A study examining local businesses found that the presence of Colgate students in Hamilton did not improve sales for local retailers. The gross sales of these businesses actually decreases during the academic year.
Junior Alden Ellis conducted the study for the Partnership for Community Development (PCD); the project was sponsored by the Upstate Institute Field School.
Ellis’s research revealed other surprising trends. For example, major events on campus did not greatly increase the revenue of retailers.
Ellis gathered data by collecting the gross sales over 18 weeks of Saturdays from 25 businesses, including retail, entertainment, hospitality and dining services.
The study was a part of the PCD’s long-range economic development plan for the Hamilton area. Associate Dean of the Faculty and Upstate Institute Director Jill Tiefenthaler is on the board of the PCD. She explained why the PCD was interested in collecting this data.
“They (PCD) have always had a great interest in the problems that our local businesses have in the summer time,” she said.
“And I think there have been a lot of ideas about what contributes to those problems. There’s always a lot of conjecture and not a lot of data surrounding what the impact of the student schedule is on local business. So what we were interested in doing from the PCD’s point was to sort out what’s myth and what’s reality from what people believe about the impact of the students.”
While dining, entertainment and lodging services saw an increase in their average sales of 20.05 percent, Hamilton’s retail businesses saw a 7.03 percent drop in sales once the students returned to campus. Ellis tried to find an explanation for this phenomenon.
“We had a really hard time attributing the drop to a certain group. We don’t know if it was that students weren’t spending, or if it was that townspeople weren’t coming to spend like they had over the summer.” Ellis said. “We think it’s kind of a crowding-out effect, where people are concerned about issues like parking, those sorts of things, long lines and waits in restaurants to get food, it keeps people out of there that would have normally gone over the summer.”
Tiefenthaler, who is an economist, did not expect these results.
“I was actually quite surprised that some of the biggest weekends on campus, like reunion and the return of students in the fall, were not a huge bump for our local retailers,” she said. “We did find that our service industry does quite well when the students return, but that our retailers don’t get very much of a bump from the student presence on campus.”
The only retailer that stands as an exception to the results was the Colgate Bookstore. The Bookstore saw a huge increase in sales during the alumni reunion and when the students returned to campus. Ellis was not able to determine whether the bookstore has had a positive or negative impact on other retailers since its move downtown in 2002. Ellis found that the bookstore’s sales were “for the most part independent” from sales of other businesses.
Tiefenthaler drew the same conclusion.
“What we can say from the study is that big weekends for the bookstore don’t correlate with big weekends for other places,” she said.
The PCD’s economic plan will work on ways to deal with this issue. Tiefenthaler suggested ways of improving retail sales.
“One of the things is to try and figure out ways to get the students to buy downtown when they can, and have them understand the importance of that,” she said.
“The other thing is to work with retailers to figure out how to better cater to that market if they want to.”
“Things are not always what they seem in Hamilton. You would really think that students are helping the economy here, and they are in certain ways, but the way we’ve measured it, there’s a crowding-out effect where retail businesses do go down and they don’t do as well as they probably should.”
“I really think students need to spend more time exploring the town, getting to know some of the smaller shops that are here…I really think that that’s something that can be improved.”
Several summer events do contribute to an increase in economic activity in Hamilton, including Hamilton Central’s Graduation weekend, the Bouckville Antique Show and the Hamilton Music Mix.
The Upstate Field School matches community projects with 14 students who have the necessary qualifications, and each project is an opportunity for students to intern at Colgate over the summer. The PCD will continue its research on Hamilton’s business trends with the Upstate Field School.
“We just sent our Field School application forms out for the summer, and I know that the PCD will be submitting another project-a follow-up study-to work with the Hamilton Business Alliance and the PCD on the issues of marketing to students…and meeting the demands of what they’re interested in,” Tiefenthaler said.