Wednesday, 16 September 2009

Will F1 Boost Abu Dhabi? Its a Racing Certainty

In autumn Abu Dhabi will make the UAE proud by hosting the Formula One (F1) race in the new, purpose-build Yas Circuit. Not only is Abu Dhabi’s circuit the most advanced in terms of planning but it is also taking place at the decisive final leg of the racing season. This means big money as well as great exposure for Abu Dhabi and the UAE with regards to tourism, infrastructure development and general business attraction to the capital.

Other recent host nations to the prestigious event include Singapore, Istanbul and Bahrain and both have exhibited a substantial increase in the number of tourists arriving specifically for the event as well as a direct result of the positive exposure that the event generated for their countries. In Bahrain for example the Mumtalakat Holding company that owns and operates the F1 Championships in Sakhr reported that the annual income generated for the island by the event totaled nearly $2 billion from five years of Formula 1, with $600 million entering the economy during 2008’s edition alone. This reflects the fact that hosting such an event will have incremental value as time passes. Clearly, motor sports are very popular in the Middle East, as a CNN report found that an estimated $11.3 billion has been spent on motor sports in the region between 2003 and 2007.

In terms of advertising revenues, F1 attracts a larger audience than any other sport save the football World Cup and the Olympics, both of which take place only every four years.

Malaysia’s Sepang circuit built in 1999 attracts about 35,000 spectators a year who stay an average of 5.4 nights. Abu Dhabi’s hotels can look forward to a packed week in early November but also with the coming attractions of the Saadiyat Island museums, the grand prix in the next few years will see an increase in the number of hotel nights tourists choose to stay in the city. Abu Dhabi’s edge over other cities is boosted by the fact that it owns five percent of the Ferrari team and car-manufacturing firm based in Maranello, Italy.

No other host city of the Formula One Grand Prix promises to constantly upgrade the attractions available to visitors as Abu Dhabi has. In 2010 Ferrari World the world’s largest indoor theme park with over 20 rides and attractions, including the world’s fastest rollercoaster, will be unveiled in time for the second edition of the race and the subsequent years promise to have a major museum opening almost annually including the Louvre Abu Dhabi and the Guggenheim on Saadiyat.

This all translates into significant tourist dollars since F1 fans spend on average twice as much as regular tourists spends on shopping and three times as much on food and beverages. In addition, they stay two to three nights longer on average than general tourists, according to a study by the Singapore Tourism Board.

There is also the real estate value behind hosting the F1 Grand Prix. The superb infrastructure development has allowed Abu Dhabi to buck the trend of other emerging economies who have witnessed business closing down whereas Abu Dhabi attracted a considerable number of new businesses that exceeded 6,600 in the first half of 2009 according to Abu Dhabi Department of Economic Development.

Abu Dhabi has worked extensively on a PR campaign to put the emirate on the international tourist map with great success (for example, by launching Etihad airways), and now the fact that 600 million viewers per race world wide tune into the F1 races means that the city will be able to reach a significant portion of the global TV audience.

There is no doubt that 2009 will be a big year for Abu Dhabi. After winning the vote to host the International Renewable Energy Agency in Masdar City in June 2009 it will now host its first Grand Prix. The superb branding exercise that Abu Dhabi launched via its sponsorship, displayed prominently on the Ferrari team cars and drivers’ uniforms, allowed F1 fans to have an initial glimpse of what Abu Dhabi has to offer. Now by attending the most important race of the season they will finally be able to experience this city firsthand.

*This article first appeared in Gulf Business in the September 2009 issue.

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