Posted: Sep 10, 2012 11:24 AM
Updated: Sep 11, 2012 10:04 AM
(AP) - Keeneland's thoroughbred yearlings sale in Lexington won't only benefit horse traders - hotels, restaurants and rental car companies are expecting an economic boost from the 69th sale.
University of Kentucky economics professor Ken Troske told The Courier-Journal that the sale's impact on outside businesses can't be measured in dollars, but the benefits are both tangible and intangible. Troske said it can be tougher to get a seat at a restaurant than the sale itself.
Troske said that if people who come for the sales have "an enjoyable experience," they might be prompted to return to Lexington when they otherwise wouldn't have. The attention surrounding such high-profile buyers as celebrity chef Bobby Flay also brings attention to the region "that's hard to measure," Troske said.
"It does bring people from around the world here that, in absence of the sale, probably have no reason to come to Lexington, Kentucky," Troske said.
Debbie Long, owner of Dudley's restaurant in downtown Lexington, said the $200 million horse sale is a "tremendous boost" to business. The beginning of the sale, when big buyers are in town looking at the top yearlings, usually brings in the most money. Long said spending tapers off as the quality of horses do.
"I used to compare it with my wine sales," she said. "It was like the first three or four nights, we'd sell our big bottles of wine, and the next four or five nights we'd sell our medium-priced wines, and the last four or five nights we'd sell long-neck Buds."
Larry Bell, general manager of the Hyatt Regency by Rupp Arena downtown, said his hotel sees a bump of 20 percent to 25 percent for the first three to five days of the sale. Other hotels might see a more prolonged bump, Bell said.
Keeneland sales director Geoffrey Russell said out-of-town buyers stay through the last day.
"They may not be staying at the Marriott, but they're going to be staying at a hotel," Russell said.
The sales at Keeneland have also seen an increase.
Last year's September sale had gross revenues of $223.5 million, which was stronger than the two previous years, when revenues were less than $200 million. The market boom before the recession saw totals of at least $300 million for five straight years.
This year's sale features a catalog of 3,604 yearlings. That's about two-thirds of the record 5,555 in 2008. The sale begins Monday, takes a day off Friday and then runs daily through Sept. 21.
Keeneland has for years used its 5 percent commission on sales to fund purses at its spring and fall racing meets, where crowds average about 15,000 a day.
One potential economic benefit the state has chosen to surrender is sales tax revenue from most thoroughbred auction sales. The sales tax exemptions, including for purchases of horses under age 2 by out-of-staters, mean virtually none of the yearling auctions contribute to Kentucky coffers.
"There's still sales tax generated by what I sell," Long said. "And so the state revenues are increased ... but it helps the whole state. It doesn't stay in Lexington."
(Copyright 2012 The Associated Press. All rights reserved.)