Economy Watch: The Economics of New Year’s Eve

People spend money to ring in the New Year, mostly as a function of entertainment, which is to the benefit of entertainment venues, hotels and restaurants.

new-years-eveChristmas is well-known for its economic impact, with retailers eager to capitalize on the custom of gift-giving and entertaining for the holiday. New Year’s Eve is more sedate, economical speaking, but not without its economic aspects. People spend money to ring in the New Year, mostly as a function of entertainment, which is to the benefit of entertainment venues, hotels and restaurants.

Mint.com reported recently that most Americans stay home for the evening, but 5 percent attend a large organized event, 2.5 percent go to bars and 3.2 percent party-hop, though no doubt some energetic folks do all those things. The vast majority of people spend less than $200 each for the festivities, but 9 percent spend as much as $500 and 3 percent spend as much as $1,000 for New Year’s Eve. One percent spend more than $1,000 on the event, presumably including the cost of going somewhere for the occasion.

Among those who travel for the holiday, New York is the top destination, followed by New Orleans, Las Vegas, Orlando and Miami. According to WalletHub, Orlando is the nation’s top New Year’s destination, considering relatively low costs, the high quality of the entertainment, and how safe the place is. San Francisco is second, and Atlanta third; the company puts New York at No. 38. While Gotham is one of the safest places to be, it’s also one of the most expensive.

One more detail to cheer liquor retailers: Fully a quarter of all U.S. sales of champagne nationwide are during the week leading up to New Years’ Eve, reported Mint.com. That’s more than 39.8 million bottles.