“Gentlemen, start your economic engines”

Lagging attendance, sponsorship losses, and the auto meltdown in Detroit hover over NASCAR, but the Sprint Cup race this weekend at Richmond International Raceway will still have a huge economic impact on the area.

There will be as many as 4,000 people working at the raceway complex over the weekend; the traveling vendors are still setting up shop; and RV parking will continue to provide a little extra income for nearby property owners.

The raceway generates as much as $467 million in direct and indirect economic impact each year, according to a recent study commissioned by RIR.

The financial impact of this race may be diminished somewhat, as evidenced by soft hotel bookings reported earlier this week by BizSense. But track officials are still hoping for a sellout, according to Richie Denzler who is RIR’s manager of community and public relations.

“We remain optimistic for a sellout, but we don’t know if that will happen,” Denzler said, “All the tracks have seen people buying a little later.”

Sellout or not, the dollar amount of ticket sales will be less than last spring’s event. The track lowered ticket prices between 25 percent and 50 percent on 18,000 seats to $55 and $40. Prices were cut at the concession stands as well, by about 25 percent for most items. The concessions are run by Americrown, a subsidiary of International Speedway Corp. which owns RIR.

Denzler said ticket sales have started to pick up in the last two to three weeks. If there isn’t a sellout it will be the second race in a row after a decade filling every seat.

As for good news, Denzler said corporate suites have sold out and the track is one of the few to add a new sponsor this year. Miracle Gro recently signed on as the fan hospitality sponsor. This is the fourth year Crown Royal has sponsored the May race.

RIR does stand to lose one major sponsor: Chevrolet. The division of General Motors, which is the sponsor for the September race, announced last summer it was cutting sponsorships at 12 tracks including RIR. BizSense reported in December that its contract with the raceway expires this year, and RIR spokesperson Aimee Turner confirmed the track would most likely have to find a new title sponsor for 2010.

Despite the economic doom and gloom following the NASCAR circuit this year, Denzler said this race doesn’t feel any different than any other during the five years he has worked for the track.

It’s still business as usual at the campground at Meadowbridge Road and Azalea Avenue according to campsite manager Robert Halstead.

The $150 fee to park an RV remained the same as it has for the last five races, Halstead said. He wasn’t sure if the camper village would fill up this year, but he thinks it might.

“Personally I think people are ready to come to the race since they missed the last one,” Halstead said. “The economy is bad, but gas prices are low.”

Fewer than 200 campers arrived for last fall’s race, compared to the 500 that usually fill the site. As of Wednesday there were fewer than 50, but Halstead said most campers don’t arrive until Thursday.

Across from the campsite, several traveling vendors set up tents in a gas station parking lot.

Jay Smith, a vendor from Ohio, said race fans are buying fewer souvenirs than they normally would but sales so far this season have been dependent on race attendance.

“The well attended races, the business was better,” Smith said.

Smith, who has been working 20 races a year for the last 10 years, said races in Bristol and Michigan are the best for sales.

“Richmond is about in the middle, but it used to be near the top,” Smith said.

The economic impact of this year’s race probably won’t be near the top either, but perhaps because of the economy it’s an even more vital engine.

RIR gets ready for May race weekend

Hotel bookings in the pits for race weekend

Hotels across the metro region have dropped rates to lure NASCAR fans to Saturday night’s race at Richmond International Raceway.

But even at lower prices, hotel managers expect to have plenty of empty rooms.

“Quite honestly, I think the economy has really impacted people’s decision to come to the race this year,” said Fritz Schwartz, general manager of the Westin Richmond in the West End.

Schwartz said there has been very little response to Westin’s special offer; the hotel is offering rooms for $179 during NASCAR weekend, about 5 percent off the regular rate.

This is the first race weekend for the Westin, which opened in December. Schwartz said the hotel had originally planned to charge $299 a room this weekend, but like many other hotels decided to drop the high premium normally associated with Richmond’s semiannual race.

“It’s not so much about dropping the rate to get swarms of people, it’s just to keep up with what your competitors are doing,” Schwartz said.

Race weekend is usually a boon for the local hotel industry, consistently the most occupied days of the year in terms of hotel usage. Last minute fans often book rooms as far away as Fredericksburg or Williamsburg, but this year there is plenty of vacancy close to the track.

RIR, in conjunction with the Richmond Metropolitan Convention and Visitor’s Bureau, started a campaign last month urging hotel owners to lower rates for the upcoming race. The raceway has a list of about 70 area hotels on its website that agreed to participate.

Some hotels are offering race weekend rates 20 percent to 50 percent less than in 2008, and many have also eliminated minimum stay requirements, according to RIR’s website.

The Doubletree Hotel Richmond Downtown is usually booked for race weekend months in advance, but this year there are still rooms available, said General Manager John Cario. For last year’s May race, the hotel charged $250 a night; this year, the highest rate is $179.

The Doubletree is experiencing attrition from NASCAR teams as well.

“We have a few small teams with us, but a lot of the teams due to sponsorship deals didn’t get back this year,” Cario said.

Part of the reason bookings are down is because of an increase in the hotel supply, Cario said. The room supply in the downtown and airport segment was up more than 13 percent in the first three months of 2009 compared to the same period last year, according to Smith Travel Research.

The Clarion Richmond Airport Hotel reduced its rates and dropped the minimum two-night stay required in the past, said General Manager Mike Turner.

Even at $119 a night, Turner said bookings remain slow compared to previous races.

“Typically the hotel would be full this weekend or very close to it,” Turner said. “This particular weekend, we have plenty of rooms available.”

Neal Kalyan, general manager of Americas Best Value Inn on Williamsburg Road, tells a similar story.

“We dropped our rates, and we’re still not getting reservations,” Kalyan said.

The hotel is offering $90 rooms, about 30 percent off the race rate of previous years. Kalyan said for previous races the hotel is about 90 percent occupied but so far this week only 40 percent of rooms are booked.

“We’ve actually been getting cancellations,” Kalyan said, “People are already changing their minds and not coming.”

Richmond isn’t the only NASCAR destination facing a drop in attendance. Plenty of fans stayed home during last week’s race at Talladega, Ala. The race drew about 142,000, compared to the normal 165,000, according to the Birmingham News. Racetracks in Atlanta and in Fontana, Calif. reached only 60 percent to 65 percent of capacity during this year’s cup races. Daytona and Bristol both sold out later than usual.

BizSense  could not reach RIR officials to ask whether they were expecting to sell out. But if lackluster hotel reservations are an indication, this may be the second Sprint Cup race at the track to fall short of selling out in more than a decade. Last fall’s race was the first, partly due to rainy weather.

There is a slight chance of thunderstorms this weekend, but the darkest clouds hovering over RIR appear to be the ones that are economic in nature.

Pipeline: Commercial Real Estate Round Up for 1.23.08

Richmond International Raceway purchased a 35,300 square foot building at 4001 Carolina Ave. in Henrico for $1 million. Robert L Borum and Associates LLC purchased a 9,600 square foot flex-space building at 8191 Staples Mill Road in Henrico County from Rastek Construction and Development Corp. for $1 million. Click on the story link for more deals.

Richmond International Raceway purchased a 35,300 square foot industrial building at 4001 Carolina Ave. in Henrico from Liberty Property Trust for $1 million. RIR plans to occupy the building. Read more

Caution flag for RIR

The financial turmoil surrounding Detroit’s Big Three automakers could throw a wrench into one of the area’s biggest sports engines: Richmond International Raceway.

Domestic automakers have slashed their marketing budgets, which means millions in potential losses not only for NASCAR, but also for RIR and parent company ISC Motorsports.

Chevrolet, a General Motors brand, announced this summer that it was cutting sponsorship deals at 12 tracks across the country. RIR was one of them. Read more

Local NASCAR expert says sport ok

Local NASCAR expert Dr. Jon Ackley said the sport will continue even if the Big Three go under, but either way major changes are on the way.

Ackley is a professor of management at the VCU School of Business and teaches a Business of NASCAR class. He also helps manage a blog about the business aspects of the sport.

BizSense reported earlier today that Chevrolet will not sponsor the Chevy Rock and Roll 400 at Richmond International Raceway after 2009, and that the track will suffer as the Big Three retrench. Ackley said comparable sponsorships at other ISC Motorsports tracks, which owns RIR, cost between $5 or $6 million dollars. Read more