Dropping Singapore F1 race may not have significant impact on tourism: Experts

Dropping Singapore F1 race may not have significant impact on tourism: Experts

While negotiations are still ongoing, dropping the F1 Singapore Grand Prix may not have a significant impact on the tourism sector, said industry experts. But they also pointed out the intangible benefits of hosting such an event.

SINGAPORE: While negotiations are still ongoing about the post-2017 fate of the Formula One Singapore Grand Prix, if the race no longer continues the impact on the tourism industry is unlikely to be significant, according to industry experts Channel NewsAsia spoke to.

Last weekend, F1 chief Bernie Ecclestone claimed that Singapore does not want to host the race any longer. In an interview with German magazine Auto Motor Und Sport published on Sunday (Nov 20), he said Singapore may not extend the deal as it had achieved what it wanted with the Grand Prix. Although he was subsequently quoted as saying that the race would "hopefully continue", his initial comments have sparked questions about the value of hosting the event.

WANING POPULARITY

While tourism receipts would likely take a hit if the Singapore Grand Prix does not continue, experts Channel NewsAsia spoke to said that in terms of measurables, the impact on the tourism industry is unlikely to be significant.

One reason for this, they pointed out, is the waning popularity of the race in recent years. This year’s edition of the race saw the poorest ticket sales since it was launched in 2008. There was a 15 per cent drop in attendance, with an average of 73,000 spectators per day, and a cumulative 219,000 spectators at the Marina Bay Street Circuit over the three-day race weekend.

“If you look purely at the numbers, the return on investment is not significant,” said Ms Shirley Tee, course manager at Nanyang Polytechnic’s Diploma in Hospitality and Tourism Management, adding that Singapore likely earns the most in tourist dollars from the skyrocketing room occupancy rates over the F1 period. “But the race is just over one weekend, so if you look at it over one year, I don’t think it forms the bulk of their revenue.”

Ms Lorraine Gan, a lecturer at Singapore Polytechnic’s Diploma in Tourism and Resort Management made a similar point. “Singapore has a vibrant culture and heritage mix, and I’m sure they’ll be able to garner the interest of tourists without F1 being in the event mix,” she said.

And some positives could come out of the race being dropped, she added. “Some local businesses have been affected by the road closures for the night race, and can’t run their businesses effectively. So some of these things may be good news for them.”

INTANGIBLE VALUE

But arguably more important than the tourism dollar are the intangible benefits of the race to Singapore’s image and branding as a global city.

“The race has given Singapore a lot of visibility on a global scale,” said Managing Director of PRecious Communiciations Lars Voedisch. “If you look at the audiences that follow F1, it’s not just sports enthusiasts, but also people with higher spending power. So it has obviously made Singapore a more attractive tourist destination.”

He explained that the appeal of F1 lies in the fact that it is not only a mass spectator sport, but is also associated with the rich and famous. "That’s an interesting combination that makes it work for a lot of destinations, and also for Singapore,” he said.

“And because it’s for the rich and famous, you have your Jay Zs and your Beyonces coming… not only as performers but also as guests,” he added. “That helps to give Singapore that little bit of star appeal and sexiness to its branding.”

This is something Singapore could lose out on should it pull out of the race.

“Singapore has always wanted to attract high net-worth individuals to come here,” said NYP’s Ms Tee. “So by dropping it, you’re sending a signal to the world that this is not really the place that they would want to come to.”

CHALLENGES AHEAD

Moving forward, one challenge organisers will need to face in order to counter the declining popularity of the race is the ability to encourage visitors to return to the event.

Ms Gan noted that local interest in the race has taken a hit in recent years. “The only things that have changed over the years is the other activities that are associated with the race like the concerts,” she said. “But the tickets are not cheap, and maybe Singaporeans feel that it’s not an event they want to go for every year, but just something that they want to experience once.”

The strong Singapore dollar has also made it more expensive for tourists to fly in and enjoy the event, she added.

Nonetheless, the Singapore Tourism Board has indicated that the race has met the targets that it set out for the event. According to its statistics, the race has attracted 350,000 international visitors over the last 8 years of the race. These overseas visitors form about 40 per cent of all the spectators that come to the race, and results in about S$150 million in incremental tourism receipts per year.

“But other than the economic impact, I think the Singapore skyline being broadcast to over 640 million international viewers worldwide is a kind of exposure that we think is really valuable,” said STB’s Director of Sports Jean Ng. “That’s something that the race brings to the city.”

She explained that over the years, the STB has “consistently tried to up the game” with the race. “The promoter has injected things like concerts into the race programme, and made it really a weekend of entertainment and fun for both Singaporeans and tourists to enjoy,” she said. “On top of that, we’ve also created Grand Prix Season Singapore and brought the race action from within the circuit to out of the circuit, in order to make it a more inclusive experience for both locals and foreigners to enjoy.”

And as to whether Singapore should host large-scale sporting events like the F1, Ms Ng said STB will evaluate each proposal “on its own merits.”

“Some of the considerations include the value it brings to tourism…that would be the economic impact it brings to the city, but beyond that, we also look at how the event helps to profile Singapore as a vibrant and attractive tourism destination,” she said.

But as negotiations are still ongoing, whether Singapore will continue to host the race remains anyone’s guess.

Mr Voedisch offered one way of looking at the current situation.

“Both sides are negotiating over whether it’s worth re-signing a deal,” he explained. “So Singapore is placing their cards on the table…that they don’t really want to pay so much, the F1 is not really working so well for them. Then F1 plays the card that they don’t need Singapore to survive.”

“So they’re both just bringing their poker cards into position to play the negotiation game,” he said. “I don’t think anything has been decided yet, but both sides are just making a bit of noise, and rattling their sabres to get into a stronger negotiation position.”

Additional reporting by Nicole Tan.

For more on the costs and benefits of hosting the F1 race, tune in to Singapore Tonight on Channel NewsAsia at 10pm on Sunday, 27 Nov.

Source: CNA/lc

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