King of the Hammers: Boon or Bust for Local Economy?

January 25th, 2016 by admin

Major annual events like the Super Bowl and the Indy 500 are noted for injecting nearby businesses with cash transfusions and being boons to local economies. The annual Nitto King of the Hammers held at Johnson Valley, California is no exception.  The tenth edition of King of the Hammers will be held from January 29-February 6, 2016. The positive economic impact of the weeklong activities of the “Ultimate Desert Race” ripples out into surrounding areas as attendees make last gas stops, grocery runs and seek accommodations.

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Today, there are entire businesses practically dedicated to King of The Hammers. Jimmy’s 4×4 of Cortez, Colorado along with Sparks, Nevada’s Trent Fabrication make chassis almost exclusively for Ultra4. Nearer to Hammertown, San Bernardino-based Bomber Fabrication derives much of its business from the annual race down the road.

Five years ago, Johnson Valley was threatened to close down by the Marines and Ultra4 was fighting to keep the land open to the public. Surveys conducted then estimated that King of the Hammers and visitors to the Johnson Valley area generated somewhere between $71 million and $191 million annually for small businesses. Since then, the event’s spectator count has roughly tripled, so those revenue estimates have surged even higher.

“In 2007, 12 friends met in the desert and raced for a case of beer and bragging rights,” says Ultra4 Communications Director Shannon Welch. “Today, more than 430 participants will take part in the 2016 Nitto King of The Hammers powered by OPTIMA Batteries.” Welch has been recreating in the desert for the last decade and remembers many weekends where there would be no more than a dozen people in Johnson Valley even during perfect weather. “King of the Hammers has introduced the Johnson Valley OHV area to off-roaders and now on a perfect weather weekend even if there’s not a race there can be thousands out there.”

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Wheeler’s Ship It Shop is a local business on the lakebed that racers take advantage of for final shipments of much needed automotive parts. “What they break, they have shipped in to us and it’s a win-win situation because we’re a mile up the highway, charge a modest handling fee and they get their parts,” Joyce Wheeler, owner of Wheeler’s Ship it Shop. “We appreciate the business and look forward to King of the Hammers every year.”

It’s not just the auto industry that benefits from the influx of spectators that terraform the area. “We deliver pizzas to King of the Hammers and it increases our business by about 40 times so we end up doing $50,000 of business that week,” says Michael Henson, owner of $5 Pizza on Old Woman Springs Road. Delivery drivers pick up things people need from the gas station and cater to everybody during the whole week of events.

Measuring the regional economic impact generated by events and festivals is an inexact science, but scale is typically a good barometer to assess financial benefits. Visitor spending behavior and whether they are return visitors are other factors to weigh in. High profile sponsors like Nitto Tires, 4 Wheel Parts and OPTIMA Batteries promote the event and spur more spending. Goods and services like lodging, food, gasoline, supplies and merchandise are purchased during King of the Hammers, stimulating the local economy that help outweigh the considerable costs of hosting the elaborate event.

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