Formula One: A direct injection to the economy

As the countdown to the 2007 event on April 13-14-15 reaches fever pitch for fans, so too does it mean one of the most exciting times of the year for Bahraini traders.

Independent assessment of last year's event reveals that in total travel and tourism accounted for 8.3% of Bahrain's Gross Domestic Product in 2006. The Gulf Air Bahrain Grand Prix alone accounted for more than a third of that figure by generating a total gross income of $394 million for the Kingdom's businesses and traders, becoming the single biggest source of income to travel and tourism sector, which employs 38,000 people.

As a source of employment in itself, the Gulf Air Bahrain Grand Prix has an enormous impact on a population of 670,000. The number of temporary staff recruited to fill temporary jobs at the Bahrain International Circuit to cover the Grand Prix period is 505. A further 2,000 outside contractors are employed to ensure that the Grand Prix, Ithmaar Group Yalla Bahrain! programme, roadshows and all other supporting public and media events run smoothly and are well promoted.

'The Gulf Air Bahrain Grand Prix's reputation is established around the world as one of the best organised and entertaining events in the FIA Formula One World Championship calendar,' said Shaikh Salman bin Isa Al Khalifa, Director of PR and Governmental Affairs at the BIC. 'It is also our role to ensure that it delivers tangible benefits to the Kingdom of Bahrain in return for its wholehearted support for the event and the BIC. We commissioned detailed studies of the impact that the 2006 Grand Prix had on Bahrain's economy and we are satisfied that our contribution to the Kingdom is of very real benefit.'

The headline figure of US$394 million comprises many different streams of revenue. Among these figures are those of the 2000 travelling staff and drivers from the Formula One teams, support race teams and organisers who spent a total of US$3.9 million on such essentials as accommodation, subsistence, logistics and transport. For example, expenditure by overseas visitors to Bahrain totalled US$284 million outside the circuit, which can be broken down as follows:

US$81,000,000 in accommodation and subsistence
US$21,000,000 in travel
US$109,000,000 in retail outlets
US$73,000,000 on entertainment

'What this shows is that hosting a Formula One event is by far the most cost-effective means of reaching the pinnacle of international sport,' Shaikh Salman said. 'Only two other events compare with Formula One on the global stage: the FIFA World Cup and the Olympic Games -and for host nations they must be considered a one-off event.

'Germany, for instance, spent US1.9 billion on refurbishing the 2006 World Cup venues alone, before the additional costs such as security, promotion and even bidding for the event are taken into consideration. London is spending almost US20 billion in preparation for the 2012 Olympic Games - as opposed to the original US$5 billion budget - against a predicted return of US$4 billion in direct revenue,' Shaikh Salman added.

The Bahrain International Circuit was built in 16 months at a cost of US$150 million. The direct benefit to the national economy to date from the Gulf Air Bahrain Grand Prix stands at over four times that cost, with predictions that 2007 will take that total to over US$1 billion. The growth of the Gulf Air Bahrain Grand Prix continues on an upward slope on a par with the following for Formula One in the Middle East. Formula One - and indeed circuit racing as a whole - has only had a presence in the region since 2004.

Public awareness is dramatically on the rise for motor sport, with media coverage for all events at the BIC up over 1000% through 2006 and such additional benefits as Al Jazeera Sports carrying free-to-view Arabic coverage of the entire FIA Formula One World Championship. These factors have contributed significantly to the accessibility of the sport, with the BIC's inaugural Desert 400 event for the V8 Supercars Series Australia drawing more media coverage than the first Gulf Air Bahrain Grand Prix in 2004.

In 2006 a total of 77,000 people came to the Gulf Air Bahrain Grand Prix, and polls record that 83% of Bahrain residents attending the 2006 Grand Prix would return in 2007, 56% of overseas visitors attending the 2006 Grand Prix would return in 2007 and that 72% of overseas visitors would return to Bahrain as a tourism destination. As an investment, therefore, the Gulf Air Bahrain Grand Prix is set to deliver ongoing benefits to the Kingdom for a long time to come.