Sturgis rally draws 555,000, city says

KELOLAND.com Original

STURGIS, S.D. (KELO) — The attendance at the 2021 Sturgis Motorcycle Rally hit 555,000, according to the city of Sturgis.

Excluding the 75th anniversary in 2015, that’s the highest attendance since at least 2000 when more than 600,000 attended the rally, according to city records.

The attendance topped 700,000 in 2015.

The 2021 rally, “was really, really busy to start with,” said Jerry Cole, the rally and events director.

City manager Daniel Ainslie and Cole said people came to Sturgis in July.

Some came and left before the rally while others came early and stayed, Ainslie said.

It’s city policy not to estimate any future attendance, Cole said. But there are reasons he thinks 2022 could be a good year.

Cole said if Europe and Asian markets are more open to residents traveling that would have a positive impact on the Sturgis Motorcycle Rally attendance.

“This year, if we would have had those markets, we could have had another 100,000 plus people here,” Cole said.

Although not an official attendance count, the South Dakota Department of Transportation counts done during the rally do indicate the size of the attendance. Sturgis officials have said they use S.D. DOT traffic counts, the tons of garbage removed during the rally and other factors to determine attendance.

The S.D. DOT counted about 525,000 vehicles at multiple entry points for this year’s rally.

When half a million people come to town, it means revenue for the city of Sturgis.

The city’s net profit for 2021 was $1,112,889, according to the 2021 rally report.

Ainslie said the city’s income was lower than expected in large part because July sales revenue was so high. July sales tax revenue is not included in the revenue from the 10 days of the rally in August.

“We had such a large July,” Ainslie said. “The sales tax attributed to the rally was smaller than it should have been.”

A lot of companies that typically participate in the rally were not traveling yet in 2021, Ainslie said. Because of that, there were fewer rented spaces, shows and exhibits, Ainslie said.

The city made a change several years ago to gain additional revenue.

The city started working with state Department of Revenue agents to make sure vendors were properly recording point of sales to accurately reflect sales, city manager Daniel Ainslie said in an Aug. 10, 2020, KELOLAND News story.

The city was able to make two big changes this year that produced additional income, Ainslie said on Oct. 26.

The city allowed open containers of alcohol in a specified area of the city.

“That did make a difference. People stayed downtown longer,” Ainslie said. Not all of the increased downtown traffic can be attributed to the open container allowance but it made a difference, he said.

Several months before the rally, the city was able to secure the license agreement once held by SMRI Inc. SMRI once held the license agreement for the use of Sturgis Motorcycle Rally or associated wording. SMRI was originally created to collect royalty fees from those who wanted to use the official Sturgis rally intellectual property. Royalties were donated to local charities. But, Ainslie said, SMRI dissolved after several lengthy court battles.

Now, the city of Sturgis has the intellectual property for the official Sturgis Motorcycle Rally licensing, Ainslie said. So when a vendor such as a t-shirt seller, wants to sell t-shirts with the official Sturgis Motorcycle branding, they pay the city a royalty fee.

The fee is a structured fee and could be applied to the number of products sold, for example, Ainslie said.

The royalties have generated about $116,000 in about five months, Ainslie said.

The royalty revenue should grow in the future, he said.

The 2019 net income was $1 million but it was slightly higher in 2017 and 2018. The first year of the COVID-19 in 2020, net income was about $900,000.

Ainslie said while the city earns an income from the rally, charities also benefit.

The 2021 rally generated about $1.1 million for local charities, he said.

“All that money comes from outside the region,” Ainslie said.

That money goes to museums, sports teams, ambulance services and other non-profits and groups, he said.

The 2022 rally will be Aug. 5-12.

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