Formula 1 Brings 20 Million Dollars Annually to The Tourism and Hospitality Sectors
Direct and indirect income of Azerbaijan from hosting the Formula 1 Azerbaijan Grand Prix amounts to more than $100 million per year – said Samir Dubendi, Founder of DAIR Hotels and Restaurants Association and Chairman of The Executive Board of Azerbaijan Ecotourism Association.
For the first time in Baku, Formula 1 races was held in 2016 under the name of European Grand Prix, and the following year, in 2017, was held Azerbaijan Grand Prix races, which have traditionally been held on the capital’s track for the eighth years.
From my point of view, countries can accomplish multiple objectives by hosting large-scale events, including sports events such as Formula 1. The international prestige and relatively wide audience of motorsports allow for the promotion of the destination. Azerbaijan is the sole country in the region that hosts “royal races” and has the fastest city track.
There are 24 races taking place this year, and Baku is the 17th in this list. According to various rating agencies, the audience from the TV broadcast of the races alone covers about 600 million viewers, and the total global audience exceeds 1.5 billion people. According to the latest statistics, the number of spectators at the Azerbaijan Grand Prix is also growing – last year their number was 90 million against 59 million the year before. This year, the number of accredited media has also grown significantly to 300, of which 200 are only foreign representatives.
On the other hand, Formula 1 is also “money generator”. The economic benefits from its conduct are estimated at hundreds of millions. Annual turnover of fee payments is more than $900 million. According to the previous estimates of PwC, direct and indirect revenues from the race are more than $100 million per year. The tourism and hotel sector plays a special role in generating profits. The estimated amount of these revenues is slightly more than $ 20 million, noted Dubendi.
Speaking of the Formula 1 races, I cannot miss to mention the topical issue related to inconvenience for the residents of the capital from the turbulence that reigns these days in the city’s central streets. The negative impacts of major events, over tourism are a scourge of developing megacities and major tourist destinations around the world.
“It is impossible to follow the principles of sustainability in the development of tourism and entertainment infrastructure, forgetting about the interests of local residents. The main thing is to be able to find that golden mean, when the information and economic benefits from such events will correspond not only to the interests of business, but also to all residents, as well as guests of the destination”, expert concluded.
