Indirect profitability
Under indirect profitability is meant the fact that the indirect benefits of a large event or a major tourist, cultural and infrastructural means for a region ( indirect returns ) makes if necessary total profitable.
Sports events, concerts, trade fairs, ski areas, amusement parks, museums and other events and facilities are often not borne by the entrance fees, stand fees, etc. Public donors ( municipalities , states , federal government , the EU ) and private interest groups (business development associations, tourism associations and similar organizations) ) give grants in the expectation of indirectly refinancing . Here one thinks primarily of the number of overnight stays and the gastronomy , possibly also of the retail trade , which can benefit from visitors from outside.
Indirect profitability in the broader sense may result from the general increase in the quality of life in the region concerned, which can potentially slow or even reverse emigration tendencies. In addition to the users, those employed directly or by service providers also benefit from a corresponding event or facility. The locals, which one has in view, are of great importance for the economic situation of a region as specialists , taxpayers and consumers , which is why increasing the general attractiveness of the region is seen as useful and, if necessary, promoted. It is mostly the public financiers who are called upon here. Numerous foundations and associations also dedicate themselves to such tasks as far as they can.
The investment in the infrastructure of the former GDR as part of the Aufbau Ost project is probably one of the greatest attempts in this direction in Germany. Typically, as the project grows, profitability considerations take a back seat to socio-political significance.
Other projects, such as the Elbphilharmonie in Hamburg, are considered particularly prestigious . Even in such cases, profitability is de facto secondary.
It is difficult to prove whether indirect profitability will actually occur: certain assumptions have to be made about the amount of indirect profitability, the realism of which may be controversial. Even in retrospect, the indirect profitability is rarely proven. The concept is more suitable for the political discussion about the justification of funding than for an analysis based on business management standards.