Mother Nature’s Red Flag – Weather

The speed of racing makes it especially vulnerable to weather conditions. A race car is designed to capitalize on side and forward bite—connection of tires to track is essential. From drag to dirt to paved–the impact of weather is a concern to track directors and fans as well. In large associations, such as NASCAR, rain may force a winner to be declared before race completion or the race may be moved to the next day(s) when weather conditions clear. The obstacles created by adverse weather on race day are something all tracks must be aware of and plan for.

Dirt Track Racing

While treads for asphalt races are designed to be smooth—treads for dirt racing are grooved to adjust to the sometimes rough and rutted race tracks. The permeable nature of dirt tracks creates a different scenario for rainfall. Dirt tracks are sprayed with water to control the level of tackiness. Yet, a deluge of rain prior to racing can leave the track too muddy for racing without enough time to dry out prior to the race’s start and cause cancellations. Excessive rainfall during the event or heavy accumulation days up to an event can cause delays or cancellation as well.

Asphalt Racing

Rain in any amount can have disadvantageous consequences for asphalt tracks, and racing commonly comes to a halt until conditions improve. Rain prior to or during an event can cause a delay or even a cancellation. NASCAR has begun using Air Titan, 2.0 a track-drying technology, to reduce delay time after rain has stopped to quickly resume racing. Still, this technology is not sustainable in smaller markets with a cited cost of “more than $50,000 for a weekend.”[1] Track’s losses are substantial when adverse weather strikes and these cancellations become inevitable. A rain check can lessen consumer concerns—but resuming racing at a later date for booked tracks and for amateur, semi-professional, and professional drivers is a complicated affair. Sometimes consumers’ tickets can be transferred to later races—but that is not always the case and this can further create more difficulties.

Weathering It All

Race seasons run predominately from early spring through late summer—with some races extending into fall and winter. A long season exposes track owners, drivers, and fans to varying inclement weather scenarios. The unpredictable nature of weather makes determining these types of weather scenarios akin to peering into a crystal ball. Unfortunately, an indecisive decision or untimely one can further result in frustrated drivers and crews as well as incensed fans forced to deal with delays and cancellations. Declaring cancellation is not an easy call for any race director. Industry has responded to this weather problem–meteorological teams and websites wholly devoted to aiding race directors in determining the potential impact weather will have on race day are on the rise. Additionally, weather insurance products have been utilized to alleviate some of the financial impact weather can have on tracks.
Weather insurance is a highly specific and tailor-made product designed to satisfy a business’ need to mitigate against adverse weather impacts. Weather perils such as excessive rainfall, days that are too hot, days that are too cold, wind, or a combination of elements can be insured against to lessen potential risk. These products have also served as a source for marketing a track. For example, Atlanta Motor Speedway is again offering “Perfect Race Weather” for their NASCAR 2017 Folds of Honor QuickTrip 500 weekend. The “Perfect Race Weather” guarantees that if the temperatures are too cool, observed to be below 50 degrees, fans will receive a credit for future races. This alleviates many weather worries for fans who purchase tickets prior to race day and creates greater interest in a race. However, weather insurance can surpass this type of guarantee. If a policy was designed to be triggered by temperatures below 50 degrees, and temperatures are observed by the National Weather Service to be below this threshold a payout will occur. The payout can be utilized to reimburse fans or anyway the insured sees fit. With weather insurance, a track can offer refunds if cancellation occurs because of a specific measured event(s) and create highly marketable campaign with this type of guarantee.

One can be certain that perfect weather on race day will never be a certainty. Yet, the opportunity to make prepared and educated decisions on how to operate despite the weather is becoming customary to industry. Utilizing meteorological data, keeping fans aware of cancellation policies, and lessening revenue losses through weather insurance products allows tracks to get the upper-hand on adverse weather conditions.

Running Scared: Why we can no longer ignore the importance of weather preparedness

Washington Post’s weather editor, Jason Samenow wrote an opinion piece entitled, Is the Media Scaring the Public Too Much About Climate Change and Extreme Weather? Samenow cites the analysis of two U.K. scholars, Vladimar Jankovic and David Schultz. They argue that climate change is not the culprit for losses and destruction, but it is extreme weather events that wreak havoc. Further, the heavily-made correlations between climate change and weather events (without connecting all the dots) is irresponsible. Journalism’s continued emphasis on all things climate change has distracted from bigger issues, and because of this misconstrued media placement public focus may be off target.

Janovic and Shultz scholarly arguments lay the foundation for Samenow’s article, and all parties indicate that the primary focus on extreme weather as only an attribution of climate change is misguided. This centric focus on climate change takes us on a perilous course navigating discussion away from extreme weather events as a singular topic in and of itself. Further, this erroneous direction causes weather preparedness, a contender for center stage, to sit on the edges with very few in journalism ever indicating its integral importance in public understanding and planning. Weather preparedness’ absence among media noise leaves us all exposed. When extreme weather events impact and losses occur—we wonder why we weren’t better prepared? Weather preparedness simply is diminished in this discussion, and it should be intensified in dialogue concerning adverse weather and extreme weather events.

Climate change is evident and extreme weather events do act as this evidence—but extreme weather events need to be singularly looked at as well. Humans’ ability to navigate and survive on a larger portion of the globe and increased human productivity has changed how extreme weather events are observed. Humans and their assets run the risk of being in the path of destruction for extreme weather events because wherever it strikes humanity is also there. Running scared from extreme weather events is no longer an option. Instead we must lessen the impact recognizing weather carries risk and we must prepare for that risk whether that be through architectural innovations, redistribution of assets, or increasing insurance for protection. Adverse weather has always affected humanity and it likely always will—therefore, weather preparedness should be a part of the discussion.

What is Weather Risk Management and 3 Ways it Can Help Your Business

It is in the news every day—unseasonable or threatening weather events interrupt business as usual. Those managing business struggle to hold the pieces together. It’s too cool in August for ice cream sales. Rain threatens to cancel an outdoor concert. Snow piles up and the cost for removal is excessive. All of these events mean monetary consequences for those left holding the cards or in the worst cases a fiscal calamity. However, the financial sting from these costly events could have been lessened, and yet few operating these businesses are aware of the existence of tools that help mitigate the damaging effects of weather on business.

What is Weather Risk Management?

Weather risk management is the action taken to protect against possible losses from adverse weather. Whether it is rain, snow, heat, cold–too little or too much–or even if it is all of the above–they become a weather risk when they adversely affect a business’s bottom-line. By mitigating against the perils of excessive rainfall, seasonal weather (temperature highs and/or lows), wind, or lightning insurance can help stabilize income or divert weather-related losses for a business.

 

3 Ways Weather Risk Management Can Help Your Business

Insurance is available that can allow for the recovery of unexpected expenses or lost revenue associated with adverse weather events. Through specialized insurance products income stabilization is a possibility. With the fluctuation of weather throughout a season it can be difficult to determine how well a company will survive the ups and downs of Mother Nature. For an outdoor venue with an unseasonably rainy season, a long-term product can alleviate the duress felt by lower attendance rates through this season.

Many times a weather event can result in reduced revenue, increased cost, or other disruption to business—sometimes it can result in all three. The operations of a fast-food restaurant can adversely be affected by snow. A snow event or several events could potentially cause fewer customers to visit an operation reducing revenue. The snow results in heavy plowing of parking lots, which is an increased cost. A heavier snow event could even cause roadways to be impassible and create disruption to business operations. The costs associated with this are difficult to rebound from. Insurance products exist to handle all of these scenarios.

In some situations, allowing customers to know that for certain weather events a plan is in place gives a marketing advantage against competitors. With so many recent cancellations, a customer can have peace-of-mind knowing if weather interferes with their investment they will be reimbursed through a company’s business plan. Organizers of sporting events, carnivals, fairs, concerts, and weddings can provide this advantage to their customers. For example, an outdoor venue can purchase a seasonal product that offers them protection from unseasonable weather (cold and/or rain). The outdoor venue can then pass this protection onto their client by offering refunds if there is a cancellation due to poor weather conditions. Weather insurance becomes an excellent marketing tool for any business impacted by weather–setting it apart from competitors.

By putting into place a weather risk management plan, a company can help protect business from the adverse financial effects of weather, and avoid simply accepting the unbearable aspects of adverse weather.