This year’s Melbourne Cup Carnival will see spending increase by 4.1% on 2011, according to IBISWorld, which has highlighted oppportunities for retailers and regional tourism operators.
IBISWorld predicts overall spending on the Melbourne Cup to reach $438.3 million this year, up 4.1% on last year, driven by a “slew” of new sponsors.
According to the Victoria Racing Club, the surge in corporate spending is expected to see spring carnival revenue rise 20% above the levels recorded before the global financial crisis.
While corporate sponsorship is on the up, IBISWorld expects tourism to grow by just 2.4% this year.
The boost in corporate attendance and travel is expected to be partially offset by an anticipated decrease in general admission attendance.
But according to IBISWorld senior analyst Craig Shulman, the Melbourne Cup also offers opportunities to regional tourism operators.
“General interest in regards to Melbourne Cup does seem to be wavering… In Melbourne, there is a larger initiative towards bypassing the day altogether,” Shulman told StartupSmart.
“We are seeing that within the Melbourne area, many people take it as an opportunity to get out of town… [which presents] an opportunity for tourism operators outside of Melbourne.”
Shulman suggests the event is also less of a novelty for Melbournians.
“It’s still seen as something that’s done once or twice – there’s not really a need to go and see it again. There’s less interest there and opportunities to do something else year after year,” he says.
While overall attendance at the track is expected to be down, IBISWorld anticipates the increase in corporate attendance – coupled with the popularity of Melbourne Cup events around Australia – will lead to a 6.9% increase in food and beverage spending, to reach $162.5 million.
According to Shulman, this is good news for businesses in the hospitality industry.
“There are many opportunities taken in Victoria and Australia to provide social occasions, whether it’s workplace afternoon teas or lunches,” he says.
“Many, many social lunches are put on during the day.”
Spending on fashion and beauty is expected to increase by just 1.5% to $46.7 million this year, as racegoers opt to accessorise an existing outfit or capitalise on in-store and online sales.
Meanwhile, the trend towards do-it-yourself styling will lead to flat beauty spending.
“While there’s flatter spending on fashion and beauty this year, we do expect people are intending to spend money on accessories,” Shulman says.
“There is still a desire for people who are attending the Melbourne Cup Carnival to dress themselves up a bit more, which does require some extra investment.”
“While it won’t be a complete outfit people are looking for, smaller items will be looked at more intensely.”
“People are still looking for high-value purchases, whether that’s in the cheap range or something a bit more expensive but seen to be worth more than its value.”
“It’s a two-pronged trend. There’s more emphasis on accessories and there is an emphasis on value as well, which is similar to what’s going on right now [in the retail sector in general].”
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