Hitting reset on the NASCAR Hall of Fame

Executives at the Charlotte Regional Visitors Authority dread hearing the rosy projections made for the NASCAR Hall of Fame in the months before the $200 million, publicly funded racing shrine opened in 2010. At the time, the visitors authority, under a different CEO, predicted first-year attendance of 800,000 and an operating profit of $800,000.

Instead, actual first-year attendance stalled at less than 300,000 while the museum posted an operating deficit of $1.5 million.

Since then, the narrative for the CRVA-run hall of fame has shifted. After several years of disappointing results and constant media attention about missed attendance and revenue forecasts, the visitors authority stopped providing monthly attendance updates. More recently, the agency shifted its financial reporting to a consolidated figure, dropping its previous venue-by-venue profit-and-loss calculations. The authority manages the convention center, the hall of fame, the Bojangles’ Coliseum-Ovens Auditorium complex and handles setup and back-of-house services at the NBA arena. It also recruits conventions and events and promotes the area as a travel destination. Combining all of those operations with the hall of fame into one consolidated figure makes it impossible to know whether the NASCAR Hall of Fame has, or ever will, reach break-even, as promised by city executives in 2015.

CRVA CEO Tom Murray, during an interview this week at his uptown office, offered a potential headline for the organization’s annual report. Referring to the portion dedicated to the NASCAR Hall of Fame, he said, “Revenue up by 7.6%.” 

Murray did not mention another possible headline: “Attendance down by 7.8%.”

Later in the interview, referring to the attendance dip, Murray attributed most of the decline — 10,000 of the 13,000 fewer attendees — to private event business that proved more lucrative in actual dollars than the previous year by 19%, but totaled fewer people.

    Losing momentum?  The city committed to backing the $200 million NASCAR Hall of Fame based on attendance projections of 800,000 in the first year. It failed to reach even 300,000 in 2011 and attendance never again eclipsed 200,000. 

 

Losing momentum?
The city committed to backing the $200 million NASCAR Hall of Fame based on attendance projections of 800,000 in the first year. It failed to reach even 300,000 in 2011 and attendance never again eclipsed 200,000. 

“I like to say you can’t take event attendance to Bank of America to put in our account,” Murray said. “We put cash into our accounts and, so, the revenues are clearly more important.”

Murray and Winston Kelley, executive director of the hall of fame, pointed to what they described as a successful change in strategy at the NASCAR museum as the most important takeaway from the revenue gain in fiscal 2017. (The hall of fame operates on a July 1-June 30 year.) For several years, the visitors authority has emphasized the museum as an asset to help lure conventions and as a private event and meeting site. 

The hall of fame is booked for 300 private events a year at rates of $500 to $6,000 each. In many cases, depending on the size of the private event, exhibit tickets and CRVA-provided food and drinks can — and, in certain cases, must — be purchased.

Murray explained the business shift at the hall of fame as a mix of 40% generated by general admission ticket sales, 40% through private events and 20% from sponsorships and parking. The annual report submitted to Mayor Jennifer Roberts and City Council this week did not include a breakdown of revenue, instead stating the overall gain of 7.6% over fiscal 2016 to $6.7 million. The visitors authority targeted 5% revenue growth for fiscal 2017.

Ron Kimble, a former deputy city manager and city manager, said in 2015 the hall of fame reduced deficits that year to $500,000. He predicted it would break even in 2016. Whether it did remains unknown because the visitors authority stopped calculating operating profits and losses for the hall of fame and other venues, basing the decision on its “One CRVA” operating system that allows multiple venues and divisions to share employees and services such as accounting, maintenance, marketing and human resources.

The hall’s construction debt and exhibits are paid from funds generated by an additional 2% room tax on local hotels passed in 2006. Mohammad Jenatian, head of the Greater Charlotte Hospitality & Tourism Alliance, told the Charlotte Business Journal that, while there is always room for improvement in ticket sales and attendance, those aspects have never been a focal point for the tourism industry.

Jenatian emphasized the industry is paying for the NASCAR museum through the room tax and, despite the hall of fame’s ups and downs, hotel executives and others see the larger benefit of having it here. “Other people have complained about the NASCAR Hall of Fame and attendance. We couldn’t care less about how many tickets are sold.”

Instead, Jenatian said the industry considers the museum to be one of the best and most important investments in Charlotte to support tourism. Building the hall of fame reinforced the region’s commitment to NASCAR itself, helping retain race-team headquarters in and around Charlotte while also bolstering the case for Charlotte Motor Speedway to remain the host of the sport’s annual all-star event.

Without the hall of fame, Jenatian said it’s likely the all-star race would have been moved to another city. Combined with the speedway’s Coca-Cola 600 race, held in Charlotte each May the week after the all-star event, racing-related spending contributes $230 million to the local economy, according to speedway-commissioned estimates. Independent economists routinely dispute sports-tourism impact estimates, saying they are usually worth about 10% of the published figure and largely represent a reshuffling of existing entertainment spending.

Beyond keeping events and much of the NASCAR industry in Charlotte, Jenatian agreed with visitors authority CEO Murray that the uniqueness of the racing museum continues to be a boon to help bring meetings and conventions to town. Hotel occupancy and room rates, among other industry measures, have been on a mostly steady rise in recent years, a trend Jenatian credited, in part, to the hall of fame.

Without it, he added, the city would not have landed the 2012 Democratic National Convention, the largest and highest-profile convention in the city’s history.

“The hall is an advantage for us when we’re trying to attract meeting planners,” Murray said. “They really are thrilled with the space. They tell us that in surveys. We know that it is authentic to Charlotte.”

NASCAR teams, sponsors and drivers have increasingly relied on the hall of fame as a go-to venue for press conferences and announcements, bringing media, fans and attention to the venue. Murray and Kelley offered a muted response to questions about the fading appeal of NASCAR itself. Ticket sales and TV ratings in NASCAR have declined at much higher rates than in rival leagues such as the NFL, NBA and Major League Baseball, but Murray waved off the notion by saying all sports and entertainment properties are grappling with pressures from digital media and shorter attention spans. In addition, the “bucket list” aspect of visiting a hall of fame for die-hard fans makes the Charlotte NASCAR museum different than attending a regular-season race, Murray said.

New and refreshed exhibits, including one dedicated to the Disney Cars movie franchise, continue to score well with visitors, Kelley said.

Recent and upcoming changes in operations include the first ticket price increase since the museum opened. In July, admission went to $25 from $19.95. Kelley noted the new price includes tax; with tax, the old rate was $21.40. Next year, the visitors authority plans to take over the museum merchandise store from an outside operator, a move that is expected to boost profitability while increasing flexibility.