Hull College of Business experts see ‘normal’ Masters Tournament as crucial to Augusta economy

The Masters Tournament at Augusta National Golf Club returns to a normal event this year, prompting expectations of the usual economic impact that it brings to the Augusta region.

The 2020 tournament was postponed until November and held without spectators. The 2021 tournament was held on time, but had fewer patrons.

Dr. Marsha Loda, an associate professor of marketing at Augusta University’s Hull College of Business, says she has seen the total impact estimated to be around $120 million.

“For the hospitality industry, it is like gaining an extra month of income from just one week,” explains Loda, who was a marketing executive prior to her teaching career.

“It is hard to find a business that doesn’t benefit from the ripple effects. Thousands of people fly into the city, they rent a car, they book a hotel, they eat in restaurants, buy at local shops. Even floral shops have an increase from the arrangements people request for parties and other events.”

Home hospitality

A unique aspect to the Masters that isn’t repeated in other major golf tournaments is how the community participates in the hospitality by renting out homes to visitors, Loda says.

“We have such an excitement for tournament time. The Augusta National set a high bar for customer service that the homeowners seek to meet,” she says. Homeowners who are repeat lessors seek to improve the experience from year to year. If that involves renovations and landscaping, it is money circulating through the Augusta economy.

Roughly 4,000 homes are available for rent for tournament time. Some of those one-week landlords are able to cover their annual mortgage payment with rental revenue, Loda says.

“Customer service is a transaction. Hospitality is how you make people feel. The Augusta National does a great job with how they make people feel about the tournament and the course itself,” Loda says.

Some recovery

Dr. Simon Medcalfe, professor of economics, says there should be signs of economic recovery with this year’s tournament.

“A decade ago, the bump we got was about 3,000 extra jobs in April, but some of those jobs are just for the week,” Medcalfe says. For the Masters Tournaments just prior to the COVID-19 pandemic, the bump in leisure and hospitality employment was higher, at about 4,000 more workers. The employment bump was cut in half by the pandemic because of the reduced capacity of patrons at the course.

“This year, maybe we’ll be back to around that 4,000,” he says.

Hotel revenue took a hit last year, he says, where the average revenue per room was $25 lower. However, he sees a rebound in hotel stays and their revenue.

Richmond County collects $1.4 million in hotel-motel tax in the month of April, three times higher than an average month.

Medcalfe points out that the addition of the Augusta National Women’s Amateur Tournament may play a role in the local economy by adding more visitors to the city earlier than Masters Week.

In the name

Loda says the city of Augusta is fortunate that Augusta is in the name of the course, Augusta National. She points out that other golf courses who host PGA major golf championships do not have the name of the city in them — Torrey Pines in San Diego, California, and Bethpage Black in Long Island, New York, for example.

The Masters is the only major to be held at the same course each year, making “Augusta” synonymous with the best in golf.

“Think of the global exposure Augusta gets from the TV broadcasts,” she says. In 2021, coverage peaked at 18.3 million viewers on CBS.

Augusta is also on display during the Georgia Chamber of Commerce’s Red Carpet Tour. Throughout this four-day, invitation-only event, guests are paired with an existing Georgia industry leader, making it easy for business prospects to receive first-hand accounts of what it’s like to run a business in Georgia. Loda once volunteered for the tour, which stops in Augusta twice, to accompany guests into the Masters Tournament.

“What other state can offer something like that to traditionally male corporate owners who are really interested in golf?” Loda says.