Formula One: Awash With Cash

If there is one thing with which Formula One racing is synonymous, it is money. The sport is awash with cash. Each team spends tens of millions every season to keep its cars on the circuit and the drivers, who are sporting superstars, are paid millions to compete. There is a global television audience and therefore massive advertising revenues and sponsorship.

Add to that enomerous circus that each Grand Prix has become, with thousands of followers traveling the world to watch the races-not to mention the media hordes that attend each event-and it is easy to understand why the arrival of F1 at each host venue heralds a huge windfall to the chosen destination.

Indeed, according to Godo Research & Marketing Consultancy in Dubai, Gulf Air Bahrain Grand Prix resulted US$548 million boost to the local economy. The figure was assessed from the 22.500 foreign visitors who poured in. It has been estimated that each F1 tourist spent on average US$1300 each day they were in Bahrain. What is much harder to calculate is the potential long-term benefit to tourism as a result of the worldwide television exposure.

It is significant that many fans of Formula One are wealthy. In Bahrain, surveys assessed hotel occupancy as a whole to be at 75 percent to 100 percent during the event. However, five-stars hotels were all full. The research is also showed that ticket sales for the racing returned US$10.8 million, and that those who attebed spent more than US$33 million on merchandise, food and drink, and other sundries onthe circuit . There was a further boost of nearly US$8 million from other revenues recovered from catering comissions, television rights, rentals and so on.