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Undeniable pocketbook power: Sturgis economic impact could reach $1 billion

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Dave McMahon, Senior Editor
April 2, 2012
Filed under Features, Top Stories

Chip’s Woodruff says Rally still a ‘black sheep’

Rod Woodruff, president and CEO of The Sturgis (S.D.) Buffalo Chip, minces no words when describing the economic impact of the Sturgis Motorcycle Rally. With the 72nd annual event that takes over the Black Hills set for Aug. 6-12, Woodruff knows the state’s visitors will once again provide an economic impetus for the region.

Woodruff, a year-round Sturgis-area resident whose 580-acre camping and concert venue embarks on its 31st season at Sturgis this summer, figures that number is in the range of $500 million to $1 billion. Reports have shown the city of Sturgis calculates that figure to be more than $800 million annually combined on Sturgis, the Black Hills and the state of South Dakota.

“Daytona’s $600 million? Revenues generated by the overall effects of the Sturgis Rally have to be more than that, bottom line,” Woodruff said. “In both Daytona and Sturgis, the government people don’t really know or fully understand the economic impact of the events. The published numbers aren’t reconcilable.

“The state of South Dakota only wants to attribute the $10 million in sales taxes to the Rally, and that’s most likely about 2-3 percent of reality. I figure that’s about 2 or 2.5 percent of the real number.”

The state essentially doubles its population during the Rally, and only recently began receiving a promotional boost from the state, according to Woodruff.

“Before [the Chip] came along and innovated Rally tourism outreach and advertising, nobody had promoted the Rally,” he said. “Nobody bought an advertisement that said ‘Hey, come to Sturgis.’ Our state just doesn’t want to do anything for the Rally. It was only three or four years ago that you would see a motorcycle on a state tourism publication, and motorcyclists bring in half a billion dollars-plus every year to an area that’s economically deprived. The Rally is still the black sheep. Isn’t that strange?”

Official statistics show that in 2011, 416,727 attendees stayed for an average of 5.8 days and spent $183 per day. Those totals equate to about $458 million.

“And I believe that people spend more than $183 per day,” Woodruff said.

Woodruff counts radio station and newspaper businesses “who make most of their money during the Rally” among the economic beneficiaries. “People from here rent out their homes and go on vacation. There’s a lot of money spent that’s not taxable.

“When you get right down to it, the positive economic impact of this thing has to be between a half billion and a billion dollars. And that’s in a state that has a $3.9 billion budget. And the state spends more promoting an antique threshing rally than it does on Sturgis.”

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