F1 return: Hotels ‘delighted’, experts welcome Singapore’s ‘readiness’ to move forward post-pandemic

IMPACT FELT BEYOND TOURISM SECTOR

With the renewed contract keeping Singapore in the F1 Grand Prix calendar until 2028, the event will create “vibrancy” in a tourism sector that has been badly hit by the pandemic, said Dr Michael Chiam, tourism analyst and deputy director at Ngee Ann Polytechnic’s School of Business and Accountancy. 

While these financial benefits that will accrue to Singapore’s economy and hospitality industry will be “initially small”, the “fundamental positive impacts” will remain, added Mr Ben Cassim, manager for Temasek Polytechnic’s Diploma in Hospitality & Tourism Management. 

These benefits include an inflow of tourist receipts and demand for hotel rooms during the race period, particularly for hotels within the vicinity of the race circuit, he said. 

But the F1 Grand Prix’s ripple effects will also be felt by other sectors outside tourism.

The event will create businesses for local enterprises and jobs for locals, from project-based contracts to part-time work, Dr Chiam and Mr Cassim pointed out.

They highlighted that the F1 race will also benefit the F&B, attraction, retail and transport sectors. 

“The other potential beneficiaries include … (the) medical (sector). More significant would be the business networking opportunities that the event will provide to the various industries and sectors that operate in Singapore,” said Mr Cassim. 

On the other hand, Mr James Walton, the sports business group leader at Deloitte Southeast Asia, noted that the length of the renewed contract “throws up some interesting new partners” outside those industries that have traditionally benefited from the event.

“The seven-year duration is in part because of the desire to transform the event to be more sustainable and to be a sandbox for innovation,” he said.

“With a three- or five-year contract, companies may have been reluctant to invest to develop new technologies. But with a seven-year runway, we will see companies partnering with the organisers and the Government to come up with more efficient lighting solutions, biodegradable and recyclable options for trackside waste, and alternatives to single-use plastics.” 

Mr Walton pointed out that there is a “multiplier effect” in the local economy, as “usually 90 per cent of race organisation is sub-contracted to Singapore-based firms, and around 30,000 people get short-term employment before, during and after the event”. 

However, he said that economic impact cannot be estimated yet for 2022, until much closer to the event.

“Local attendance will also depend on the track capacity, due to safe-distancing, and the off-track entertainment options,” he said. 

“The best-case scenario for 2022 will be to break even for Singapore. But ultimately we expect to return back to more positive numbers from 2023 onwards, if the local and global approach to the COVID-19 situation continues to move forward.”

SINGAPORE “OPEN AND SAFE” AGAIN 

At the moment, it’s undeniable that the renewal of the Singapore Grand Prix contract is a “huge” statement, said Mr Walton.

It indicates Singapore’s “readiness to move forward post-pandemic and attempt to return to hosting international mass spectator events”.

“In terms of what it could do to boost the tourism and F&B sectors in the coming months, but also in terms of cementing our place as one of only two Asian F1 Grand Prixes for the coming year and perhaps longer as the calendar fills up,” he added.

The flagship event is also an “affirmation” of the event industry’s importance to Singapore’s economic growth, especially in light of COVID-19’s disastrous impact on the industry, added Mr Cassim.  

“Given the extended seven-year renewal agreement, this does bring a measure of hope to people living in Singapore in these times of uncertainty. Hope is one of the primary motivators that keep societies moving forward, so the impact here is not to be discounted.”

But there are still many things up in the air, said Mr Walton.

“What will the concerts and off-track events look like in a safe-distancing future? By the same token, how to handle safe-distancing in seating areas like the pit lane? What course will the track take given the new NS Square construction? How many tourists can we expect to bring in and what will the vaccinated travel regime look like? How many spectators can realistically attend for the next one to two years, given all of the above?”

Despite the many factors that need to be worked through over the next eight months, Mr Walton said the renewed contract was a “very positive step” and provided a platform to work from. 

Ultimately, we need flagship events to encourage people to travel, he added. 

“Sports fans have been chomping at the bit for live events in Asia, having seen the return to stadiums and tracks in the US and Europe in recent months.

“But besides those F1 ‘petrolheads’, (the F1 race) can also serve as a callout to tourists around the world – that Singapore is open and safe – as the world opens up again.”