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Self-Improvement & Hobbies

F1 'to bring bigger benefits' in next lap

Greater economic spin-offs likely in next five years, says latest study.
The Straits Times - September 25, 2012
By: Terrence Voon And Yasmine Yahya
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F1 'to bring bigger benefits' in next lap The SingTel Singapore Grand Prix 2012 F1 race in session on Sunday (above), and revellers enjoying one of the concerts in the F1 line-up this year. From 2008 to last year, F1 attracted about $560 million in incremental tourism receipts, as well as a telev

AFTER a five-year learning curve, Singapore is now in pole position to reap greater benefits from Formula One.

The Republic signed a new deal to stage the night race for another five years last weekend, and according to new figures from a Boston Consulting Group (BCG) study, the next lap is likely to see increased economic spin-offs in tourism and investment.

BCG, which was engaged by the Singapore Government two years ago to analyse the cost and benefits of the F1 race, surveyed individuals in the top 20 per cent income bracket from selected markets such as China, Russia, Brazil, Britain and Spain.

They found that 30 per cent to 40 per cent of those who watched the Republic's Grand Prix had an improved perception and awareness about Singapore, compared to those who did not watch the race.

Those who watched the race were also 10 per cent more likely to travel to Singapore.

The effects have already been felt, as data compiled by Amadeus, a leading IT solutions firm in the tourism and travel industry, and market research and consulting company Forward Data SL suggests.

Their report showed that Australians continue to top the list for inbound travellers during F1 week this year. They were followed by tourists from Britain and the United States. The numbers indicate that the race has broadened Singapore's tourism appeal beyond traditional markets like Indonesia, China and India, and made inroads into Europe and Oceania, where F1 is most popular.

"The main thing is that the race has become more famous," Minister of State for Trade and Industry Teo Ser Luck told The Straits Times. "F1 has a brand equity that ranks up there with the Olympics and the World Cup. When I meet dignitaries, it comes up. When I talk to business leaders, they bring it up."

Indeed, the potential growth goes beyond tourism dollars.

A separate BCG survey said 70 per cent to 90 per cent of business owners and top management of mid-sized companies had improved perceptions of Singapore due to F1. Five per cent to 10 per cent of them are now keen to invest and do business here.

The two-prong tourism-business approach could see the Republic reap $1 billion in "net economic output" over 10 years and another $1 billion in terms of increased tourism and investment, according to BCG.

"You get greater impact if you host it for 10 years instead of just five," said BCG partner Jeffrey Chua. "Doing it for one year, like the Olympics and World Cup, doesn't really bring a lot of induced benefits.

"People forget. You get the branding effect only when you do it over and over again."

From 2008 to last year, F1 attracted about $560 million in incremental tourism receipts, as well as a television audience of around 360 million. It helped defray the estimated $150 million annual bill for organising the race.

There are other spin-offs.

Several conferences are timed to coincide around the F1 race, like the Russia Singapore Business Forum, Fix Protocol's annual Singapore conference, as well as the Singapore Global Dialogue, organised by the S. Rajaratnam School of International Studies. The inaugural Singapore Summit was also held last weekend.

The race itself is also a major opportunity for banks and other major corporations here, such as the Singapore Exchange, to entertain clients and clinch deals.

Mr Ranjit Khanna, the head of South-east Asia and global non-resident Indians at private bank Coutts, said: "F1 is always a popular fixture on the calendar, one that our clients thoroughly enjoy and always look forward to."

DBS Bank, which buys hospitality suites or walkabout tickets for its staff and clients every year, said it was "open to exploring various other associations with F1 in the years ahead".

Barclays Capital economist Leong Wai Ho said: "Having the F1 race allows someone sitting miles away to see Singapore for that two hours; this marketing is a big part of having the race.

"It is not all about how much money you can earn from the race itself."

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