The Bilbao Effect – The economic and social impact of a Museum

What is Bilbao Effect?

• žThe transformation of the decaying small Spanish town by a new museum or cultural facility into a vibrant and attractive place for residents, visitors and inward investment.
• žMajor credit to the famous Guggenheim museum designed by Frank O Gehry

BEFORE THE GUGGENHEIM:

• A highly congested river port
• Purely industrial city (grey)- iron and steel industry, shipbuilding, chemical factories
• Bilbao was in the grip of an economic recession and identity crisis because heavy industry was in precipitous decline

AFTER THE GUGGENHEIM:

• It was de-industrialisation that stimulated the Bilbao and the Basque governments was a plan to create a major international cultural initiative to revive the city and put it on the map in a period of European integration.
• Rise in service companies, tourism, high technology and dissemination of information and knowledge
• Construction of new buildings

1998 (October 1997 inauguration of the Guggenheim) 1,500,000 visitors, surpassing anticipated numbers.

Change of image for Bilbao:   Modern city

• Driving force for consolidating the tourism   industry in Basque country
• Improved quality of life for  residents in terms of  leisure activities
• Stimulator for inbound tourism and   commercial activity
• Venue for congresses, seminars, courses, etc.
• Generator of international prestige for the  Basque country
• International cultural tourism

Economic stats:

• In its first 12 months, 79% of visitors to the Guggenheim came to Bilbao exclusively to see the museum.
• These visitors spent € 186 million, an average of € 168 per visitor.
• Income of sectors benefiting most from the Guggenheim in the first 9 months:
  • Over € 63 million on hotels and restaurants
  • Over € 48 million in shops and businesses
  • Over € 39 million on accommodation companies
  • Over € 22 million on the museum itself (tickets, purchases,…)
  • Over € 10 million on transport (petrol, tolls…)

CONCLUSIONS:

• žECONOMIC EFFECT: main reason for attracting and developing tourism in the area
• žTOURISTS: tourist spending represents profits for business owners, jobs for residents and revenue via taxes (self-financing).

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