Business of Speed

The Money Behind the Motorsports Industry

By: Tim Frost

Date: December 18, 2017

Speed Weeks 2018 will have a new appearance across from Daytona International Speedway. This month we will look at detail behind these projects.

Daytona Rising:

The development of Daytona Rising was one of the largest investments in motorsports facilities in the world. At $400 million, this cost rivaled the building a new superspeedway or major league sports hockey / basketball arena or baseball stadium.

Billed as a “reimagining of an American icon”, it looked away from the race track and towards the needs of the customer – whether they be a fan or visitor. Its focus on meeting the “social” aspects of today’s consumer – gathering in “neighborhoods” – or the ability to watch the action on flat screen monitors in themed entertainment places or streaming on their personal devices.

The economics of motorsports events from a consumer perspective are evolving – largely dependent on gate admissions for it largest source of revenue – declining attendance has forced companies to revisit their financial model. Increase the per cap spend with the existing customer – this can be accomplished by offering a premium experience with food, beverage and entertainment options in addition to the standard ticket purchase price.

This can also attract the interest of the large companies. Typical sponsorships with billboards, signage, and event entitlements have been the norm – it is moving towards a focus more on “partnership” – engage with the audience in a more meaningful diverse multi-level platform. The Daytona International Speedway “injectors” offered companies a unique way deepen their ties to race fan. It resulted in multi-year multi-million dollars spend that was necessary to underwrite this large capital investment.

One Daytona:

An ambitious real estate project being developed by International Speedway Corporation is gaining traction as the new racing season gets underway. After a slow start, the $150 million project featuring 300,000 sq. ft. of retail, dining and entertainment complex is taking shape. The initial openings early last year included a 12-screen theatre complex and a Bass Pro Shops outdoor store. The off-season will see the beginning of several new establishments for retail shopping, food and gaming.

The hotel sector will be a key component of the One Daytona project. The Marriott brand will be represented by a 105-room Fairfield Inn and Suites and the flagship One Daytona – an Autograph Collection with 145 rooms. There will also be an apartment complex with 276 units.

This type of real estate development is more favorable then a special purpose sports facility. These projects involve partners, which will diversify the economic risk. In addition they are viewed by governmental officials as serving as catalyst for growth. One Daytona qualified for $40 million in economic incentives from city and county authorities.

The ultimate goal is to create a development with life-style amenities that will appeal to residents and tourists on a year round basis. As race fans arrive for Speed Weeks, they will be able to enjoy more activities away from the track. Their spending creates economic impact that continues to strengthen Daytona as the World Center of Racing.