NASCAR hall attendance falling short

A report from the NASCAR Hall of Fame’s first three months of operation shows the $200 million racing museum will likely fall short of its first-year attendance projection, and could struggle to balance its budget.

After 90 days of operation, the hall has attracted 102,731 visitors, an average of 1,140 people a day. If that pace continues, the hall would have about 410,000 total attendance for its first 12 months.

Before the hall opened in early May, hall officials estimated it would attract 800,000 visitors through the end of June 2011, a nearly 14-month period.

“I’m not going to get into projections,” said Winston Kelley, executive director of the Hall of Fame. “I feel like we could have done a better job with a range of numbers, rather than one number. That was an upper-end number.”

Kelley said he was pleased that attendance was “steady” and with the feedback from customers, and that the majority of visitors are from out of town.

The hall is finishing what is expected to be one of its strongest periods of the calendar. There were two top-level NASCAR races in the May along with the Speed Street festival and the hall’s first induction ceremony. And the summer has been a strong period for families, when school is out.

A hall survey found that 45 percent of its visitors are families. And 70 percent of its customers live more than 100 miles from the hall.

Because it will be more difficult for families and out-of-town visitors to see the hall during the school year, Kelley said the hall will be targeting locals.

“We want that local and regional family market,” Kelley said.

Projections downsized

It’s important for attendance in the fall, winter and spring to keep pace with the summer.

Money from admissions has been budgeted to make up more than 70 percent of the hall’s projected revenues of $16 million, according to its fiscal year 2011 budget. The city of Charlotte built the hall of fame, and the taxpayer-supported Charlotte Regional Visitors Authority operates it.

When the CRVA released its budget for the upcoming year, it assumed 575,000 people would visit the hall in the first year. That was a downsizing of a consultant’s projection of 800,000 for the first 14 months, which had been touted by hall officials.

Attendance has been pegged at 400,000 annually in future years.

Through May and June, the hall generated $1.8 million, $65,385 more than it budgeted.

The hall generated far more revenue in May than it projected, and far less money in June than it originally thought.

In June, the hall generated $509,754 from ticket sales and $175,732 from other sources, such as simulator rides.

If June’s total revenue of $685,000 is indicative of the rest of the year, the hall would generate about $8 million in revenue.

The CRVA budgeted $15.3 million in expenses. (Some of the expenses are for royalties to NASCAR, which include 10 percent of admission revenue. If the hall sells fewer tickets than projected, its projected royalty payments decline.)

Tim Newman, chief executive officer of the CRVA, said he believed the early attendance numbers were “a good base” to plan for the rest of the year.

He said it’s too early to use early revenue data to project for the rest of the year. He said the hall has been rented for special events more than projected.

“That’s been heavier than we thought,” Newman said. “I don’t think you can draw any conclusions.”

Visitors like what they see

The hall also said the average distance driven to visit the hall in its first 10 weeks of operation was 368 miles.

Kimberly Meesters, a Hall of Fame spokeswoman, said that shows the hall is fulfilling its mission of creating tourism.

Kelley said he was pleasantly surprised by how far people had come to see the hall.

“When we first saw that number, I wondered: Is that skewed upwards because of race week?” Kelley said. “But it’s consistently been more than 300 miles.”

The hall has gotten positive reviews from the media, and Kelley said the hall’s surveys show people are pleased with their experience. The hall said 552 people were surveyed during the first two weeks of July, and 95 percent said it met or exceeded their expectations.

“We will continue to build on it,” Kelley said. “We’re just building our brand. Word of mouth will help tremendously.”

The hall drew 62,558 people in May and June for a daily average of 1,228 people, according to the hall. Attendance was 33,312 in July (1,074 average) and 6,751 from Aug. 1 through Sunday (844 average).

The city built the hall, primarily through a 2 percent increase in the hotel/motel occupancy tax. Those tax revenues have slumped because of the recession. The city has said it has reserves of roughly $24 million to cover any short-term shortfall.

The city also took out a $21.5 million loan from Bank of America and Wachovia backed by the sale of corporate sponsorships for the hall. The hall also has to pay back an additional $5 million to the city, with the money also coming from the sale of sponsorships.

The hall so far gotten 10 corporate sponsors — NASCAR Performance Group, Lowe’s, Mars, Belk, Food Lion, Sunoco, Bank of America, Wachovia, Coke and Panasonic — which have committed $4.5 million total.

If the city can’t pay off the loan, the banks have no way get their money back. The hall’s original plan was to pay off the loan in 12 years, and said it is "focused on achieving that objective."