Formula 1 or F1, is an international motorsport race that showcases the perfect mixture of engineering and driving prowess, in an adrenaline-fueled event. Hundreds of millions of fans and enthusiasts visit or watch the event from all over the world, with millions of dollars poured into it – from the logistics to the organising of the event itself.
Similar to other large international sporting events such as the Olympics (and its offshoots such as Youth Olympics and Winter Olympics), the F1 has become a huge marketing and business opportunity for the country/city hosting it. In 2008, Singapore took that chance and hosted the world’s first F1 night race
F1 in Singapore Started In 2008
The opportunity to host the F1 started in 2006 when then F1 chief Bernie Ecclestone invited Singapore to host an F1 event in 2008. Having previous aspirations to host the event in Singapore, the owner of Singapore GP Pte Ltd, Mr Ong Beng Seng, and the Singapore government inked a deal for Singapore to host the F1 event for five years.
On the 26th of September 2008, the world’s first F1 night race was hosted in Singapore on a 5.063km track consisting of 24 turns under the Singapore tropical night sky.
The initial contract to host the F1 lasted from 2008 to 2013. Singapore GP Pte Ltd and The Singapore Tourism Board went to sign another 4-year extension from 2018 to 2022. Unfortunately, in 2019, the coronavirus pandemic took place and major events like the F1 were cancelled, until now.
On the 24th of March 2022, Prime Minister Lee Hsien Loong announced COVID-19 relaxation measures for Singapore, just in time for the upcoming 2022 Singapore F1 Grand Prix from the 30th of September to the 2nd of October.
The Government Spent About $90 million A Year On Average To Host The Event
The average cost to host the F1 event a year is an estimated $150 million, with the Singapore government co-funding 60% of the total cost and the other 40% being carried by private entities, such as hoteliers, Singapore Airlines and others.
This helps keep the total cost outlay of the event lower for the taxpayers, while still allowing the private entities who directly benefit from the event (e.g., hoteliers, F&B operators) to earn from the event.
According to Statista, F1 viewership in 2008 was 600 million and there was a significant drop to 352.3 million in 2016. Countries like Malaysia and Australia even reported making losses, with Malaysia eventually pulling out of hosting the F1 in 2017. However, viewership has increased since 2016 to 445 million in 2021. The 2019 Singapore Grand Prix reached a viewership of 86 million television viewers globally, which was one of the highest global viewership of any international sporting event.
As Singapore inks a new deal to host the event for the next 7 years, the cost is estimated to be between $135 million to $140 million. While hefty, this amount is likely to be outweighed by what Singapore may reap from hosting the races.
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Singapore’s Tourism Has Directly Benefited From The F1
Since its launch, the Singapore F1 event has brought in increased profits for businesses in Singapore and attracted more than 550,000 international visitors so far. According to MTI, the Singapore Grand Prix generated around $130 million in annual incremental spending from tourists attending the race since 2008.
Hoteliers, Food & Beverage companies and other tourism-related industries have also reported an uptick in transactions from previous F1 events and will likely continue to do so in the 2022 F1 Singapore Grand Prix.
There Are Also Indirect Benefits In Hosting The F1
Aside from the direct increase in tourism receipts, there are other indirect benefits of hosting the F1. The festivities that come with the event such as live performances by famous artists inject energy and vibrancy into our arts and nightlife scene. This year’s event boasts big names like Westlife, Marshmallow and Green Day to wow the crowd with their performances.
According to MTI’s parliamentary reply on F1, hosting the F1 event has other benefits for Singapore’s economy and its citizens. 90% of the race organisation is subcontracted to Singaporean companies, not only showcasing the efficiency of our local businesses but also directly profiting these businesses. The race also brought in more than 30 Meetings, Incentives, Conferences and Exhibitions (MICE) events each year.
The F1 event also brought in $70 to $75 million in media value in 2019, with around 86 million viewers worldwide. This has brought in great media representation for Singapore and showcased the beauty, splendour, safety and opportunities to do business in Singapore.
Extending the F1 Singapore Grand Prix Till 2028
Given the overall beneficial nature of hosting the F1, Singapore has signed a fourth contract renewal to host the Formula 1 Grand Prix for another 7 years. This is the longest extension for the race and will mean that Singaporeans will be able to enjoy the annual F1 race on the streets of Marina Bay until 2028.
As the pandemic has caused much disruption to trade, commerce, and tourism, the resumption of international events is especially important to the Singapore economy. By leveraging on the F1 event, Singapore can establish itself as a frontrunner in business continuity during the pandemic and help local businesses to be able to establish their presence during an international event.
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