Tuesday, January 17, 2012

Economic Indicator for the One Percent - Key West's 25th Annual Race Week

Putting up the divisional bulletin boards.
Here is an indicator of the prosperity of the One Percent - the density of yacht racers. The first big yacht regatta of 2012 is the Key West Race Week. According to the race staff I spoke with in Key West, recent attendance has been declining:
Peak year - 320 boats
2011 - 135 boats
2012 (expected) - 125 boats
2012 actual number of boats - 112.

I took some photos of the Key West headquarters, where the three divisional bulletin boards were being nailed up (see photo). They close off an entire street during Race Week. 

Interviews with Premiere Racing, the Key West race manager, explicitly mention the poor economy as the reason for the decline in boat entrants. For example, last May there was a question to the organizer, Peter Craig, about Race Week cutting back from five to four days after the 2011 dropoff, or even continuing at all. The question continues to be asked and a four-day race may emerge for some boats. The key to the event is in the sponsorships and Craig was confident in mid-2011 that he would assemble a good sponsor list for the 25th annual Race Week, his 19th. He has done this! Nautica was the title sponsor in 2010. Quantum Sail Design Group is in 2012. Kelly's Bar and Brewery (the "southernmost" brewery not counting Hawaii) is the headquarters venue.


The headquarters venue, Kelly's

The number of boat entrants depends on many factors, such as the number of new boat designs, the number of designs not competing any longer, and the number of boats entering in each of the main boat classes. But overall the number of boats is related to the economy and the willingness of boat owners to spend the money and time to get down to Key West for a week. An economic recovery in 2012 can’t come too soon for event organizers anywhere. I don't know Premiere Racing's burn rate, and he may be able to carry on indefinitely, but Craig told an interviewer that he has to recreate his sponsorship and financing every year. To paraphrase a comment attributed to the great economist Lord Keynes:
An event organizer can go broke while the One Percent are postponing a traditional activity for just a few years.
If you want to follow this colorful event, go to Quantum's blogspot page and sign on for one of the various real time reports of the race.