The Grand Prix event is a net contributor to Bahrain’s economy, with benefits derived from the steady spending by the host, various enterprises and spectators.
Bahrain is hosting fourth round of the 2015 Formula One Championship calendar. The exceptionally critical final round is scheduled to take place on November 29 at the Yas Marina Circuit in Abu Dhabi. Clearly, the Gulf has emerged as an integral part of these races.
A number of local firms led by Gulf Air provide sponsorship for the event and with all the ensuing advantages. The government-owned Gulf Air has a year-round campaign of the championship by painting its aircraft with details relating to the F-1.
The carrier gets business from F-1 fans, some of who fly from relatively long distances to attend the three-day event.
Meanwhile, Batelco and the other local telecom companies are also key sponsors.
Some firms, including financial institutions, buy primary viewing spots for their valued clients at the event. Another source of funds is generated from sales of tickets as well as spending by visiting fans on ancillary items during the course of their stay. In addition, the hotels, telcos and car rental firms get their fair share of revenues.
Ticket prices have gone up notably, with the then lowest price amounting to $106 for three days. The current going rate for the same stands at $159.
Then there is the spillover effect to numerous sectors as money spent during F-1 circulates through the economy. The benefits are not confined to a single car rental firm or restaurant.
Nevertheless, the absence of a comprehensive tax system undermines the assessment of the full effects of the Grand Prix. It is equally unfair to exaggerate the positive effects of the three-day event on the economy.
In reality, it is not easy to make distinctions between the direct and indirect benefits of the event. Recently, a local businessman found himself in a race against time to deliver three properties to his client ahead of F-1.
In 2004, Bahrain emerged as the first country in the MENA region to host the tournament. The 2011 event was cancelled after several F-1 teams decided to shun the scheduled race in order to show their displeasure with the way the authorities handled the call for reforms.
True, the Bahrain International Circuit (BIC) was built in time to stage the 2004 event. Other than hosting the Grand Prix, the BIC serves as a multipurpose venue with enterprises using the circuit for meetings, conferences and a launch pad for new products.
Nevertheless, fresh infrastructure works keep emerging via road networks linking numerous parts of the country to Sukir. The BIC is located in the Sakir area, south of the capital city of Manama.
Not surprisingly, Bahrain pays the organisers to be represented in the other races that make up the calendar. In 2013, it was reported Bahrain paid $40 million for the exposure. Bahrain is one of 20 host cities of an event regarded as the third most popular sporting spectacle after the Olympics and the football World Cup.
What’s more, numerous commercial areas and residential complexes have since been built within the BIC’s vicinity. To be sure, Formula One has proven to be an advantage for Bahrain’s economy.
The writer is a Member of Parliament in Bahrain.