By Pete Williams
One of the more puzzling, and at times frustrating, aspects of obstacle racing is figuring out the actual price to do a race.
There’s the race entry fee, which can vary by 50 percent depending on when you sign up. This isn’t much different than triathlon or road racing, however.
But then there are assorted other add-on fees unique to obstacle racing that at times leave athletes feeling like they’re buying a car – or at least a plane ticket. There’s parking, which almost always is $10 per vehicle. There’s the insurance fee ($10 to $14), which increasingly is broken out as a separate charge. And then there are Groupon and Living Social deals, sometimes last minute, that annoy those who signed up earlier for a larger fee.
One frustrated athlete posted the following on our EnduranceSportsFlorida website in response to a comment by Sam Abbitt, race director for the Savage Race.
Here’s Abbitt’s original comment:
“I do agree that the daily deals like Living Social and Groupon are TERRIBLE for the sport. They are bad for organizers, bad for participants, and generally make for an extremely watered-down event where the only people making any money are the daily deal providers. Participants should remember that they are going to get what they pay for. If you want a great race for the money, come try Savage Race. Yes it costs more than some other events, but we make it worth it. We focus on producing the best event experience possible for our participants – not on the lowest possible price.”
Here’s the reader’s response:
“Funny, I just signed up for a Savage Race and I got a different perspective. In the future I may only do it again if I get a Groupon or LivingSocial discount. (I just search the Internet and found Savage Race is offering a LivingSocial deal for one of their races). Their regular $79 or higher entry fee quickly increases with additional mandatory fees: $12 for insurance, $7 or $8 processing fee, $10 for parking out in the country. Funny how they feel it is appropriate to basically (add) on their cost of doing business as additional fees to their prices. How would you like it if when you checked out at Wal-mart they added a parking fee, an insurance fee, a credit card fee, and a cost of having a building fee? They have those costs, but they are factored into their prices. They like to treat their customers with respect instead of trying to game them into paying more. Why not just make the price the total price, so you don’t leave your customers feeling tricked or taken advantage of with all the “additional fees?” And you wonder why people go for Groupons? Because if you don’t you feel like an even bigger sucker after you see them offered and you already paid full price plus all the fees. Just my two cents…”
“Thanks for the message. Below is my response to your points.
1. Parking fees, insurance fees, processing, etc: Yes we charge for this stuff. We have to. These a-la-carte fees are legitimate costs that we have to pass on to the participant. If you want the kind of obstacles that we shell out the big bucks to build, that money has to come from somewhere. Our courses cost hundreds of thousands, our insurance is expensive, and we pay a big premium to get the best venues too. There are certainly less expensive events out there. We don’t pretend to be the cheapest. You compare us to Wal-Mart in your comment. We’re not the Wal-Mart of obstacle races.
2. We don’t “game” people into paying more. In fact, we are very forthcoming about the cost of our events on our website. Look on our event page. It’s all there. Not to mention that the fees we charge are all pretty much industry standard stuff when you compare us to other events in our class.
3. We recently ran a Living Social offer in a new market. Living Social has changed their marketing format since I made my original post. They are now more willing to work with vendors and will negotiate deals that do not require race producers to LOSE money on sales. I did say that I would never use them before, but they’ve changed the way they do business so that it makes sense for us. Things change. The important thing is that we are able to manage it without ruining the integrity of our events because we don’t have the funds to finance a decent race.
Your analysis is unfair.
I think that this only fair comparison for our business is the event industry, not retail, where margins are often 100% or greater. More specifically, take a look at the obstacle racing industry.
Event Industry Overview
1) Almost all major events sold via online platforms with credit cards have to charge a processing fee. Look at sporting events, concerts, marathons, triathlons, and other major obstacle races. In this space, it’s an expectation of the customer to pay a fee like this. We are not dishonest about it. It’s plainly listed on our website and the fees are presented prior to purchase.
2) Most events have to charge for parking too. Look to major players in the categories I listed above and see what they are charging.
3) Insurance fees are unique to our industry. The major players in obstacle racing all charge for this, with the exception of Warrior Dash. Warrior Dash has smaller obstacles and presumably do not have to deal with the same insurance rates we have to pay. They do, however charge $20 for parking last I check. (Editor’s Note: Warrior Dash did advertise a $20 parking fee prior to its Florida event last month, but charged $10.) I’m guessing they do this to offset insurance cost. Again, the insurance fee is plainly listed just below our pricing schedule so that the customer may consider that when making the purchase.
4) Living Social deals are kind of a scary thing for promoters. Usually they are loss leaders, and the hope is that they will encourage their friends to come later. I’m opposed to using them in general, but sometimes it is necessary to kick off a buzz in a new market. The fair thing to do with a Living Social deal is to offer it EARLY so that people don’t feel like they are getting swindled later as you describe. We have only tried Living Social ONE TIME as a test, and we did not wait until the 11th hour to send it. Were you personally affected by our Living Social deal?
I think your characterization of our company is unfair. We are extremely customer oriented, and I take great pride in being an honest person and in creating a product that provides tremendous value to our customers. We do things like send out random thank you gifts to our loyal customers ALL THE TIME.
I’m sorry if you dislike our pricing structure, and we don’t really have the influence to rewrite those rules.
Just as an FYI, here’s a breakdown of some of the major obstacle race players pricing schedule as of this month:
Parking $10 to $20 depending on venue
Parking – $10
Insurance – $14
Processing – 9.5%
Entry $79-109 (Florida)
Parking – $10 disclosed on site
Insurance – $12 disclosed on site
Fee – 5%+3 visible at checkout”
(End of Abbitt’s response)
For many athletes, it’s not the cost of an obstacle race entry fee (which is significant), but all of the add-on costs as outlined above. The one many take issue with is parking. Would you be surprised to learn that obstacle races pay, at most, $30,000 to rent property for a weekend event that could gross in excess of $1 million? (In the case of Tough Mudder; most events gross far less.) In effect, they’re more than covering their rent money with parking.
I’ve never been to a triathlon that charged for parking, though a lot of triathlons have five-figure costs associated with shutting down roads. Triathlons take care of insurance costs by paying a nominal fee to USA Triathlon, which in turn requires all participating athletes to be USAT members. Obstacle racing does not have a governing body to provide similar insurance. We can see a day when there might be such an organization, but it’s hard to imagine an insurance provider offering coverage across the board the way USA Triathlon does for tris or USA Track and Field does for road racing. (The USATF insurance coverage specifically forbids obstacles in any USATF-sanctioned race.)
Hey, more power to obstacle races for, in effect, boosting income by breaking out the charges. It’s what the market will bear. We’re certainly not picking on Savage Race; they don’t do anything differently from Tough Mudder, Spartan Race, Warrior Dash, and everyone else.
Still, we’re betting that obstacle racing is soon going to become a buyer’s market, at least judging by the increasing number of Living Social deals we’re seeing, even from the likes of established tours such as Spartan Race and Rugged Maniac. A cottage industry has sprung up with obstacle-related websites partnering with races to offer coupon codes. The races kick back money to the sites each time the code is used.
With so many discount codes floating around, nobody ever expects to pay full price for an obstacle race no matter how early they register. As a result, the race directors break out more and more of the costs to make the base price look lower. It’s an endless cycle, one that gets more confusing all the time.
At the very least, this will be good for the customer. With no end to the number of events, nobody can sustain attendance and that will mean more competition for athletes. Perhaps they might even start providing free post-race refreshments like triathlons and road races.
Warrior Dash drew 9,000 to Lake Wales, Fla., last month, which was about the same as last year. But Warrior offered deep discounts early and presumably made less money. Dirty Girl drew a modest 2,000 or so to Dade City last weekend for its Florida debut. We’re wondering how Tough Mudder will do with three Florida events in 2013 when it had just one Florida event in 2012 – and that was just in December.
We’re bullish on obstacle racing, of course. But we’re also guessing the winners in this ever-competitive field will be the ones who provide the best value. And that likely will include slashing some of the add-on charges, including them in one lower base rate.