detailed approach to calculating visitor numbers, see Figures A.1-A.8, A.14-A.16 in the Appendix.

We also include a small number of people who visit Santa Monica and stay with family or friends instead of seeking hotel or short-term rental accommodations. We count these individuals as overnight visitors, though they do not spend on overnight accommodations.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 8 Figure 4: Total Visitors by Category
Traveler Type Non-Event Scenario Event Scenario
Daytrips – Business Traveler 40,000 40,000
Daytrips – Non-Volleyball Visitors 204,000 204,000
Daytrips – Volleyball Ticket Holder 0 381,000
Daytrips – Overnight Demand without Accommodations10 1,000 17,000 Total Daytrip Visitors 245,000 642,000
Overnight – Hotel & STR Visitors – Business Travelers 8,000 6,000 Overnight – Hotel & STR Visitors – Non-Volleyball Visitors 42,000 32,000 Overnight – Hotel & STR Visitors – Volleyball Ticket Holder 12,000 Total Overnight – Hotel & STR Visitors 50,000 50,000
Overnight – Friends & Family Visitors – Non-Volleyball Visitors 3,000 3,000 Overnight – Friends & Family Visitors – Volleyball Visitors 6,000 Total Overnight – Friends & Family Visitors 3,000 9,000 Total Overnight Visitors 11 53,000 59,000
Total Visitors 298,000 701,000
In projecting likely visitation sizes across these groups, we attach spending profiles to each visitor type, projecting estimated visitor spending and the subsequent fiscal revenues. These spending profiles are detailed in Figures A.9-A.10, A.13, and A.18 in the Appendix. We used the City’s current tax rate for sales and use tax, transient occupancy tax, and parking facilities tax and multiplied these rates against projected spending to ascertain fiscal revenues. All revenue projections are presented in 2024 dollars.

Our team reviewed additional data from previous Olympics to consider whether we should treat Olympic visitors as categorically different than the traditional Santa Monica visitor and we found conflicting evidence. While some data indicates that gross spending per visitor increases, those increases can likely be attributed to longer visitor stays. Our analysis has incorporated an assumption that Olympic visitors stay longer than the typical Santa Monica visitor and, as a result, gross spending per visitor increases. In addition, Santa Monica’s per visitor 10 Visitors who want to stay in Santa Monica but cannot find accommodation in either hotels or STRs will still choose to visit as daytrip visitors. 11 In both the Event and Non-Event scenarios, Hotel and Airbnb demand exceeds supply. The difference in the overnight visitors between the two scenarios comes from additional volleyball ticket holders who stay with friends and relatives, as commercial accommodations are at capacity.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 9 spending already represents a premium within Los Angeles County. For example, based on historic data, Santa Monica's average daily rate for a hotel room in July is $382, compared to $196 for Los Angeles County as a whole, suggesting that the average Santa Monica visitor is already paying a premium relative to other locales (hotel spending represents over 50% of spending for overnight visitors).

Cost Estimation Methodology
To estimate the fiscal costs associated with hosting Olympic beach volleyball events, we calculated per-person, per-day cost estimates for each expense category drawing from the adopted FY 2023-2024 budget, including fire, police, transportation management, beach maintenance, and pier management. We assumed an average daily population comprising a weighted estimate of the number of residents, workers, daytrip visitors, and overnight visitors inhabiting the city. We assigned weights to each group based on their expected impact on City expenses:
residents and overnight visitors carry a larger share than workers and daytrip visitors. Altogether, these informed estimates for the number of “person-equivalents” who inhabit Santa Monica on any given day during the Olympic events. The weights and associated calculations are detailed in Figure A.20 in the Appendix.

Using these weighted per-person, per-day cost estimates, we calculated an estimated increase in baseline expenses. For both the Event and Non-Event Scenarios, we adjusted the number of overnight and daytrip visitors to align with the estimations described in the above sections.

In addition to increases in baseline costs, for the Event Scenario, we estimated the costs specific to hosting Olympics beach volleyball events. Drawing from data assembled by the City to evaluate the fiscal impact of the Twilight Concert Series (“TCS”) in 2017, we calculated the per-attendee and per-event costs for various categories, including police, fire, transportation & traffic management, beach maintenance, pier management, and waste management.

The Twilight Concert Series, an annual summer live music and performance showcase on the Santa Monica Pier, provides a useful baseline for estimating event-specific costs. For decades, the popular community event has drawn tens of thousands of visitors to the Pier and oceanfront, occupying one of the most popular visitor attractions in Santa Monica. However, with such dense visitation, the City incurs significant costs to deploy critical services to keep event spaces safe and clean. Olympic beach volleyball events will similarly attract substantial visitation to the Pier and oceanfront and require significant City services to operate safely and effectively.

Still, it is important to acknowledge the key differences between the Twilight Concert Series and Olympic beach volleyball. The Olympics will occur over a longer period (16 days vs. 6), attract a larger number of gross event attendees, and likely capture visitors from the broader regional activities associated with the Olympics. In this sense, the Olympics will likely present a different type of strain on City services which may not translate to a linear increase in projected costs. Despite these differences, we believe the TCS remains a reasonable starting point for estimating event costs. With more event-specific information, and as adjustments are made to account for the unique characteristics of the Olympic beach volleyball events, these projections can be refined.

By combining the (1) baseline City expenses for visitors, (2) incremental increases to baseline expenses from increased visitation, and (3) event-specific costs, we estimate the fiscal costs associated with hosting the Olympic beach volleyball events in Santa Monica. All cost projections are presented in 2024 dollars. This relationship is described in Figure 5 below.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 10 Figure 5: Breakdown of Expense Categories for the 2028 Olympics Other Costs
While our analysis aims to be comprehensive, there are several relevant costs we have not included in our calculations either due to (1) data/information limitations or (2) uncertain terms that are yet to be negotiated. For example, our analysis primarily focuses on operational costs and does not include the capital infrastructure costs necessary to prepare for, host, or repair after Olympic beach volleyball events. At this stage, venue construction and other capital improvement costs are not fully known. Some key costs not included in our analysis are:

1. Capital Infrastructure Costs: Any significant infrastructure improvements or new construction required for hosting the events are not factored into our calculations. These could include:
a. Temporary venue construction or modifications
b. Upgrades to existing facilities to meet Olympic standards c. Improvements to transportation infrastructure
d. Technology and communication system enhancements

2. Additional Department-Specific Staff Time and Resources, including:
a. City Manager's Office
b. City Council
c. Information Services
d. Library Services

3. Event Preparation and Programming

4. Post-Event Costs
In addition to these specific cost categories, there may be other indirect or intangible costs that are difficult to quantify but should be considered, such as the opportunity cost of allocating City resources and staff time to

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 11 hosting the Olympics rather than focusing on other City priorities, the potential quality-of-life impacts to Santa Monica residents during the Olympics, and longer-term infrastructure maintenance or repairs that may arise as a result of hosting events. While they are not quantified here, the City should consider how these additional costs factor into the broader picture associated with hosting Olympic events.

Limitations and Exclusions of the Analysis
It is critical to acknowledge that this fiscal impact analysis delivers projections based on historic visitor behavior in Santa Monica, recent regional event precedents, and Olympic event precedents in other international cities. As forward-looking projections without clarity on many terms relating to revenue, cost-sharing, and/or reimbursement from LA28 or its partners, this analysis has natural limitations. At this stage, our analysis does not account for the potential cost reimbursement inside or outside of the venue. These reimbursements could offset some of the expenses incurred by the City, but with negotiations ongoing, it is unclear who will bear these costs.

Similarly, it is unclear whether security protocols around the venue will cause disruptions to local businesses, namely, the businesses located on the Santa Monica Pier. Our analysis assumes that Pier businesses will continue to operate under normal conditions during the Olympic period. Should they be forced to close, the City would experience a significant and negative fiscal impact.

Also, this analysis does not account for the revenue generated or costs incurred from renting out City facilities for Olympic activities outside of the beach volleyball events (e.g., use of recreation, school, aquatic facilities for training). Since LA28 and the City are likely to negotiate facility use as part of a separate agreement, we have chosen not to include it in this analysis.

Additionally, the analysis does not consider the potential impact of individual hotel rate negotiations between LA28 and individual hoteliers. We are assuming that rates will be held at levels consistent with historic Santa Monica hotel performance in July (already representing a significant premium over Los Angeles County rates).

This assumption does not apply to short-term options such as STR, for which we anticipate a significant average rate increase. We do not anticipate LA28 negotiating rates for short-term rental options; therefore, such shortterm rental accommodations are likely to experience significant rate increases. We use projected rate increases for STR options in Paris for the 2024 Olympics as an assumption for likely rate increases in Santa Monica.

Furthermore, this analysis does not account for potential impacts in the periods immediately before and after the Olympics. These impacts could include disruptions from event setup and tear-down activities, which may affect local businesses and traffic patterns. Additionally, the analysis does not consider potential fluctuations in regular tourism patterns, such as possible depressions in visitor numbers leading up to the Games. For example, during the Paris Olympics, attendance at the Louvre dropped by 45% in the two weeks prior to the Olympic Opening CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE
HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 12 Ceremonies.12 These factors could have notable effects on the local economy and municipal operations outside the specific timeframe of the Olympic events.

Finally, this study does not include the impacts of other events affiliated with the 2028 Olympics, which may take place in Santa Monica. At this stage, those events are unknown, and therefore, it is difficult to understand the associated fiscal impacts. Our study does not include estimates or impacts from the 2028 Paralympic Games since Santa Monica is not slated to host any Paralympic events.

Revenue Analysis
Key Revenue Assumptions
Our revenue projections are based on several critical assumptions that could significantly impact the final fiscal outcome for the City of Santa Monica. It is important to highlight these assumptions to provide context for our analysis and to identify areas that may require further negotiation or clarification with LA28.

1. Point of Sale for Event Transactions: This analysis assumes that all transactions related to the Olympic beach volleyball events, including ticket sales, merchandise, and concessions, will have their point of sale within Santa Monica city limits. However, it is important to note that in some past events held in Santa Monica, the point of sale was established in Los Angeles or other locations, resulting in a loss of tax revenue for the City of Santa Monica. If a similar arrangement were to occur for the Olympic events, it could significantly impact the projected tax revenues for Santa Monica.

2. Potential Loss of Regular Revenue Streams: Hosting the Olympic beach volleyball events may result in the City losing some typical revenue streams generated from beach-related activities. Our analysis accounts for potential losses including:
a. Revenue from TV/movie filming and photography permits at the beach b. Income from commercial surf instruction and camps
c. Beach concession rental payments
d. Revenue from contractor-led classes held at the beach, including beach volleyball camps and classes

3. LA28 Payments and Reimbursements: Our analysis assumes that LA28 will make certain payments and reimbursements to the City, including13:
a. Rent for beach use (approximately $740,000)
b. Rent for parking lot use (Lot 1550, approximately $1.8 million) c. Reimbursement for lost parking revenue (approximately $2.4 million) 12 The Art Newspaper, “Louvre Visitor i ures Plummet durin Paris lympic disruption,” 20 August 2024. Confirmed by several other publications.
13 Estimates provided by City of Santa Monica.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 13 However, it is crucial to understand that these payments and reimbursements are contingent upon LA28 achieving a financial surplus after covering all operational costs and obligations for the City of Los Angeles, the University of California, Los Angeles (UCLA), the University of Southern California (USC), and other venue cities.

This arrangement introduces an element of uncertainty into our revenue projections, as the City may only receive partial reimbursement, if any at all, if LA28 does not achieve its expected financial outcomes.

These assumptions underscore the importance of the negotiations with LA28 to establish concrete agreements on revenue-sharing, reimbursements, and operational arrangements. The final fiscal impact for the City of Santa Monica could vary significantly based on the outcomes of these negotiations.

Event Scenario
In the Event Scenario, we project that the city will experience a significant increase in visitors from both Olympic beach volleyball attendance and increased visitation across Los Angeles County. Santa Monica is already a popular tourist destination, and the added attraction of an Olympic event would contribute to a surge in new visitors. We expect that each of the six visitor types outlined in the methodology section will drive spending activity during the 2028 Olympic Games. The total visitor estimates are detailed in Figure 6.

For daytrip and overnight visitors, we drew from historic spending by visitors to Santa Monica and inflated to current dollars. We also adjusted hotel spending for overnight visitors since average rates are historically higher in July than most other months throughout the year. These assumptions formed individual spending profiles for daytrip and overnight visitors, which are detailed in Figures A.9-A.10, A.13, and A.18 in the Appendix.

Figure 6: Event Scenario – Number of Visitors by Type
Visitor Type Number of Visitors
Daytrip Visitors 642,000
Overnight Visitors 59,000
Based on the anticipated number of visitors and their likely spending habits, this translates to the total spending by visitor group totaling over $112 million, detailed in Figure 7 below. Overnight visitors comprise most of the overall spending because they spend significantly more than daytrip visitors.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 14 Figure 7: Event Scenario – Total Estimated Visitor Spending by Category14 Categories
Total Estimated
Spending from Daytrip
Visitors ($2024)
Total Estimated
Spending from Overnight
Visitors ($2024)
Relevant City of Santa
Monica Tax
Lodging $0 $49,600,000 Transient occupancy
Meals $9,000,000 $15,900,000 Sales and use
Beverages $4,700,000 $8,300,000 Sales and use
Shopping / Gifts $6,900,000 $12,100,000 Sales and use
Local Transport. / Parking,
etc.
$1,200,000 $2,400,000
Parking Facilities
(only 50% of spending)
Amenities (Health,
Wellness, etc.)
$100,000 $200,000 Sales and use
Groceries / Other Items $700,000 $1,200,000 Sales and use Subtotal $22,600,000 $89,700,000
Total $112,300,000
This visitor spending translates to substantial revenues for the City by way of sales, transient occupancy, and parking facilities taxes. In addition, the City would receive rent from LA28 for use of the beach and Lot 1550 ($2.5 million) and reimbursement for foregone parking revenues (roughly $2.4 million). As outlined in Figure 8 below, we project that Santa Monica would generate over $14 million in revenue during the 2028 Olympic Games period.

Figure 8: Event Scenario – Total Estimated Fiscal Revenue by Source Revenue Source Estimated Fiscal Revenue ($2024)
Sales Tax $1,200,000
Transient Occupancy Tax (Hotels & Motels) $6,300,000
Transient Occupancy Tax (Homestay/Short-Term Rental) $1,300,000 Parking Facilities Tax $350,000
Beach Rental* $740,000
Parking Rental* $1,800,000
Reimbursement for Lost Parking Revenue* $2,400,000
Total $14,090,000
*Assumes LA28 reimburses the City of Santa Monica
14 Lodging subject to Transient Occupancy Tax (15% for hotels & motels, 17% for home shares); meals, beverages, shopping/gifts, and amenities subject to Sales Tax (2%); local transportation/parking subject to Parking Facilities Tax (10%).

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 15 Non-Event Scenario
In the Non-Event Scenario, the city is still likely to experience a significant increase in visitors, albeit less so than in the Event Scenario, drawing only from an increase in regional visitation throughout Los Angeles County. Since Santa Monica is a popular tourist destination, it will capture a healthy share of regional visitation. Our analysis assumes a capture rate (11%) that reflects Santa Monica’s historic share of Los Angeles County visitation.

The number of visitors estimated in the Non-Event Scenario is detailed in Figure 9 below. These visitors have similar spending profiles as those outlined in the Event Scenario, which are detailed in Figures A.9-A.10, A.13, and A.18 in the Appendix.

Figure 9: Non-Event Scenario – Number of Visitors by Type Visitor Type Number of Visitors
Daytrip Visitors 245,000
Overnight Visitors 53,000
Based on the anticipated number of visitors and their likely spending habits, this translates to the total spending by visitor group, totaling just over $95 million, detailed in Figure 10 below. Overnight visitors comprise a majority of the overall spending because they spend significantly more than daytrip visitors.

Figure 10: Non-Event Scenario – Total Estimated Visitor Spending by Category Categories
Total Estimated
Spending from Daytrip
Visitors ($2024)
Total Estimated
Spending from Overnight
Visitors ($2024)
Relevant City of
Santa Monica Tax
Lodging $0 $49,600,000 Transient occupancy
Meals $3,500,000 $14,800,000 Sales and use
Beverages $1,800,000 $7,700,000 Sales and use
Shopping / Gifts $2,600,000 $11,300,000 Sales and use
Local Transport. / Parking,
etc.
$500,000 $2,000,000
Parking Facilities
(only 50% of spending)
Amenities (Health,
Wellness, etc.)
$0 $200,000 Sales and use
Groceries / Other Items $300,000 $1,100,000 Sales and use Subtotal $8,700,000 $86,700,000
Total $95,400,000
This visitor spending translates to substantial revenues for the City by way of sales, transient occupancy, and parking facilities taxes. In the Non-Event Scenario, the City would receive the parking revenues it typically receives from operations (roughly $2.4 million) and rent for beach events based on typical revenue trends (roughly $160,000). Combined, we project that Santa Monica would generate over $11 million in fiscal revenue during the length of the 2028 Olympics, without hosting beach volleyball events, as shown in Figure 11.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 16 Figure 11: Non-Event Scenario – Total Estimated Fiscal Revenue by Source Revenue Source Estimated Fiscal Revenue ($2024)
Sales Tax $890,000
Transient Occupancy Tax (Hotels & Motels) $6,300,000
Transient Occupancy Tax (Homestay/Short-Term Rental) $1,300,000 Parking Facilities Tax $250,000
Beach Rental Revenues $160,000
Parking Lot Revenues $2,400,000
Total $11,300,000
Incremental Revenues from Hosting
We estimate the City of Santa Monica will stand to receive an additional $2.79 million in fiscal revenue if it chooses to host beach volleyball as part of the 2028 Olympics.

Figure 12: Incremental Revenues
Revenue Scenario Estimated Fiscal Revenue ($2024)
Event Scenario $14,090,000
Non-Event Scenario $11,300,000
Incremental Revenues $2,790,000
Cost Analysis
To estimate the fiscal costs associated with hosting Olympic beach volleyball events in Santa Monica, we evaluated the Event and Non-Event Scenarios, informed by baseline daily cost estimates derived from the most recent City of Santa Monica budget and adjusted for the expected number of visitors during the Olympic period.

Setting a Baseline
Using the most recent City of Santa Monica budget (Adopted Budget, FY 23-24), we established a baseline daily cost for delivery of select City services. Notably, we worked with City staff to categorize budget items as fixed or variable costs, focusing on variable costs that could be directly affected by a temporary increase in the visitor population (the share of costs considered variable is located in Figure A.21 in the appendix.) This portion of the City’s costs were then multiplied by the city's likely inhabitants on any given day, including residents, workers, and visitors. Using census data and tourism statistics, we determined that Santa Monica hosts approximately 170,000 CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE
HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 17 people (91,000 residents, 64,000 workers, and 15,000 daily visitors). 15,16 However, we adjusted the proportion of
costs associated with workers and daytrip visitors as their interactions with City services are less substantial.

Overall, we projected rou hly 118, “person-equivalents”, or the number of people who inhabit Santa Monica on the average day, adjusted for the amount of time they spend in Santa Monica on that day. We divided the daily cost allocation by weighted total of “person-equivalents” to arrive at a per-person, per-day cost estimate of approximately $5, as shown in Figure 13. More detail on the weighting approach in Figure A.20 is included in the Appendix.

Figure 13: Baseline Costs Based on FY 2023-2024 Approved Budget Cost Category
FY 2023-2024
Variable Costs
Daily Allocation
(FY 2023-2024)
Per Person Per
Day Costs (Daily
Allocation)17
Police & Fire ($117,241,726) ($321,210) ($2.72)
Traffic & Transportation ($59,850,025) ($163,973) ($1.39) Beach Maintenance ($8,940,867) ($24,496) ($0.21)
Santa Monica Pier ($5,520,729) ($15,125) ($0.13)
Waste Management ($14,229,826) ($60,248) ($0.51)
Total ($205,783,173) ($585,052) ($4.96)
We used these per-person costs to calculate the additional costs to the City resulting from an increased visitor base during the Olympic period in both the Event and Non-Event Scenarios, multiplying the number of visitors (weighted) against those estimated daily costs.

Event Scenario
The Event Scenario accounts for the increased number of visitors to Santa Monica from hosting Olympic beach volleyball events, in addition to increased regional visitation from throughout Los Angeles County. Using the same visitor weighting approach as the baseline and accounting for the increased visitors calculated in the revenue section, we arrived at a daily population of almost 135,000 “person-equivalents,” with roughly 16,000 as visitors.

When applying our estimated per-person, per-day costs against the adjusted visitor population and extended over the total event duration (16 days), we estimate the elevated baseline costs for the Event Scenario to be approximately $1.19 million. This is further detailed in Figure 14 below. 15 American Community Survey, 5-Year Estimates
16 Santa Monica Travel & Tourism, 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary 17 The Per-Person Per-Day Costs (Daily Allocation) is based on a 'person-equivalent' calculation. This approach weights individuals based on their typical daily presence in the city and adjusts for the different impacts that residents, workers, and visitors have on city services. For a detailed breakdown of this calculation, please refer to Figure A.16 in the Appendix.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 18 Figure 14: Elevated Baseline from Hosting 2028 Olympic Beach Volleyball Events Cost Category Estimated Elevated Baseline Costs ($2024) Police & Fire ($680,000)
Traffic & Transportation ($300,000)
Beach Maintenance ($50,000)
Santa Monica Pier ($30,000)
Waste Management ($130,000)
Total ($1,190,000)
This recalculation of baseline costs is necessary because the increased influx of beach volleyball and regional event visitors will place additional demands on the City's resources and services.

In addition to the baseline per-person, per-day cost calculations, we estimated the costs specific to hosting Olympic beach volleyball events, drawing from fiscal impact estimates compiled by the City for the 2017 Twilight Concert Series. To calculate the overall costs, we took the average of two estimates:

1. Per-Event Basis: Dividing costs by the number of events

2. Per-Attendee Basis: Dividing costs by the number of attendees According to that data, the average cost per attendee for the TCS is approximately $38 ($2024), covering expenses such as public safety, transportation, beach management, and pier management. To calculate the total event costs, we can multiply the cost per attendee derived from the TCS by the projected total attendance for the Olympic beach volleyball events (453,960), resulting in a total event cost of $17.7 million.

The average cost per event for the Twilight Concert Series was $275,000 ($2024) and multiplying this by the total number of Olympic events, we estimate a total event cost of $10.95 million as shown in Figure 15.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 19 Figure 15: Event-Specific Costs Based on Twilight Concert Series Cost Category
Cost per
Attendee
($2024)
Cost per
Event
($2024)
Total Estimated
Olympic Event
Costs Based on PerAttendee ($2024)
Total Estimated
Olympic Event
Costs Based on PerEvent Costs ($2024)
Police & Fire ($22.13) ($150,000) ($10,000,000) ($5,900,000) Traffic & Transportation ($1.06) ($10,000) ($480,000) ($310,000) Beach Maintenance ($0.68) ($5,000) ($310,000) ($200,000) Santa Monica Pier ($14.46) ($110,000) ($6,600,000) ($4,200,000) Waste Management18 N/A N/A ($340,000) ($340,000)
Total ($38.33) ($275,000) ($17,730,000) ($10,950,000)
Average Olympic Event Cost ($14,340,000)
Both the number of events and the number of attendees are likely to inform overall event costs, and using an average of these two methods provides a more balanced estimate that accounts for both factors. Since some costs are more closely tied to the number of events (i.e., setup and teardown costs), while others are more dependent on the number of attendees (e.g., security staffing, waste management), an average helps to capture the relevant fluctuations associated with each set of cost projections. Additionally, using an average mitigates extreme estimates by not relying solely on either the per-event or per-attendee basis, which could potentially lead to over- or under-estimation of costs. The average estimate between the per-attendee and per-event approaches is approximately $14.34 million, as detailed in Figure 15.

Combining the baseline event costs and the event-specific costs, we arrived at a total cost estimate of approximately $15.54 million for the Event Scenario as shown in Figure 16. 18 The Twilight Concert Series produced 15 tons of trash but did not provide a cost. To calculate the cost of waste management, HR&A estimated the total gallons of trash produced during the Olympics and multiplied it by the commercial rate to empty a 65-gallon trash bin.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 20 Figure 16: Event Scenario Costs
Cost Category
Estimated Elevated
Baseline Costs
Average Olympics
Event Costs
Total Estimated
Costs
Police & Fire ($680,000) ($7,950,000) ($8,630,000)
Traffic & Transportation ($300,000) ($400,000) ($700,000) Beach Maintenance ($50,000) ($260,000) ($310,000)
Santa Monica Pier ($30,000) ($5,400,000) ($5,430,000)
Waste Management ($130,000) ($340,000) ($470,000)
Total ($1,190,000) ($14,350,000) ($15,540,000)
Non-Event Scenario
The Non-Event Scenario anticipates an increase in visitors as a result of the Olympic presence in Los Angeles County even without the additional boost in visitation from hosting Olympic beach volleyball. Using the baseline per-person, per-day cost, we calculated the additional costs incurred by the City due to the increased number of visitors during the Olympic period without beach volleyball events. Using the same visitor weighting as the baseline and visitor data estimated in the Event Revenue Scenario, we arrived at roughly 8,000 daily visitors. We multiplied this estimate by the per-person, per-day costs and extended over the total event duration. This produces a baseline cost estimate of approximately $650,000 for the Non-Event Scenario. This calculation is further detailed in Figure 17.

Figure 17: Non-Event Scenario Elevated Baseline Costs
Cost Category Per Person-Unit Per Day Costs19 Estimated Elevated Baseline Costs ($2024)
Police & Fire ($2.72) ($340,000)
Traffic & Transportation ($1.39) ($200,000)
Beach Maintenance ($0.21) ($30,000)
Santa Monica Pier ($0.13) ($20,000)
Waste Management ($0.51) ($60,000)
Total ($4.96) ($650,000)
19 The Per-Person Per-Day Costs (Daily Allocation) is based on a 'person-equivalent' calculation. This approach weights individuals based on their typical daily presence in the city and adjusts for the different impacts that residents, workers, and visitors have on city services. For a detailed breakdown of this calculation, please refer to Figure A.20 in the Appendix.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 21 In the Non-Event Scenario, other undefined costs such as those detailed on pages 9-10 of this memo (e.g., unknown costs of capital, labor, remediation, etc.) would likely be lower than in the Event Scenario, as the City would likely commit fewer resources than it would if hosting Olympic beach volleyball events.

Incremental Costs from Hosting
By comparing the costs associated with the Event Scenario and the Non-Event Scenario, we can understand the impact to the City for hosting Olympic beach volleyball events. In the Non-Event Scenario, the City can expect higher-than-normal operating costs from the influx of regional visitors who are spending time in Santa Monica.

When hosting Olympic beach volleyball events, however, Santa Monica can expect baseline operating expenses to increase beyond those of the Non-Event Scenario, plus additional event-specific expenses the City will have to bear to ensure that events can occur safely. Altogether, we expect the City to bear close to $14.89 million in additional costs as a result of hosting Olympic beach volleyball events.

Figure 18: Incremental Costs from Hosting 2028 Olympic Beach Volleyball Events Cost Category Event Scenario
Non-Event
Scenario
Incremental Cost
from Hosting
Police & Fire ($8,630,000) ($340,000) ($8,290,000)
Traffic & Transportation ($700,000) ($200,000) ($500,000) Beach Maintenance ($310,000) ($30,000) ($280,000)
Santa Monica Pier ($5,430,000) ($20,000) ($5,410,000)
Waste Management ($470,000) ($60,000) ($410,000)
Total ($15,540,000) ($650,000) ($14,890,000)
Incremental Impacts
Summarized in Figure 19 below, the City is projected to lose approximately $1.45 million if it hosts Olympic beach volleyball. Meanwhile, in the Non-Event Scenario, the City stands to receive significant net fiscal benefits from increased visitation, with lower costs. Taken together, these findings suggest that choosing to host Olympic beach volleyball translates to a net loss of roughly $12.10 million to the City. 20 20 Stated another way, if Santa Monica hosts Olympic beach volleyball events, it will incur $1.45 million in real cost. In addition, it will miss out on $10.65 million in projected net revenues in a scenario in which the City does not host. The additional $10.65 million represents the City’s opportunity cost of the potential revenues it could benefit from if it chooses not to host Olympic events.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 22 Figure 19: Incremental Impacts from Hosting 2028 Olympic Beach Volleyball Events Event Scenario Non-Event Scenario Incremental Impacts:

Hosting Events
Revenues $14,090,000 $11,300,000 $2,790,000
Costs ($15,540,000) ($650,000) ($14,890,000)
Net ($1,450,000) $10,650,000 ($12,100,000)

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 23 Appendix
Visitor and Revenue Methodology
Unique Ticket Holders
Estimating the number of unique ticket holders for the Olympics beach volleyball events is a critical component of our analysis, as it directly impacts the projected visitor spending and associated fiscal revenues. The 2024 Paris Olympics implemented a cap of six (6) tickets per session and 30 tickets total for all events per individual. This limitation suggests that most people will likely attend only one or a few sessions, while "Olympic family" members, including sponsors, stakeholders, and officials, are more likely to attend multiple events.

To account for these factors in our analysis, we made the following assumptions:

1. All tickets sold to the general public (domestic and international visitors) are held by unique visitors, meaning that each ticket represents a distinct individual.

2. All tickets allocated to the "Olympic family" (sponsors, stakeholders, and officials) are held by non-unique visitors, meaning that each "Olympic family" member may attend multiple sessions.

Figure A.1: Breakdown of Unique Ticketholders for 2028 Olympic Beach Volleyball Events Event Estimates Numbers Sources and Notes
Potential # of Ticketed Spectators 468,000
Percentage of Tickets Sold 97% London 2012 Olympics
Estimated Tickets Sold 453,960
Ticketed Visitors – Domestic 340,470 All Unique
Ticketed Visitors – International 54,475 All Unique
Sponsors & Stakeholders 36,317 Not Unique
"Olympic Family" 22,698 Not Unique
Unique Ticket Holders
Ticketed Visitors – Domestic 340,470
Ticketed Visitors – International 54,475
Sponsors & Stakeholders 2,270
"Olympic Family" 1,419
Total Unique Ticket Holders 398,634
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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 24 Overnight Visitor Travel Estimation & Spending
According to data provided by the City of Santa Monica, the city welcomed approximately 5.3 million visitors in 2022.
21 Among these visitors, a substantial majority (79%) are classified as daytrip visitors.22 These individuals come to Santa Monica for various reasons – leisure, entertainment, business, etc. – but do not stay overnight in the city. Daytrip visitors typically contribute to the local economy by spending on food, beverages, shopping, and attractions during their brief stay.

On the other hand, 19% of Santa Monica's annual visitors are categorized as overnight visitors who stay in hotels or other paid lodging facilities within the city.23 These visitors tend to have a larger economic impact than daytrip visitors, similarly spending on dining and recreation, but with additional expenses on accommodations during their extended stays.
24 Using data from Santa Monica Travel & Tourism's 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary, we established the baseline number of business travelers to Santa Monica. To account for the potential change in business travel patterns during the 2028 Olympics, we referred to a survey conducted during the London Olympics. The survey found that 58% of businesses reported changing their travel plans during the Games to avoid potential disruptions caused by increased crowds and security measures. Therefore, 42% would maintain their usual travel patterns and continue to visit Santa Monica during the 2028 Olympics. To estimate the average spending per business traveler, we utilized data from Santa Monica Travel & Tourism's 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary.

Figure A.2: Estimation of Overnight Business Visitors
Categories Number Source
Total Number of Visitors 5,320,500 City of Santa Monica Hotel Visitors 16% City of Santa Monica
Total Overnight Visitors 872,562
Mainly Visiting Santa Monica for Pleasure/Vacation 51% City of Santa Monica Mainly Visiting Santa Monica NOT for Pleasure/Vacation 49% City of Santa Monica Total Overnight Visitors NOT for Pleasure/Vacation 427,555 Hotel Demand Proportion – Two Weeks in July 4.53% Costar Hotel Demand Total Estimated Business Overnight Visitors 19,358
Business Travel Reduced During Olympics 57% London 2012 Olympics Business Travel Retained During Olympics 43%
Total Estimated Business Overnight Visitors 8,324
21 Santa Monica Travel & Tourism, 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary 22 Santa Monica Travel & Tourism, 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary 23 Santa Monica Travel & Tourism, 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary 24 The remaining 2% of visitors will likely comprise those staying with friends or family or in other unpaid accommodation.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 25 Average Group Size 1 Assume One Person per Room
Total Estimated Non-Olympics Overnight Groups 8,324
Average Length of Stay 1.8 Hotel Tech Report
Total Estimated Non-Olympics Hotel Rooms Demand 14,983
The Olympics are an enormous international event, drawing in visitors and spectators from throughout the city, across the region, and around the world. During the London Olympics in 2012, the visitor draw was so significant that it drove a 4% net increase in annual visitation with almost all of that activity concentrated around the time of the Olympics. We apply that increase to Santa Monica’s visitation here, while also netting out the impacts London experienced from the Paralympics (about 25% of all Olympic tickets sold were Paralympic tickets).

Figure A.3: Estimation of Overnight Visitors Without Beach Volleyball Tickets Categories Number Source
Total Number of Visitors (2022) 5,320,500 City of Santa Monica Pre-Pandemic Annual Growth 0.17% City of Santa Monica
Growth from Olympics 3.87%
London 2012
Visitation Report
Expected Visitors During Olympic Year 5,517,663
Net Visitors for Olympics 197,163
Net Out Paralympics 146,976
London 2012 ticket
sales
Hotel Visitors 16% City of Santa Monica
Total Overnight Visitors 872,562
Hotel Demand Proportion – Two Weeks in July 4.53% Costar Hotel Demand Total Overnight Visitors - Two Weeks in July 39,506
Mainly Visiting Santa Monica for Pleasure/Vacation 51% City of Santa Monica Mainly Visiting Santa Monica NOT for Pleasure/Vacation 49% City of Santa Monica Estimated Total Overnight Vacation Visitors – Two Weeks in July 44,252 Implied Volleyball Ticket Sales as Proportion of Total Ticket Sales 3.9% London 2012 Olympics Implied NOT Volleyball Ticket Sales as Proportion of Total Ticket Sales 96.1% London 2012 Olympics Total Estimated Non-Volleyball Olympics Overnight Visitors 42,543 Average Group Size 3.62 City of Santa Monica
Total Estimated Non-Volleyball Olympics Overnight Groups 11,752 Average Length of Overnight Stay 5.28 Lodgify Report
Total Estimated Non-Volleyball Olympics Hotel Rooms Demand 62,051 If Santa Monica were to host Olympic beach volleyball events, this would drive additional visitation to the city, in addition to the regional visitation impacts described in Figure A.3. Drawing from the unique visitor calculation from i ure A.1 and applyin Santa Monica’s overall capture of Los Angeles County hotel demand, we estimated how many visitors are likely to stay in overnight accommodations and how that translates to overall room night demand. This is detailed in Figure A.4.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 26 Figure A.4: Estimation of Overnight Visitors with Beach Volleyball Tickets Visitor Estimates Numbers Source
Estimated Unique Beach Volleyball Visitors 398,634
Santa Monica Annual Capture of LA County Hotel Demand 3.9% Costar Total Estimated Volleyball Overnight Visitors 15,467
Average Group Size 3.62 City of Santa Monica
Total Estimated Volleyball Olympics Overnight Groups 4,273 Average Length of Stay 5.28 Lodgify Report
Total Estimated Volleyball Hotel Room Nights Demand 22,560 Totaling these visitor groups not only helps us understand the number of visitors interested in staying in hotels, but also helps us predict demand for overnight accommodations in terms of room nights. Santa Monica cannot accommodate unlimited hotel demand. With a limited number of rooms (about 4,000) available over a 16-day period, the demand for hotels outstrips the available supply. We assume that hotels, at maximum, can accommodate 95% occupancy, accounting for cancellations, scheduling inefficiencies, staffing limitations, etc. This demand is detailed in the calculations below. Excess demand is assumed to carry over into the short-term rental market.

Figure A.5: Estimation of Total Overnight Visitors- Event Scenario Categories Number Source
Total Estimated Business Hotel Visitors 8,324 Figure A.2 Total Estimated Non-Volleyball Hotel Visitors 42,543 Figure A.3 Total Estimated Volleyball Hotel Visitors 15,467 Figure A.4 Total Hotel Visitors 66,334
Total Estimated Business Hotel Rooms Demanded 14,983 Figure A.2 Total Estimated Non-Volleyball Hotel Rooms Demanded 62,051 Figure A.3 Total Estimated Volleyball Hotel Rooms Demanded 22,560 Figure A.4 Total Hotel Rooms Demanded 99,594
Total Hotel Rooms Available 64,416 City of Santa Monica Total Estimated Hotel Occupancy Rate 155%
Max Occupancy 95% HR&A Assumption
Max Room Available 61,195
Excess Hotel Demand → Potential STR Rentals 38,399
Number of Groups Seeking Accommodations 7,273
Excess Hotel Demand → Number of Visitors Seeking STRs 26,327 Short-Term Rentals Estimation
Using data from the City of Santa Monica's Short-Term Rental (STR) Program and various Short-Term Rental data analytics platforms, we established the baseline number of STR and STR listings in Santa Monica. To estimate the average daily rate for STR and STR listings during the 2028 Olympics, we analyzed historical data on short-term rental pricing in Santa Monica and considered the potential impact of increased demand on rates. We also CONFIDENTIAL – ATTORNEY-CLIENT PRIVILEGE
HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 27 considered the possibility of dynamic pricing strategies employed by STR hosts to capitalize on the increased demand during the event. The report found that STRs in Paris in preparation for the 2024 Games were estimated to be 85% higher compared to average rates.

Since the Olympics are such a large international event, we treated hotel and short-term rental demand as one and assumed that hotel visitors who lacked accommodation due to overwhelming hotel demand would seek short-term rental options. Based on calculated hotel demand and the limited number of STR type options in Santa Monica, demand for overnight accommodations reaching maximum STR/short-term rental capacity as well. This was a safe assumption since, in both scenarios, the total number of hotel visitors unable to find hotel accommodations in Santa Monica is greater than the total number of short-term rentals available during that time.

Figure A.6: Estimation of Short-Term Rental/STR Visitors – Event Scenario Categories Values Sources
Average Rate $307 AirDNA
Projected Price Increase 85% Deloitte; France24
Average STR Spend Per Accommodation – 2028 Games $569
Average Group Size 3.62 City of Santa Monica
Average Spending Per-Person Per-Day $157
Number of Home Shares in Santa Monica (as of April 2024) 917 AirDNA Inventory Growth Rate (April 2021 – April 2024) 46% AirDNA Olympics Days 16
Max Number of Home Share Nights 14,672
Occupancy 95%
Max Number of Home Share Nights Available at Occupancy 13,938 Number of Groups Accommodated 2,640
Average Group Size 3.62 City of Santa Monica
Number of Visitors Accommodated 9,556
Number of Hotel Visitors Lacking Accommodations in Santa Monica 16,770 Average Length of Stay 5.28 Lodgify Report
Daily Avg. Spend Per-Person (2022) $128.83 City of Santa Monica Daily Avg. Spend Per-Person (2024) $143.24 Inflated using CPI Estimating Overnight Visitor Spending
In addition to short-term rental/STR visitor spending, we can draw from Santa Monica tourism data to project spending for all overnight visitors, adjusted for inflation. This overall spending is detailed in Figure A.7 below.

Ultimately, for all visitors who could not find overnight accommodations in Santa Monica, we assume that those unaccommodated visitors will find overnight options in neighboring cities and visit Santa Monica for a daytrip.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 28 Figure A.7: Estimated Overnight Visitor Spending per Person – Event Scenario Categories Number Source
Total Estimated Business Overnight Visitors 8,324
Total Estimated Non-Volleyball Overnight Visitors 42,543 Total Estimated Volleyball Overnight Visitors 15,467
Total Overnight Visitors 66,334
Unaccommodated Overnight Visitors (translates to daytrip visitors) 16,770 Adjusted Overnight Visitors 49,563
Daily Avg. Spend Per-Person (2022) $306.58 City of Santa Monica Daily Avg. Spend Per-Person (2024) $340.87 Inflated using CPI Daily Avg. Hotel Spend Per-Person – Hotel Visitor $174.57 City of Santa Monica Average ADR Annual $376.21
Average ADR July $425.43
Adjusted Avg. Hotel Spend Per Person – July $197.41
Given supply constraints and total demand from 66,334 visitors, roughly 16,700, or 25%, of overnight visitors will not be accommodated. Figure 4.8 provides a breakdown of total accommodated visitors, given 25% of hotel visitors will not be accommodated. These unaccommodated hotel visitors will likely want to visit Santa Monica, and they will become daytrip visitors, calculated later in the Appendix.

Figure A.8: Estimated for Hotel & STR Accommodations – Event Scenario Hotel Visitor Types Total Demand
Total Accommodated
Visitors
Total Estimated Business Hotel Visitors 8,324 6,220
Total Estimated Non-Volleyball Hotel Visitors 42,543 31,792 Total Estimated Volleyball Hotel Visitors 15,457 11,551 Total Overnight Visitors 66,324 49,563
Overnight Visitor Spending Profile
In calculating revenues generated from overnight visitors, our methodology accounted for differences between visitors staying in hotels and visitors staying in short-term/homestay rentals—based on Santa Monica tourism data, we know that their spending patterns are different. After inflation, the projected daily average per-person, per-day spending for hotel visitors in 2024 settled around $340.87. Meanwhile, short-term rental visitors pay $143.24. As a whole, overnight visitors spent most of their daily average on lodging (51%), meals (18%) and shopping (14%), shown in Figure A.9.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 29 Figure A.9 Daily Average Spend Per Person by Category (Overnight Visitors) Categories
Share of Total
Overnight Visitor
Spending (2022)
Spending Per Person
Per Day ($2024) –
Hotel Visitor
Spending Per Person
Per Day ($2024) – STR
Visitor
Lodging 51.2% $197.41 $157.05
Meals 17.8% $60.78 $25.54
Beverages 9.3% $31.76 $13.35
Shopping / Gifts 13.6% $46.25 $19.43
Admission Fees 1.2% $4.17 $1.75
Activities 0.6% $2.20 $0.93
Local Transport. / Parking, etc. 4.7% $15.96 $6.70
Amenities (Health, Wellness, etc.) 0.2% $0.74 $0.31
Groceries / Other Items 1.3% $4.44 $1.87
When calculating the total 2024 spending for each category, we factored in average length of stay to show how much an overnight visitor spends per trip. The average stay for the Olympics is 5.28 days which, when multiplied by per-day spending figures, results in an estimate for overnight visitor spending per the length of the average, which helps to calculate total overnight visitor spending. These calculations are outlined in Figure A.9.

Figure A.10: Spending Per Person Per Trip by Category (Overnight Visitors) Categories
Spending Per Person Per Trip
($2024) – Hotel Visitor
Spending Per Person Per Trip
($2024) – STR Visitor
Lodging $1,042.33 $829.20
Meals $320.91 $134.85
Beverages $167.72 $70.48
Shopping / Gifts $244.19 $102.61
Admission Fees $22.03 $9.26
Activities $11.63 $4.89
Local Transport. / Parking, etc. $84.25 $35.40
Amenities (Health, Wellness, etc.) $3.91 $1.64
Groceries / Other Items $23.44 $9.85
Total $1,920.41 $1,198.18
Visiting Friends and Relatives Estimation
Many visitors will also visit Santa Monica and stay with friends and relatives (“V R”). Annually, VFRs account for

1.6% of total visitors to Santa Monica. Using a similar methodology as overnight hotel visitors, Figures A.11 and A.12 present the total VFR population who visit Santa Monica, but do not have volleyball tickets.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 30 Figure A.11: Estimated Non-Volleyball VFR Visitor Spending per Person Categories Number Source
Total Number of Visitors 5,320,500 City of Santa Monica Pre-pandemic Annual Growth (2018-2019) 0.17% City of Santa Monica Growth from Olympics 3.87% 2012 London Olympics
Estimated Total Visitors During July 240,892
Peak Percentage of Total 4.53% City of Santa Monica
Number of Visitors from Olympics 197,163
Number of Visitors Net Out Paralympics 146,976
Estimated Total Visitors During Peak Time 240,892
People Staying with Friends & Family 1.6% City of Santa Monica Mainly visiting Santa Monica for pleasure/vacation 51% City of Santa Monica Share of Those Visiting Friends & Family 3,165
Implied Volleyball Ticket Sales as Proportion of Total Ticket Sales 3.86% 2012 London Olympics Implied NOT Volleyball Ticket Sales as Proportion of Total Ticket Sales 96.14% 2012 London Olympics Total Estimated Non-Volleyball VFR Visitors 3,043
Daily Avg. Spend per-person (2024) $113.35 City of Santa Monica Figure A.12: Estimated Volleyball VFR & Visitor Spending per Person Categories Values Sources
Estimated Beach Volleyball Tickets Sold 398,634
Visiting Friends and Relatives 1.6% City of Santa Monica Number of Visitors Accommodated 6,378
Average Length of Stay 5.28
Lodgify Report: Vacation Rental Price
Madness During the Paris Olympics
Daily Avg. Spend per-person (2022) $101.95 City of Santa Monica Daily Avg. Spend per-person (2024) $113.35 Inflated using CPI VFR Visitor Spending Estimation
To calculate fiscal revenues generated from VFR visitors, we began by inflating the daily average spend per person for 2022 ($102), resulting in a daily average spend per person of $113 for 2024. Using spending share data from 2022, we broke down that daily average to determine how VFR visitors would spend their money in Santa Monica and, therefore, how the City would generate tax revenues. We found that VFR visitors were spending most of their daily average on meals (37%), shopping (28%) and beverages (19%); these percentages were used to calculate a daily average spend per person by category, outlined in Figure A.13.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 31 Figure A.13: Daily Average Spend Per Person by Category (VFR Visitors) Indicator
Total Spending
(2022)
Spending Per Person
Per Day ($2024)
Meals 37% $41
Beverages 19% $22
Shopping / Gifts 28% $32
Admissions Fees 3% $3
Activities 1% $2
Local Transport. / Parking, etc. 10% $11
Amenities (Health, Wellness, etc.) 0% $1
Groceries / Other Items 3% $3
Total Estimated Visitor Spending – VFR Visitor 100% $113 Daytrip Visitor Estimation
Using data from the Santa Monica Travel & Tourism's 2022 Santa Monica Tourism Economic & Fiscal Impacts and Visitor Profile Summary, we established the baseline number of daytrip visitors to Santa Monica. According to the report, approximately 79% of the city's 5.3 million annual visitors are classified as daytrip visitors. To account for the potential increase in daytrip visitors during the Olympic Games, we analyzed data from previous Olympic events and studies on the impact of large-scale sporting events on local economies. Based on the London 2012 Olympics, which experienced a 4% net increase in annual visitation from hosting the Games, we assumed that Los Angeles County—and as a result, Santa Monica--would experience a similar boost in visitation during the 2028 Olympics.

Approaching business daytrip visitors in a similar way to Figure A.2, we make similar calculations to isolate the business daytrip population in Figure A.14.

Figure A.14: Estimations of Business Daytrip Visitors
Categories Number Source
Total Number of Visitors 5,320,500
Peak Percentage of Total 4.53% City of Santa Monica
Total Visitors During Peak Time 240,892
Day Visitors 79% City of Santa Monica
Mainly Visiting Santa Monica for Pleasure/Vacation 51% City of Santa Monica Mainly Visiting Santa Monica NOT for Pleasure/Vacation 49% Business Travel Impacted by Olympics 57% London Report
Business Travel NOT Impacted by Olympics 43%
Total Estimated Business Daytrip Visitors 39,945
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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 32 By approaching calculations for Olympic daytrip visitor projections in a similar way to Figure A.3, we make similar calculations to isolate the Olympic visitor without beach volleyball tickets daytrip population in Figure A.15.

Figure A.15: Estimation of Daytrip Visitors without Beach Volleyball Tickets Categories Number Source
Total Number of Visitors 5,320,500 City of Santa Monica Pre-Pandemic Annual Growth (2018-2019) 0.17% City of Santa Monica Growth from Olympics 3.87% 2012 London Olympics
Estimated Total Visitors During July 240,892
Peak Percentage of Total 4.53% City of Santa Monica
Number of Visitors from Olympics 197,163
Number of Visitors Net Out Paralympics 146,976
Estimated Total Visitors During Peak Time 240,892
Day Visitors 79% City of Santa Monica
Mainly Visiting Santa Monica for Pleasure/Vacation 51% City of Santa Monica Share of Day Visitors for Pleasure 212,357
Implied Volleyball Ticket Sales as % of Total Ticket Sales 3.86% 2012 London Olympics Implied NOT Volleyball Ticket Sales as % of Total Ticket Sales 96.14% 2012 London Olympics Total Estimated Non-Volleyball Daytrip Visitors 204,152 By approaching calculations for daytrip visitors with beach volleyball tickets projections in a similar way to Figure A.4, we make similar calculations to isolate the Olympic visitor with beach volleyball tickets daytrip population in Figure A.16. We also draw from City of Santa Monica tourist data to project spending for daytrip visitors, adjusting 2022 estimates for inflation.

Figure A.16: Estimation of Daytrip Beach Volleyball Visitors Categories Number Source
Estimated Beach Volleyball Tickets Sold 398,634
Hotel Visitors – Olympics, Volleyball 11,551 City of Santa Monica VFR Visitors 6,378
Total Estimated Volleyball Day Trip Visitors 380,704
Figure A.17: Summarized Daytrip Population & Overall Per-Day Daytrip Spending Categories Number Source
Total Estimated Business Daytrip Visitors 39,945 Figure A.14 Total Estimated Non-Volleyball Daytrip Visitors 204,152 Figure A.15 Total Estimated Volleyball Daytrip Visitors 380,704 Figure A.16 Unaccommodated Hotel Visitors 16,770 Figure A.7
Total Daytrip Visitors 641,562
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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 33 Daily Avg. Spend Per-Person – Daytrip Visitor (2022) $34.65 City of Santa Monica Daily Avg. Spend Per-Person – Daytrip Visitor (2024) $38.53 Inflated using CPI Daytrip Visitor Spending Estimation
To calculate fiscal revenues generated from daytrip visitors, we began by inflating the daily average spend per person for 2022 ($34.65), resulting in a daily average spend per person of $38.53 for 2024. Using spending share data from 2022, we broke down that daily average to determine how daytrip visitors would spend their money in Santa Monica and, therefore, how the City would generate tax revenues. We found that daytrip visitors were spending most of their daily average on meals (37%), shopping (28%) and beverages (19%); these percentages were used to calculate a daily average spend per person by category, outlined in Figure A.18.

Figure A.18: Daily Average Spend Per Person by Category (Daytrip Visitors) Categories
Share of Total Daytrip Visitor
Spending (2022)
Spending Per Person Per Day
($2024)
Meals 36.5% $14.08
Beverages 19.1% $7.36
Shopping / Gifts 27.8% $10.71
Admission Fees 2.5% $0.97
Activities 1.3% $0.51
Local Transport. / Parking, etc. 9.6% $3.70
Amenities (Health, Wellness, etc.) 0.4% $0.17
Groceries / Other Items 2.7% $1.03
We then multiplied each daily average spending by category by the total number of projected daytrip visitors (644,000) to estimate the total spending for each category, shown in Figure A.19.

Drawing from the number of visitors by category, listed in the table above in Figure A.17, this translates to the total spending detailed in Figure A.19 below.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 34 Figure A.19: Event Scenario – Total Estimated Visitor Spending by Category Categories Daytrip Visitors Hotel Visitors STR Visitors VFR Visitors Lodging $0 $41,700,000 $7,920,000 $0
Meals $9,030,000 $12,840,000 $1,020,000 $2,060,000
Beverages $4,720,000 $6,710,000 $530,000 $1,080,000
Shopping / Gifts $6,870,000 $9,770,000 $780,000 $1,570,000 Admission Fees $620,000 $880,000 $70,000 $140,000
Activities $330,000 $470,000 $40,000 $70,000
Local Transport. / Parking, etc. $1,190,000 $1,690,000 $130,000 $540,000 Amenities (Health, Wellness, etc.) $110,000 $160,000 $10,000 $30,000 Groceries / Other Items $660,000 $940,000 $70,000 $150,000 Total $23,530,000 $75,160,000 $10,570,000 $5,640,000
Cost Estimation
Resident Share of Baseline Costs Assumptions – Typical Day For relevant expenses, we calculated per-person, per-day cost estimates for each expense category drawing from departmental variable costs from the adopted FY 2023-2024 budget. HR&A consulted with City staff in determining which costs should be considered as variable.

In calculating these costs, we developed an average daily population in Santa Monica comprising a weighted estimate of the number of residents, workers, day visitors, and overnight visitors, or “person-equivalents.” We assigned weights to each group based on how they impact City expenses, with residents and overnight visitors carrying a larger share than workers and day visitors. The per-person calculation is based on the average “personequivalents” in Santa Monica daily.

Figure A.20: Weighted Residents Calculations in Santa Monica Population
Counts
Per Day Weighting
People
(Weighted) Source
Total Residents 92,168 92,168 100% 92,168
Census, 2022 Five
Year Estimates
Total Employees Living
Outside Santa Monica
64,219 64,219 30% 19,266 On the Map
Total Daytrip Visitors
(2022)
4,186,200 11,469 30% 3,441
City of Santa
Monica
Total Overnight Visitors
Trip Visitors (2022)
1,134,294 3,108 100% 3,108
City of Santa
Monica
Total Resident
Population
5,476,881 170,964 117,982
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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 35 FY 2023-2024 Approved Budget
We utilized the detailed information provided in the FY 2023-2024 Approved Budget to calculate the per-person, per-day cost estimates for each relevant expense category. These expense categories include public safety (police and fire), public works, beach maintenance, and other City services that are likely to be impacted by the increased visitation during the Olympics. In collaboration with city officials, we looked at the proportion of the budget that should be considered as variable. Fixed costs such as insurance policies or some existing vendor contracts that do not change based average daily population were subtracted from the total budget leaving us with a proportion of variable costs that will change with the influx of Olympic visitors. By analyzing the budget data, we found total annual costs for each expense category. We then divided these annual costs by the estimated average daily population of “person-equivalents” in Santa Monica (as described in Figure A.21), which comprises residents, workers, day visitors, and overnight visitors. This calculation yielded the per-person, per-day cost estimates that form the basis of our baseline cost projections.

Figure A.21: Impacted FY 2023-2024 Approved Budget Categories as Share of Weighted Residents Total
Variable % of
Total FY 2023-
2024 Budget
Daily Allocation
Resident Share of
Costs
Police & Fire $117,241,726 68% $321,210 $2.72
Transportation & Traffic $59,850,025 63% $163,973 $1.39 Beach Maintenance $8,940,867 71% $24,496 $0.21
Santa Monica Pier $5,520,729 67% $15,125 $0.13
Waste Management $21,990,613 65% $60,248 $0.51
Total $213,543,960 $585,052 $4.96
The Twilight Concert Series
To estimate the event-specific costs associated with hosting Olympic beach volleyball events in Santa Monica, we relied on data from the City's analysis of the fiscal impact of the Twilight Concert Series in 2017. This data provided valuable insights into the costs incurred by the City for a large-scale, beach-adjacent event, which served as a useful proxy for estimating the potential costs of hosting the Beach Volleyball tournament.

We examined the Twilight Concert Series data to identify the key cost categories calculated in the report. These categories included police and public safety, fire department, transportation and traffic management, beach maintenance, pier management, and waste management costs. We calculated per-attendee & per-event costs for each identified cost category based on the total costs incurred during the Twilight Concert Series, the total number of attendees, and the total number of events to develop the metrics in Figure A.22 below. Finally, we applied the adjusted costs to the number of beach volleyball events and projected attendees to estimate the total event-specific costs for hosting in Santa Monica in 2028. Since event costs will likely be influenced by both the number of events and the gross number of fans in attendance, we believe taking an average balances between those factors.

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HR&A Advisors Inc. | Santa Monica 2028 Games Fiscal Impact | 36 Figure A.22: Twilight Concert Series per Person and per Event Cost Estimation Event Cost Per Person Event Cost Per Event
Police & Fire $17.60 $151,000
Transportation & Traffic $0.84 $8,000
Beach Maintenance $0.54 $5,000
Santa Monica Pier $11.50 $108,000
Waste Management 15 Total Tons Produced
$30.47 $272,000
Finally, because of the vast increase in the number of visitors from the Olympics, we projected likely costs from additional waste management services to dispose of trash from fans. Our approach is detailed in Figure A.23 below.

Figure A.23: Estimation of Waste Management Costs Based on the Twilight Concert Series Categories Numbers Source
Tons of Trash Per Person 0.000250 Twilight Concert Series Total Unique Ticket Holders 398,634 HR&A Estimated Visitors Total Tons Produced During the Olympics 100
Pounds of Trash Produced 199,317
Pounds Per Gallon .4456 EPA
Gallons of Trash Produced 447,298
Bin Size (Gallons) 65
Total Number of Trash Bins 6,882
Solid Waste Handling Fee (per 2 weeks) $97.54 Public Works: Resource Recovery and Recycling Implied Cost Per Pick-Up $48.77
Estimated Waste Management $335,611 $2024