We sent out a short survey last week to help create a snapshot of revenue expectations of races in 2020 and 2021, and look at how organizations are adjusting to their expectations. The survey closed on Monday, but we expect to do follow-ups throughout the year to track expectations within the industry.
Top Takeaways
- 2020 Revenue shortfalls are expected to be significant for race organizations of all sizes, with the average expectation that they will see 45% of their 2019 revenue in 2020.
- While some recovery is expected in 2021, organizations do not expect a full rebound, with an average expectation that they will see 76% of their 2019 revenue.
- Virtual events or challenges are filling some of the holes, and are expected to make up 28% of revenue in 2020 and 16% in 2021. 40% of respondents indicated that they are adding virtual events or challenges as a new source of income.
- To make up for the revenue shortfalls, organizations are trying to save money by cutting employee costs and reducing software expenses and subscriptions.
Recommendations
As we move into the second half of 2020, it’s crucial to start thinking long term. Create plans with multiple sources of income and/or multiple options for proceeding with events to prevent losing all revenue options.
- Put together a plan for a modified in-person event to demonstrate to your ability to offer a race that keeps the community safe. Section 7 of our Looking Forward document includes examples of in-person events that have happened, and we expect these examples to grow.
- Open your upcoming event with a virtual mindset. You don’t have to wait to be 100% sure to open your late summer or fall race – start by opening it as a virtual event, with the directive that participants will be able to switch to an in-person event if you are able to proceed. This lets you begin engaging with your participants and sponsors – with a built in contingency plan.
- Create new virtual opportunities. Your virtual event doesn’t have to be built off your normal in-person race – you can apply your skills as a Race Director to create new, creative virtual options that will expand your circle of participants. Need an idea? Challenges are in, and their possibilities are limitless.
- Low cost (or free) fundraising online can help you reach your supporters and fund your cause without the overhead of a traditional events. Consider simple donation websites and forms, or explore a hybrid version with a free virtual event that’s focused on fundraising.
- Save money by reducing your technology costs and pausing expensive CRM, Email or web design services. RunSignup’s free CRM, email marketing, and websites can cut expenses until your revenue recovers.
Full Survey Results
Data Set:
779 total respondents
Because event restrictions are often tied to event size, we asked two questions to give us a good about the types of events represented in the resonses.
Size of Organization’s LARGEST Event (last time it was held as normal):
| 1-500 | 39.64% |
| 501-1,000 | 18.79% |
| 1,001-5,000 | 28.31% |
| 5,000=10,000 | 6.95% |
| 10,001-30,000 | 5.41% |
| 30,000+ | .9% |
Number of Participants across ALL of an Organization’s Events (in a normal year)
| 1-500 | 31.92% |
| 501-1,000 | 12.36% |
| 1,001-5,000 | 24.45% |
| 5,001-20,000 | 17.12% |
| 20,001-50,000 | 8.49% |
| 50,000-100,000 | 2.83% |
| 100,000+ | 2.83% |
As you might expect, the largest single segment is smaller races, with 40% of respondents noting that their largest race is less than 500 participants, and 32% of organizations serving less than 500 throughout the year. However, there is a wide spread, with the second-largest segment representing 1,000-5,000 participants and multiple multiple responses across
We also asked what time(s) of year the organization held races. The responses indicate that while fewer of the events occured in Q1 (January >> March), the races represented were held throughout the year.
Time(s) of the Year that the Organization Hosts Events
| Q1 (January, February, March) | 38.48% |
| Q2 (April, May, June) | 61.13% |
| Q3 (July, August, September) | 59.07% |
| Q4 (October, November, December) | 55.98% |
Revenue Expectations
This is the heart of the issue: how much of a financial impact are organizations expecting in 2020 and 2021. The basic takeaway: while larger organizations generally expect to be hit harder, no single segment expects to reach even 50% of their 2019 revenue.
While expectations for 2021 are significantly improved, organizations still expect to see reductions as compared to 2019. Smaller organizations expect to rebound to around 78% of their 2019 revenue, while larger organizations expect a longer impact from COVID-19, forecasting only 67% of 2019 revenue.
The Role of Virtual
Next, we asked about the expected role of virtual events in making up some of that lost revenue from physical events.
Responses in 2020 were relatively clustered, with all segments expecting to see between 24-32% of their revenue from virtual events. In 2021, those percentages drop to 12-33%. While the largest organizations expect to be get the most out of virtual events, the range shows that organizations of all sizes are using virtual events to bridge the gap until physical events return – and they expect to continue to do so even into 2021.
Making Up the Shortfall
With race organizations of all sizes expecting revenue shortfalls in 2020 and 2021, we also asked what changes they are making to reduce their expenses to absorb those shortfalls. Across the board, adjustments have been made. Smaller organizations relying more on cash reserves/other forms of income, and reducing program and operating expenses. This segment likely represents a significant number of smaller races organized for nonprofits, and signals that the programming of the nonprofit is impacted by the revenue reduction.
Larger organizations, with more employees, are the most likely to be furloughing employees or reducing compensation. But they are also the most likely to reduce software/subscription expenses, and the most likely to seek out new revenue sources like virtual events.
Since the chart above can be a lot to take in at once, we have included a table with the data as well.
If you are expecting a Revenue Shortfall, how are you Adjusting your Expenses?
| Adjustment | 1-500 | 500-1,000 | 1,000-5,000 | 5,000-20,000 | 20,000-50,000 | 50,000-100,000 | 100,000+ |
| Using cash reserves/have other sources of income | 39% | 49% | 61% | 68% | 79% | 82% | 64% |
| Creating new revenue sources (i.e. virtual races, challenge events, etc.) | 21% | 31% | 45% | 50% | 61% | 50% | 68% |
| Reducing program/operating expenses (including cutting mission-driven programs for nonprofits) | 38% | 54% | 57% | 58% | 55% | 50% | 50% |
| Reducing compensation across all team members | 3% | 9% | 16% | 28% | 39% | 45% | 32% |
| Furloughing some employees | 2% | 7% | 11% | 19% | 44% | 41% | 50% |
| Reducing software and other subscription expenses | 3% | 9% | 17% | 26% | 39% | 32% | 41% |
| Expect bankruptcy | 0% | 0% | 1% | 2% | 5% | 5% | 5% |
Open-Ended Responses
We included an open-ended option for race directors to share other ways they have adjusted their businesses to deal with anticipated revenue shortfalls. There was one clear answer that we should have included in our options: federal grant/loan programs like the SBA EIDL and PPP programs, with a number of organizations indicating that they were relying on loan programs. Other responses included:
- Cancelling events to eliminate costs
- Finding or relying on a second job
- Re-purposing Race Directing skills to find supplemental work such as contracting in marketing, video production,
- Reducing or eliminating swag for events
Although clearly an outlier, our *favorite* answer might have been this one:
“We actually doubled our revenue this year with our virtual race! And we cut expenses by not producing shirts or medals, day-of-event signage, permits, etc. People seemed to understand the registration fees and donations were going to help needy families in the coming year.”
Race organizations appear to recognize that they are, and will be, facing significant revenue reductions in the coming months, and are beginning to find alternative sources of income as well as areas to save money. It will be interesting to see how these responses change over the coming months as races adapt and seek out new revenue sources.