From the Speedway to Johnson County: The Ripple Effect of the Indy 500
Every May, the roar of engines from the Indianapolis Motor Speedway draws in hundreds of thousands of racing fans from around the world to central Indiana. Not only is the 500 the greatest spectacle in racing but also a major economic driver for the entire state of Indiana. A study commissioned by the Indianapolis Motor Speedway (IMS) and conducted by the Indiana University Public Policy Institute found that in one year IMS events generate over $1 billion in economic impact for the state, with the 500 in May generating over half of that figure alone.
However, these economic impacts don’t stop at the Marion County line as about 30 miles south, Johnson County can feel the engines humming too.
Kenneth Kosky, executive director of Festival Country Indiana (FCI) Visitor Center, has watched the trickle-down effect happen firsthand since taking the role in 2017. The dynamic is straightforward as he explains that when an event of this magnitude, like the Indianapolis 500, descends on the city, hotel rooms near the Speedway fill up quickly, and price tags climb as the demand for lodging grows. Because of that, visitors need to start looking elsewhere.
Kosky said, “For a big event, there’ll be some hotel scarcity. Some people can’t find a hotel in their price range close to the Speedway, so they’ll make the decision to go out a half hour, 45 minutes to stay somewhere less expensive.”
That half hour drive south lands them directly in Johnson County. Greenwood, the county’s largest city and the closest to Indianapolis, tends to absorb the most impact immediately as hotels fill there first before the demand pushes further south to other parts of the county.
Kosky explained that when he first became executive director, hotel representatives on the county board weren’t asking for advertising to attract race-weekend visitors because they already knew they were coming. Instead, they decided to divert those funds towards slower periods of the year when advertising is more important to occupancy numbers.
The hotels are not the only businesses that benefit from the effects of the Indy 500. People visiting Johnson County for the 500 will often find themselves staying around the county. This results in restaurants seeing busier tables and more guests, wineries like Mallow Run in Bargersville see more activity from the overflow of people in town for the race and offer an experience that guests would not be able to get elsewhere in the shadow of the Speedway.
Downtown Franklin, with its historic charm, has drawn visitors who’ve returned even after the race weekend has passed. Kosky discussed this by mentioning that “We’ve has people come back to downtown Franklin and say, ‘This is just the most charming town, we’ll definitely be back.”
However, a challenge that these local businesses face is that they cannot connect the dots between additional foot traffic and the race. Unlike other events happening in the city, fans of the Indianapolis 500 don’t arrive wearing credentials or gear and blend in with regular foot traffic in the area. Because of this a restaurant may see a spike on the Saturday before the race without knowing why.
Some sports bars and other themed establishments do capitalize on the additional traffic by advertising drink and food specials in the days leading up to the race, but Kosky says the majority don’t actively market to the race crowd.
For those visitors who do arrive early for the race festivities and are looking for something to do before the green flag drop, FCI stocks hotel brochures with local attractions, from K1 Speeds go-kart racing to the county’s ever-growing calendar of live music and festivals. The goal is very simple, to keep visitors and their money in the county as long as possible.
Kosky is also thinking ahead as FCI is currently funding the construction of outdoor amphitheaters in Trafalgar and Edinburg, adding the county’s existing venues. This is based on the logic that if people come to the county for one event, they are likely to come back for more and add more money into Johnson County’s economy.