Rally attendance low but officials say revenue numbers show ‘resiliency’ of event

Rally attendance low but officials say revenue numbers show ‘resiliency’ of event
BY WENDY PITLICK
Black Hills Pioneer
Published:
Thursday, September 11, 2008 12:05 AM CDT

STURGIS - Estimated attendance at the 2008 Sturgis Motorcycle Rally was at just a little more than 400,000, an 18.2 percent decrease from 2007, but Rally officials say the event showed an incredible resiliency for the city in terms of sponsorship and sales tax revenues.

Sturgis City Manager David Boone said Monday that though state sales tax dollars were down 25.7 percent this year, with just over $400,000 collected, city sales tax numbers were only down by 8 percent, with a little more than $200,000 collected. That’s significant when considering the local effects of the Rally, Boone said.

“What that tends to tell me is that the Rally being a smaller size hurt the region more than it did the city,” Boone said. “Was it a disaster? Hardly. I was kind of amazed that we saw the resilience in the attendance, sales tax, vendor fees and sponsorship revenues. Sturgis only being down 8 percent (in sales tax revenues) shows that we still have strong economic strength in the Rally.”

Sponsorship revenues this year were up significantly by 68.6 percent over last year with a total of about $350,000. City property rentals were also up by 24 percent.

However, Boone reported that vendor fee revenues were down by 13.6 percent this year, with the city bringing in about $250,000, compared to about $275,000 last year. Vendor sales for this year were also down by 11.5 percent.

“There is no doubt that it was lesser than what it was in days gone by,” Boone said of the lower numbers. But, Boone said, the numbers were still high considering the economic uncertainty the country is facing now with gas prices increasing by 47 percent over the last year, unemployment rates rising and the current mortgage crisis.

“The bottom line is that the Sturgis Motorcycle Rally is still the largest motorcycle lifestyle event experience in the world,” he said.

Some vendors and businesses, Boone said, reported record sales this year. Many vendors who brought high-end custom motorcycles priced between $40,000 to $50,000 reported record sales this year. “They were very pleased with the Rally they had,” Boone said.

Boone’s presentation about Rally numbers was done before a standing room only crowd of interested residents, business owners and city officials at the Sturgis Community Center. During discussion, residents and business owners expressed concern about the city’s transition to a new sponsorship agent. Ronda Oman Gusinsky, who has handled the city’s sponsorships for the Rally every year since Sturgis took over the event’s management, has resigned and the city is exploring new options for her position.

One resident suggested that rather than relying so heavily on sponsorship dollars for the Rally, city officials should concentrate on welcoming the vendors more and encouraging the vendors to bring their existing customers to the Rally. Another resident also suggested that the city work out cooperative agreements with Rally attractions and entities such as Glencoe Camp Resort, the Buffalo Chip Campground, the Full Throttle Saloon, Black Hills Harley Davidson, neighboring communities that do Rally events, and the S.D. Department of Tourism. The agreements, he said, could give the city more to offer its sponsors, therefore increasing sponsorship dollars.

“If you get the people who are actually putting the Rally on here all together to support your effort, all of a sudden you have something to sell your sponsors,” he said. “It is something that needs to be discussed.”

All residents who spoke up at the meeting expressed concern about the city outsourcing its sponsorship efforts to a big-city company that doesn’t understand the Rally event.

Following comments, Boone assured the public that the city is exploring its options for selling sponsorships, and he invited all members of the business community to be part of that process.

“Change is coming,” Boone said. “There is no doubt about it.”

 

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