Spending on the Melbourne Cup carnival is expected to surpass recent records. Photo: Jenny Evans
The total amount of cash splashed at this year's Melbourne Cup by corporates on entertainment and by punters on bets and booze is expected to be among the biggest on recent record.
Business information analysts IBISWorld believe that following a more restrained 2011, this year's Melbourne Cup Carnival will see a return to conspicuous spending, and is forecasting an overall increase in total expenditure of 4.1 per cent on 2011 to reach $438.3 million.
Betting is also expected to jump, with IBISWorld forecasting a 7.5 per cent rise to more than $60 million on Melbourne Cup day alone.
The higher spending will take in a 7 per cent rise in the money spent on food and beverages to about $162.5 million, but a more moderate 1.5 per cent lift in fashion and beauty spending to just under $47 million as people opt to purchase small accessories rather than entire new outfits.
IBISWorld general manager Karen Dobie said the continued push from the betting sector encouraging greater gambling expenditure and a strong rise in corporate spending fuelled by new sponsors were key revenue growth factors.
"We have seen a slew of new sponsors enter the fray this year, with the Victoria Racing Club announcing 19 new corporate private marquee clients including Melbourne's Crown Casino," said Ms Dobie. "According to the VRC, the surge in corporate spending is expected to see spring carnival revenue rise 20 per cent above the levels recorded prior to the global financial crisis."
While corporate sponsorship for this year's Melbourne Cup Carnival is on the up, IBISWorld expects tourism to grow by just 2.4 per cent this year, with the boost in corporate attendance and travel expected to be partially offset by an anticipated decrease in general admission attendance.
"Attendance to the Melbourne Cup has been declining over the past few years, which has somewhat subdued the increase in tourism spending. However, interstate and international visitor numbers are expected to remain strong for this year's Melbourne Cup Carnival," Ms Dobie said.
According to Racing Victoria, in 2011 the Melbourne Cup Carnival attracted more than 125,000 international and interstate visitors, along with 240,000 Victorians, and was estimated to have generated more than $360 million for the state.
Ms Dobie said that while the majority of the estimated $60 million in bets were expected to be placed at the TAB, IBISWorld expected online and mobile betting to continue to rise, especially as more Australians take advantage of smartphone betting apps.
In 2012, IBISWorld expects spending on fashion and beauty to increase just 1.5 per cent to $46.7 million as patrons prefer to accessorise something already in the wardrobe or capitalise on in-store and online sales, while the trend towards do-it-yourself styling will lead to flat beauty spending.
"Spending is expected to focus on feature items and accessories. For the ladies, this may include a new hat or fascinator, shoes, handbag or jewellery. For the men, it may be a new tie or cuff links," said Ms Dobie.