Richmond International Raceway generates $467 million worth of economic activity each year, according to an economic study commissioned by the track. The study was conducted by the Washington Economics Group of Coral Gables, Fla. The results were announced at a news conference yesterday at the state Capitol.
The $467 million total includes $278 million of direct spending by RIR on operations as well as money spent by thousands of race fans on lodging, food and gas. The rest of the total comprises indirect and induced spending.
All that economic activity adds up to $85 million in tax money to federal, state and local coffers.
The raceway hosts two NASCAR cup races (in May and September) and one Indy Racing League event each year in addition to trade shows and other events. RIR is owned by International Speedway Corp., which owns 11 other tracks, including Daytona International Speedway, Talladega Speedway and Martinsville Speedway.
According to the study, RIR generates 7,765 permanent jobs that receive a total labor income of $186 million. More than 2,400 are in the knowledge-based service sector, followed by more than 2,100 in the visitor industry, according to the study.
R. Jon Ackley, a business professor at Virginia Commonwealth University who teaches a business of NASCAR class, said the economic numbers are on par with similar studies for other tracks.
“When you bring 110,000 people into Richmond for a couple days twice a year and add to that the 40,000 or 50,000 that come for the Indy race, I don’t think the numbers are that unrealistic,” he said.
Ackley said the number of jobs reported in the survey probably includes jobs that would be here anyway but are in large part supported by race activities.
Although the study measures the past performance of RIR, the upcoming Sprint Cup race weekend in May will test the track’s performance in a stalled economy.
“I don’t think the money is going to be dropped as much this year,” Ackley said. So far this season, race fans are spending less on merchandise and concessions, he said.
Doug Fritz, president of RIR, spoke at the conference and said the track had restructured ticket prices for about 18,000 seats in response to the downturn, reducing the cheapest tickets from $85 to $40.
“So far the season has been pretty good from an attendance standpoint,” he said. “The trend seems to be later sellouts than in the past.” Last fall’s Sprint Cup race was the first one at RIR not to sell out in more than a decade, partly because of a weather-related delay. So far this year, two out of five of the cup races have sold out.
ISC anticipates earnings in 2009 to be between $745 million and $765 million, which is as much as $40 million less than was made in 2008, according to recent financial statements. The anticipated loses are partly tied to the turmoil in the U.S. auto industry, a major sponsor of NASCAR.
“We also find [fans] are spending a little less when they get to the racetrack, but they love the sport like nothing else,” Fritz said. “And they are going to do everything they can to hold on to their family vacations.”
In an effort to make travel more affordable for fans, the track has forged a deal with AirTran to reduce airfare to Richmond by 10 percent for the upcoming race weekend. Fritz said they are negotiating with area hotels to lower rates during race weekends.
Jack Berry, president and chief executive of the Richmond Metropolitan Convention and Visitors Bureau, also spoke at the news conference and said RIR is a boon to the local tourism industry.
“Year in and year out, the May and September weekends are the highest occupied for hotel usage in the area,” Berry said. “This is our economic stimulus, to have racing in the commonwealth.”
Previously on Richmond BizSense: Caution Flag for RIR
Richmond International Raceway generates $467 million worth of economic activity each year, according to an economic study commissioned by the track. The study was conducted by the Washington Economics Group of Coral Gables, Fla. The results were announced at a news conference yesterday at the state Capitol.
The $467 million total includes $278 million of direct spending by RIR on operations as well as money spent by thousands of race fans on lodging, food and gas. The rest of the total comprises indirect and induced spending.
All that economic activity adds up to $85 million in tax money to federal, state and local coffers.
The raceway hosts two NASCAR cup races (in May and September) and one Indy Racing League event each year in addition to trade shows and other events. RIR is owned by International Speedway Corp., which owns 11 other tracks, including Daytona International Speedway, Talladega Speedway and Martinsville Speedway.
According to the study, RIR generates 7,765 permanent jobs that receive a total labor income of $186 million. More than 2,400 are in the knowledge-based service sector, followed by more than 2,100 in the visitor industry, according to the study.
R. Jon Ackley, a business professor at Virginia Commonwealth University who teaches a business of NASCAR class, said the economic numbers are on par with similar studies for other tracks.
“When you bring 110,000 people into Richmond for a couple days twice a year and add to that the 40,000 or 50,000 that come for the Indy race, I don’t think the numbers are that unrealistic,” he said.
Ackley said the number of jobs reported in the survey probably includes jobs that would be here anyway but are in large part supported by race activities.
Although the study measures the past performance of RIR, the upcoming Sprint Cup race weekend in May will test the track’s performance in a stalled economy.
“I don’t think the money is going to be dropped as much this year,” Ackley said. So far this season, race fans are spending less on merchandise and concessions, he said.
Doug Fritz, president of RIR, spoke at the conference and said the track had restructured ticket prices for about 18,000 seats in response to the downturn, reducing the cheapest tickets from $85 to $40.
“So far the season has been pretty good from an attendance standpoint,” he said. “The trend seems to be later sellouts than in the past.” Last fall’s Sprint Cup race was the first one at RIR not to sell out in more than a decade, partly because of a weather-related delay. So far this year, two out of five of the cup races have sold out.
ISC anticipates earnings in 2009 to be between $745 million and $765 million, which is as much as $40 million less than was made in 2008, according to recent financial statements. The anticipated loses are partly tied to the turmoil in the U.S. auto industry, a major sponsor of NASCAR.
“We also find [fans] are spending a little less when they get to the racetrack, but they love the sport like nothing else,” Fritz said. “And they are going to do everything they can to hold on to their family vacations.”
In an effort to make travel more affordable for fans, the track has forged a deal with AirTran to reduce airfare to Richmond by 10 percent for the upcoming race weekend. Fritz said they are negotiating with area hotels to lower rates during race weekends.
Jack Berry, president and chief executive of the Richmond Metropolitan Convention and Visitors Bureau, also spoke at the news conference and said RIR is a boon to the local tourism industry.
“Year in and year out, the May and September weekends are the highest occupied for hotel usage in the area,” Berry said. “This is our economic stimulus, to have racing in the commonwealth.”
Previously on Richmond BizSense: Caution Flag for RIR