Category Archives: hotel

HAH! ITYS! Front Page: Times-Dispatch: “Doubt Cast on Bike Race Numbers”; Mayor Hints at More Big Events!

That 2.9 on the Richter Scale mini-earthquake felt in Mechanicsville early this PM was caused by repeated jumping up and down and victory laps when Sandy the Blogger picked up his paper and saw this headline:

Sandy’s Right:  Taxpayers Got Screwed by Bike Race!

No the actual headline above the fold was good enough:

Doubt cast on bike race numbers

Outside analysts:  Figures look inflated, incomplete, based on flawed technique

Let’s look at the article and see why laps were needed at the Sanders household.

But independent economists who reviewed the economic impact report, which has been used by officials as evidence of the race’s financial success, said the document does little to show how profitable or costly the 10-day event was for the region.

Instead, they said the estimates are unrealistically large and, like most economic impact studies, appear focused on justifying the event rather than measuring its true impact.

Justifying the event!  HAH!  ITYS!  I knew that when I read the article on the economic analysis BUT not being an economist (remember I got a C in economics and I am afraid I remember the brunette co-ed who saved me a seat in the front more than the economic principles in class…but I digress!) I could not directly refute the report.  So let’s let the experts do it instead:

“One of the issues I have with all of these reports is they’re oftentimes — maybe even always — political documents as opposed to scientific documents,” said Dennis Coates, editor of the Journal of Sports Economics and a professor at the University of Maryland at Baltimore County.

“They want to convince people that this was a good idea.”

And why is that?  Coates said it:  It was meant to make political leaders feel good about spending taxpayers’ money for what should have been a privately funded event.  There’s more:

“The numbers that they came up with are simply implausibly large,” said [economist Victor] Matheson, who teaches at College of the Holy Cross in Worcester, Mass. “Every hotel in the Richmond region must have been full with a racing fan for 10 straight days, if these numbers are to be believed.”


But Matheson said the firm would have needed to make a series of improbable assumptions to generate such large spending estimates.

Improbable assumptions?  Those happen in government all the time – no wonder the pols didn’t recognize the numbers!  Sandy said, somewhat bravely at the time, there were fuzzy numbers in the report.  Sandy also said:  Nobody came!  BOTH right I am afraid…

The fact that the crowd number — 640,000 — came directly from race organizers raises red flags, they added.


“I would just emphasize that this spectator number is astounding to me,” Coates said.


According to Chmura, those surveys were conducted around the finish line and in the VIP tent area.

That could further inflate impact estimates, Matheson said, because die-hard cycling fans who traveled from out of town would seek out those prime viewing spots.

OOPS!  There’s even more – because the official estimate was that 72,000 people came and stayed in town.  Watch carefully…

“That means every single hotel room in the entire greater Richmond area should have been full with a racing fan if these numbers are to believed,” Matheson said, noting Richmond Region Tourism lists about 18,000 hotel rooms in the area.

Instead, throughout the event, rooms across the region showed up as available on booking websites. And, for all of September, the city saw hotel bookings drop. In the region as a whole, hotel occupancy was at 63 percent for the month.

Mike Watkins, president of the Richmond Region Hospitality Association, said the bike race had a minimal impact on hotel occupancy until the final weekend of the race.

I think I’ll take the real, genuine numbers and stats over the official report…

Sandy said:  Taxpayers got screwed, too!  Remember the taxpayers money spent was $14 million.  (In fairness, some was on infrastructure that may have been needed but was not to be budgeted for until future years – so that is betterment for sure!) The economists seem to cast doubt on the rosy tax revenue that came in:

Coates and Matheson also questioned why the report consists entirely of estimates rather than an accounting of actual spending.

“In advance of the event, you want to predict what is going to happen,” Coates said. “After the event, you want to check the actual predictions. So looking at the actual numbers is how you check the predictions.”

As some of the teenagers I know would say:  NO DUH!  But the hard numbers say little if any effect:

In addition to the hotel occupancy data that showed declines in Richmond, meals tax receipts in the city were stagnant during September.

Outside of those hospitality indicators, the city saw overall sales tax receipts in Richmond increase 5.32 percent in September — better than the state as a whole, which saw a 4.37 percent increase.

OOPS AGAIN!  And the official report admits they do not know:

“We did not use those as inputs for our study because there is no way to differentiate data on hotel booking, retail sales or tax receipts and allocate them into those related to Richmond 2015 and those not related,” Shuai said.

The conclusion of the independent economists is devastating for the “official report” and the pols that bought into it:

Christine Chmura, CEO and chief economist at Chmura Economics & Analytics, defended her firm’s report: “The way we performed the economic impact for Richmond 2015 is the standard way such impacts are performed.”

Coates and Matheson didn’t dispute the point.

“I think they are doing something that is exactly what everyone else in their industry is doing,” Matheson said. “The problem is the entire industry is using a technique that is pretty hopelessly flawed.”

Memo to supervisors in Henrico and Hanover and councilpersons in Richmond when they bring the next big event to you for your taxpayer funded contribution:  Remember Sandy’s Third Law:  Never Buy the Official Numbers.  Ought to assume that they are inflated.  Time to say NO!  You can be safe in assuming I’ll be at the Hanover supervisors meeting saying exactly that.

Let me make the point before someone accuses me of having no community spirit:  I am all for big events in the Richmond area.  And yes, factoring into the event ought to be what will it cost for policing, security and other needs like that.  BUT the costs of the event ought to have been paid by the private sector not the public one.  Raise the money.  It would be better to raise enough to pay back (imagine that idea!) for the infrastructure and security etc.  And if we had to pay extra for necessary infrastructure, maybe we should have declined the event.  Politicians were sold a bill of good but they were willing to be sold.  Some skepticism ought to be in order.  Especially when you have the severe disruption this race caused the area.  I recommend a vinyl button with:  HECK NO on it.



Article written by: Elwood "Sandy" Sanders