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Motorsports, the speed competitions using motor vehicles, are popular events worldwide, such as Formula 1, Nascar, Moto GP, and Indycar. These competitions typically consist of multiple races held in various countries around the world, giving Motorsports a significant influence on the global economy.
The Fédération Internationale de l’Automobile (FIA) estimated that in 2019, competitions involving vehicles that have at least four non-aligned wheels generated a gross output of 159.2 billion euros, with a total added value of 66.9 billion euros. These events created over 1.5 million total paid jobs.
The competition held at the Indianapolis Motor Speedway in Indiana, USA, from June 1, 2022, to May 31, 2023, generated $1.058 billion in annual economic activity. It supported up to 8,440 jobs and provided approximately $360 million in labor income.
The F1 Las Vegas Grand Prix 2023 generated an economic impact of nearly $1.5 billion, supporting approximately 2,200 jobs and providing about $52 million in wages for local workers. Tourist spending during the event was 3.6 times higher than that of regular tourists. The government collected $77 million in state and local taxes. Meanwhile, the F1 Australian Grand Prix 2023 had an economic impact of $268 million, with direct expenditures of $144 million, and supported 1,149 jobs.
In 2023, the Moto GP event in Thailand saw an 11% increase in international tourists, generating nearly 4.5 billion baht in economic circulation. This October, Thailand will host the 18th race of the Moto GP, which is expected to attract a significant number of tourists and generate substantial economic activity related to the event.
Recently, Motorsports has expanded its fan base through entertainment media, showcasing races and behind-the-scenes content. This has made Motorsports more accessible and familiar to the general public, leading to increased spectatorship and revenue at various racing events.
Although Motorsports have a positive economic impact on host countries, there are important considerations when bringing major international Motorsports events to a country.
The licensing fees for hosting major Motorsports events are high. For instance, Thailand’s five-year Moto GP hosting rights cost approximately 1.8 billion baht. The hosting fees of F1 events vary by racing location: Monaco, the flagship F1 race, has the lowest fees at around $20 million, while Azerbaijan has the highest at $57 million. Singapore’s hosting fees are approximately $35 million.
Hosting such events also requires having a ready, attractive, and standard-compliant racetrack. If city streets are used as racing venues to promote the city’s scenery, significant investment is needed to upgrade road conditions and develop the necessary infrastructure to support the event, involving substantial budgets.
Motorsports events also emit significant amounts of greenhouse gases from fuel, energy, and related economic activities. Therefore, managing greenhouse gas emissions appropriately is crucial. For example, the F1 Singapore Grand Prix aims to host sustainable events by reducing greenhouse gas emissions from energy use and incorporating renewable energy sources into their operations.
In the ASEAN region, major Motorsports events are held in Singapore, Malaysia, Indonesia, and Thailand. These events are considered mega-events, involving complex regulations, especially concerning temporary import-export procedures. These complexities can pose significant challenges and obstacles to organizing such events.
Hosting major global Motorsports events in ASEAN member countries brings substantial economic benefits, including revenue generation, job creation, tourism stimulation, and overall economic growth for both the country and the region. However, these benefits come with significant investments and the need for careful planning related to the event and infrastructure development. Thailand, aiming to become an F1 host, must also thoroughly evaluate and weigh its readiness and preparedness in all aspects.
Author:
Ms. Patcha Thamrong-ajariyakun
Senior Researcher
International Institute for Trade and Development (Public Organization)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 37 Issue:12681
Date: Wednesday, Jul. 10, 2024
Page: 8 (bottom)
Column: “Asean Insight”
