by Carolyn Edlund
The economic and cultural impact of arts in communities is significant and growing. Here’s why art matters, and how it makes a difference.
A nonprofit gallery art exhibition reception
Arts and culture is a significant “growth industry” in the United States. This sector contributes approximately $1.1 trillion to the economy and accounts for 4.3% of the U.S. gross domestic product. This substantial economic impact highlights the increasing importance of creative sectors as drivers of financial growth and community development. Here are some of the economic benefits:
Tourism Revenue
Arts events act as powerful magnets for travelers. Quite often, they draw visitors who might not otherwise pay a visit to the area. Cultural tourists spend an average of $38.46 per person at local merchants over and above event admission costs. This additional spending goes to restaurants, retail shops, parking facilities, hotels and other activities. Thus, a multiplier effect is created for the local economy.
For example, Asheville, North Carolina has a vibrant and growing arts district. Regularly scheduled festivals have transformed the downtown area from a declining urban center into an exciting tourist destination. Visitors come specifically to experience the arts, and patronize local businesses during the trip. A recent example of the expansion of the arts district is the addition of UpMarket Gallery, a downtown gallery, retail and event space located in a historic building.
Opening reception at UpMarket Gallery in Asheville, NC
Keeping Money Local
When communities invest in local arts programs and venues, they provide a reason for residents to spend their entertainment dollars locally rather than traveling. This keeps the money flow within the community, which strengthens the local economy and supports small businesses.
The ArtPrize competition in Grand Rapids, Michigan demonstrates this principle. The annual event keeps local residents engaged in their own community while simultaneously attracting hundreds of thousands of visitors. Their 2024 report stated that the event generated revenue that topped $71 million in economic activity during its run, which was a 30% increase year over the previous year.
Authentic Cultural Experiences
Arts events provide both visitors and residents with genuine cultural experiences that reflect the unique character and heritage of a community. These have great appeal due to their historic and authentic nature which cannot be experienced elsewhere.
A perfect example of the value of experience is the New Orleans Jazz & Heritage Festival. They showcase the unique musical and cultural traditions of Louisiana. For that effort, the event generates more than $300 million in economic activity annually.
Extending Visits
Cultural tourists tend to stay longer in areas with dynamic and rich offerings in the arts. This in turn increases their overall spending and the benefit to the community. Quite often, visitors plan their entire itinerary around attending cultural events, museums, and performances.
Santa Fe, New Mexico has capitalized on this trend by developing a robust cultural calendar. Known as a mecca for the arts, they host the famous Indian Market which has been in existence for more than 100 years. Known as one of the most extraordinary venues for Native American arts and crafts, it attracts international attention from collectors and fans. Visitors have many reasons to extend their visit since the city has embraced a cultural theme and built their infrastructure accordingly to accommodate thousands of visitors.
Beyond Economic Impact: Community Building
While the economic benefits are substantial, arts events also strengthen communities in other ways:
- Social Fabric: Arts events bring diverse groups together around shared experiences. They encourage conversation, sharing and engagement.
- Civic Pride: Cultural institutions and events become sources of community identity and pride. Quite often, local commercial sponsors demonstrate their commitment to the area by funding these events.
- Educational Opportunities: Arts programming provides incredible learning experiences for residents of all ages, who may otherwise not participate.
- Quality of Life: Communities with vibrant arts scenes attract and retain professionals who want to be part of the arts or music scene. The arts are a main building block that can jumpstart a distressed area, turning it into an appealing destination for living and entertainment.
- Creative Placemaking: Locally-driven planning and implementation of arts-related projects, improvements and events reinforce a sense of “place” appropriate for the culture of the area.
The arts represent more than just an aesthetic enhancement to a community. Due to the power of these attractions rippling throughout the local economy, they function as powerful economic engines. In turn, they become business sectors that invite support and further investment..
Communities that undertake the process of becoming arts destinations are positioning themselves for economic growth with long-term results. The arts shouldn’t be classified as “luxuries.” Instead, they are hardworking components of thriving robust communities.
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