Business side of hosting a GP

The vision of His Highness the Crown Prince Shaikh Salman bin Hamad bin Isa Al Khalifa to use the Bahrain Grand Prix and the business focus that it generates as a catalyst to generate trade, tourism and awareness has already borne fruit.

An independent survey measuring the success of the 2005 quantifies the impact of Formula One’s presence at the Bahrain International Circuit at over one hundred million dollars - with still more to come in 2006.

In terms of the Bahrain Grand Prix itself, the Kingdom of Bahrain plays host to one of the biggest travelling circuses in world sport, that will become the focal point of the sporting calendar when the 2006 FIA Formula One World Championship gets underway on March 10-12.

The visiting teams, organisers, VIPs, media and travelling fans must be housed, fed and watered - meaning that in 2005 the gross direct economic impact from expenditure on accommodation alone was measured at $30.9m, with international visitors staying on average 5.9 days within Bahrain. Their travel arrangements, mostly by air, brought Bahrain a further $16.7m income.

The competing teams in the Grand Prix and support races alone spent approximately $6.5m during their time in Bahrain, with the Formula One teams alone taking over 2,000 flights and 1,000 hotel rooms.

Aside from their time at the Bahrain International Circuit, the influx of thousands of guests brought a huge demand for the rest of Bahrain’s traders. Restaurants recorded expenditure of $13.1m on food and drink attributable to the Grand Prix, retailers saw expenditure of $22.7m while local entertainment generated a further $5.9m through the course of the 2005 Grand Prix events.

Clearly this workload needs to be catered for. At Bahrain International Circuit the workforce measures approximately 2,500 for the Bahrain Grand Prix, including catering staff, BIC employees and staff and contactors. In 2005 the Grand Prix brought local suppliers a total of $11.9m in contracts relating to the successful delivery of the event, and in 2006 the Formula One winter test and month-long Yalla Bahrain! programme of cultural and community events is set to increase this figure by 10-15%.

Yet the benefits to Bahrain of being one of the elite group of 15 nations to host a round of the 2006 FIA Formula One World Championship are longer-term and further-reaching than the period immediately surrounding the race. According to the world Travel & Tourism Council (WTTC), travel and tourism generates an economic impact for Bahrain $2 billion - equivalent to 20.4% of GDP and in 2015 it will be $3.8 billion - equivalent to 21.4% of GDP, growth of 5.2%.

The Bahrain Grand Prix is doing much to meet these long-term aims. At last year’s event a survey of the 75,000-strong crowd attending over the three days showed a total of 54.5% were Bahraini residents, with a further 20.3% from other GCC countries and 25.2% being international visitors.

The non-Bahraini respondents showed just how clearly the Grand Prix is affecting the country’s tourism prospects for the better. Of those visitors from GCC nations a total of 39.3% stated that they would consider returning for a vacation in Bahrain. Still more encouraging was that among the greater number of international visitors who had travelled from further a field, an enormously positive 46.1% of respondents would consider Bahrain an attractive vacation destination.

This clearly shows Bahrain open for business as never before. As well as highlighting Bahrain to the tourist industry, Formula One brings with it commercial sponsors who invest an estimated $2.5bn annually in the sport, mostly blue-chip brands, all of whom are keen to increase trading opportunities in the Middle East region. Indeed, the survey itself concluded that both the Bahrain International Circuit and, as its flagship event, the Bahrain Grand Prix had delivered a ‘major positive impact on the Kingdom of Bahrain.