Bahrain Grand Prix has the Formula for Success
A profitable race and a boon to the GCC economy through Formula One
The importance of the Gulf Air Bahrain Grand Prix, and of the Middle
East region's growing passion for motor sport as a whole, has been reflected in a significant jump
in the wider economic impact of the region's flagship event. Since 2004 the Bahrain Grand Prix has
been the biggest sporting and social occasion in the Gulf, having brought the world's biggest
annual sporting series to the Middle East, and with it has come a growing tide of revenues to the
Kingdom of Bahrain and the wider Gulf nations.
In 2007 the Gulf Air Bahrain Grand Prix was a sell-out for the first time in the event's history,
drawing a total of 90,000 people over the three days and joined only two other Grands Prix -
Britain and Spain - in reaching its full capacity in 2007. While ticket sales in Britain and Spain were
driven by the success of their home drivers - rookie sensation Lewis Hamilton and reigning
champion Fernando Alonso respectively - the success of the Bahrain Grand Prix is one of passion
for the sport and the quality of the overall event as family entertainment.
Martin Whitaker, CEO of the Bahrain International Circuit, said: "The full economic impact of our
race has been independently and exhaustively assessed by the Mumtalakat, the main investment
arm of the government of Bahrain, as we approach the fifth Gulf Air Bahrain Grand Prix on April 4-
5-6 2008. The results show an event that is growing increasingly popular every year with a hugely
positive effect on the economy here in Bahrain, with a halo effect across the entire Gulf that is very
heartening to see."
The results compiled and analysed by the Godo Research & Marketing Consultancy in Dubai place
the gross economic impact of the 2007 Gulf Air Bahrain Grand Prix at US$548 million. This marks a
leap of 40% from the previous year, taking the total cumulative impact of the first four Grands Prix
in Bahrain to more than US$1.2 billion.
By hiring local and regional services and suppliers, the Bahrain International Circuit itself
contributed almost US$22.9 million to the total figure. Marketing the Grand Prix across the Gulf
and international markets cost the BIC US$5.1 million, with the additional infrastructure,
accommodation, operating and other costs adding the balance of the funding.
These costs are however set against the income from the event, specifically US$10.8 million in
ticket sales and a further US$33.5 million expenditure by race-goers on merchandise, food, drink
and other items. In addition the event brought in a projected US$7.9 million through TV rights,
commissions, facility rentals, sponsorship referrals and catering commissions.
"From the perspective of many other events - be they in terms of Formula One or for instance the
Olympic Games - the cost-effectiveness of the Bahrain Grand Prix is a significant achievement,"
Martin Whitaker said. "The entire BIC and its year-round activities, led by the Grand Prix, are
dedicated towards fulfilling the vision of His Highness the Crown Prince, Shaikh Salman bin Hamad
Al Khalifa. The BIC was built to create a showcase for the region, attract investment and business
opportunities, create employment and contribute to the regeneration of the Kingdom and the facts
illustrate that those objectives are being met."
The vast majority of the Grand Prix income is ascribed to the travelling fans, with 22,500 overseas
visitors travelling mainly from within the Middle East - but with significant numbers travelling from
the UK - to watch the race in 2007. According to the World Travel & Tourism Council, Bahrain was
expected to reach an income of US$4.5 billion from international tourism in 2007, representing
7.6% of Bahrain's GDP and 10% of the Kingdom's employment. The Bahrain Grand Prix contributed
not only the figure of US$548 million but also 402 employment opportunities directly, indirectly and
induced by the event - an increase of 34% from 2006.
More than 18,000 of the international visitors to the 2007 Gulf Air Bahrain Grand Prix travelled by
air, bringing a boost to all the major carriers and many of the airports in the region. A survey of
visiting race fans from overseas predictably saw 47% flying Gulf Air, with a further 14% travelling
on British Airways but with every carrier operating flights within the region drawing 600-2000
bookings from fans travelling to the Grand Prix.
On average each international visitor to the Bahrain Grand Prix spent US$1,356 per day outside the
Bahrain International Circuit on retail shopping, entertainment, refreshments and transportation -
although the biggest spenders by far were the travelling British fans, who notched up an average
US$1,723 per day. By far the largest proportion of expenditure among all international visitors was
on accommodation, accounting for 52% of all personal expenditure while in the Kingdom and
remains a contentious issue among visiting teams, media and VIPs.
A survey of 66 hotels and resorts showed occupancy over the Grand Prix period at 75-100%, with
5-star hotels at capacity and a dramatic 30% increase in trade for three-star hotels and resort
accommodation when compared to the rest of the year. Premium prices are demanded across the
board by hotel owners during the Grand Prix period, on average 15% more than equivalent stays in
the Kingdom throughout the rest of the year. In the four-star hotels, however, price hike was a
significant 30% and a subsequent drop in occupancy was clear to see.
"It's abundantly clear from the figures that one group in particular is missing the boat when it
comes to the Grand Prix success story, and that is the mainstream hotels," Martin Whitaker said.
"By raising their prices so dramatically, the four-star hotels in particular are clearly losing
customers, either to five-star hotels that can better justify the expense, or to more basic but cost-
effective accommodation."
Nevertheless the importance of the Grand Prix to Bahrain as a year-round tourist destination is also
evident in the report. The poll of international visitors registered that 81% would return to Bahrain,
of whom 52% would be returning within 12 months of last year's Grand Prix and a further 48%
would return within two years.
"With new leisure and business developments being completed across the Kingdom each year, the
Grand Prix is an unbeatable opportunity for business and leisure tourists to experience Bahrain,"
Martin Whitaker added. "Our success is intended to be a catalyst for the success of Bahrain and the
wider GCC community, which we are working flat-out to ensure continues on an upward path at the
2008 Gulf Air Bahrain Grand Prix."
