Most people in the horse racing industry and the wider British public completely understand why the Cheltenham Festival might have to be held behind-closed-doors when it arrives in March. The global pandemic continues to rage around the world, with the government’s response having been to initiate another lockdown and stop spectators from attending sporting events, which will obvious impact the Prestbury Park meeting.
Whilst most people are understanding of the need to limit large gatherings during the current crisis, the lack of horse racing fans at Cheltenham Racecourse for its most popular event will obviously have financial implications that can’t be avoided. The complications will not just be the racecourse, either, given that the local area makes a huge amount of money from one of jump racing’s most attended meetings.
How Much It Will Cost Cheltenham Racecourse
There is a need to split possible losses up according to who it is that will suffer. Firstly let’s look at Cheltenham Racecourse and its owners, the Jockey Club. An average of 60,000 people a day would typically head to Prestbury Park to watch some of jump racing’s most loved races, with even more than that usually being in attendance for the Festival’s blue riband event, the Gold Cup.
As things currently stand, the most that Cheltenham bosses could possibly hope for would be in the region of 2,000 members a day, with even that looking extremely unlikely. As far as course bosses are concerned, a ‘best case scenario’ would see an extremely limited number of people turning up to watch the racing. The closer the Festival gets, the more any hopes of racing fans being in attendance are ‘fast disappearing’.
Speaking to the Nick Luck Daily Podcast, the boss of the racecourse, Ian Renton, admitted that they’re getting to the point of needing to accept that they’ll be lucky if just owners and trainers were allowed to attend and watch their horses take on the track. Having been ‘realistic’ about their expectations even before the latest lockdown, Cheltenham’s organisers are now accepting that even those thoughts were too optimistic.
Due to be held between the 16th and 19th of March, the Cheltenham Festival is one of the Jockey Club’s prized assets. With the Coronavirus estimated to have cost the organisation about £100 million already, losing crowds at Prestbury Park will be a further hit. The meeting would normally bring in more than £20 million in ticket sales, which is obviously a number that they won’t be event close to regardless of what happens.
On top of that, of course, is the amount of money made from the sale of food and drink during Festival week. With the likes of 45,000 afternoon teas usually sold and more than 8,000 gallons of tea and coffee served, it goes without saying that there’s a huge amount of money spent at the bars, restaurants and stalls around Prestbury Park during the meeting. All of that will go unsold this year and no profit will be made accordingly.
During the 2016 Cheltenham Festival, around £2.3 million was taken out of the on-course cash machines. Whilst plenty of that will have been spent on placing bets, a good amount of it will also have been spent on food, drinks and even souvenirs. Around 6,000 members of staff are normally employed, but that won’t be the case this year either and the racecourse will suffer an economic hit accordingly.
The period up to the end of March 2021 includes 13 of the course’s annual race days, with just three coming outside of this period. All of the major fixtures at Cheltenham Racecourse come during the winter jump season, with about 430,000 people attending the various fixtures during this time. With an average ticket price of £50, that means about £15 million will be lost on ticket sales alone before other revenues are taken into account.
For smaller courses, the majority of revenue is made up of media rights. For larger course like Cheltenham, however, that money comes from ticket sales and hospitality. It’s why Ian Renton declared the exact amount that the course will lose during the Festival was impossible to put a figure on. The only thing that the course can do in mitigation is to minimise its costs during this period.
What About The Local Economy?
The news isn’t good for the local economy, either. The Cheltenham Festival is usually worth in excess of £100 million to Cheltenham, Gloucester and the surrounding towns and villages. The on-site car parks welcome more than 10,000 cars each day of a typical Festival, whilst the local train station sees over 100,000 people using its services. The buses that ferry people back and forth from the town centre offers 80,000 trips.
From cafes and restaurants that won’t have any customers through their doors to hotels and guests houses that will stand empty, there will barely be a business that is unaffected by the idea of the Cheltenham Festival being held behind closed doors. It’s not even as if it’s just the horse racing festival that will be affected either. All of Cheltenham’s various events lead to the economy earning around £160 million during the year.
The majority of that, of course, comes courtesy of the horse racing and it’s difficult to see how the local economy will cope with such a huge loss of income. Local shops will suffer as much as the hotels, pubs and restaurants, with most of them beginning their preparation for Festival time in the autumn of normal years. That this year is anything but normal will hurt them immensely.
Whilst there were hopes of crowds being back when the Covid-19 vaccine was first announced, the fact that it’s been so slow in being rolled out have put paid to that. As a result, there will be millions lost by local businesses who will be without Cheltenham’s usual Festival crowds paying for their services in March. From taxi drivers to sandwich makers, virtually everyone will be affected in some way.
What About The Bookies?
Local on course bookmakers naturally struggle in comparison to the big global betting giants and one of the only chances to get a slice of the pie is during big race meetings like the Festival. An independent on course bookie could make up to a quarter of their annual revenue over the course of the four day festival.
With spectators looking unlikely it seems the on course bookmakers will lose out again, having gone through nearly a year already of not being able to take bets at courses.
The big gains will, however, be made by those with the biggest online presence. Jump racing at Cheltenham has already seen record viewing figures this year and online betting has increased as a result of that. It is expected that the 2021 Cheltenham Festival will see more online betting than usual too, not just because people cannot attend, but also because people have a lot more free time at the moment to watch and bet on racing.
A proportion of the money bet will go back into horse racing in the form of the betting levy and this may be welcome news for horse racing as a whole but it will be little consolation for Cheltenham, especially local businesses and on-track bookies that rely on people attending.