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F1 to rev up Singapore's events calendar till 2021
IT is official - this year's Singapore Grand Prix will not be the last.
Singapore is extending its contract to remain a Formula 1 venue for four more years, keeping the iconic night race on the calendar until 2021, as it aims to work with F1's new management to maintain the appeal of future editions.
The deal was sealed on Friday after several rounds of negotiations, putting months of fevered speculation to rest. Talks between the parties kicked into high gear in February after Liberty Media concluded its US$8 billion takeover of F1 in January.
"I am glad that all parties have been able to agree on commercial terms for an extension as F1 and Singapore have been good for each other," said Minister for Trade and Industry S Iswaran, speaking at a press conference.
The cost of organising the race is also expected to ease to about S$135 million each year, down from S$150 million currently, despite operational costs rising over the last 10 years with inflation. Mr Iswaran explained: "The reason for that is multi-faceted. We've had 10 years of experience with the race, and our race promoters have been able to work with different parties . . . (to) realise operational efficiencies and find new ways to generate some of the revenue possibilities as well." He did not comment on whether Singapore secured a cheaper hosting fee, citing commercial confidentiality.
The government will continue to fund 60 per cent of the cost of the race, while race organiser Singapore GP - backed by hotelier Ong Beng Seng - will cover the balance.
This comes as year-to-date ticket sales for the 2017 Singapore Grand Prix are trending up 19 per cent year-on-year, with the weekend sales still to be included. In 2016, sales sank 15 per cent to its lowest tally of 73,000, against the backdrop of a weak economy and the Zika outbreak. Some 100,000 spectators thronged the inaugural race back in 2008.
Over the past 10 years, the Singapore Grand Prix has attracted over 450,000 visitors to the city-state, yielding a projected S$1.4 billion in tourism spend. Some 780 million viewers worldwide have tuned in over the years to watch the street race, and with it glimpsed spectacular views of the nation's distinctive skyline.
There are also spill-over effects for businesses, with over 90 per cent of race-related works subcontracted to local companies.
Commenting on expected visitorship and tourism spend for future races, Lionel Yeo, chief executive officer of the Singapore Tourism Board, said: "Our expectation is that we will continue to be able to get the same level of benefits, if not higher."
Race weekend typically brings brisk business for hotels and food & beverage establishments as the buzz from the track spills over to outside it. And with Malaysia pulling out after this year, Singapore's street circuit race remains the only South-east Asian destination on next year's calendar.
This weekend, the trackside Grand Park City Hall hotel is expected to run a full house while Grand Park Orchard is running at over 95 per cent. The Pan Pacific Singapore and Marina Bay Sands are also expecting nearly full occupancy for race weekend. Meanwhile, The Fullerton Hotel and The Fullerton Bay Hotel are already fully booked.
The four-year extension is a departure from previous five-year contracts, and one reason mooted is the expiration of the current Concorde Agreement in 2020. The Concorde Agreement is a contract between the Fédération Internationale de l'Automobile, F1 and the racing teams which dictates terms by which the teams compete.
"Singapore GP may have wanted a shorter period than normal - or may have a break clause - in case the Concorde agreement isn't renewed for 2021," suggested Anthony Indaimo, head of business (Asia) at WithersKhattarWong.
With four new races to come for the Singapore Grand Prix, the big question now is how to keep existing spectators enthralled and attract new ones.
"In terms of the current set-up, this could include new activities at trackside and bigger entertainment acts," said Deloitte Singapore's head of sports business service James Walton, adding that the organisers could also look at more community engagement projects and work to further mitigate pain points such as road closures. The road closures have been a bugbear for motorists and some retailers in the Marina Bay area.
"One area of improvement would be helping fans trackside to see what is happening in the race, perhaps through live streaming to mobiles," Mr Walton added.
Liberty Media, a conglomerate with assets such as concert organiser Live Nation and Viacom, will likely be a useful partner. Driven by Liberty, F1 is trying to breathe new life into the sport by leveraging digital platforms and social media for greater access to content and increasing interaction between F1 drivers and fans. In addition, it is keen on introducing limitations on team budgets to make the sport more competitive and attract new viewers.
F1 chief Chase Carey, who described the Singapore night race as a signature event, said: "In the next three to four years, we can really take F1 to a place that is good for all our partners and add a new level of excitement and new dimensions to the sport."
As F1 eyes a bigger presence in Asia, the Singapore race gives F1 a gateway to the region, he added. The race is seen as a prime example of what it is planning to replicate at other venues - a week-long celebration with a race at the centre and fringe events such as concerts and business conferences. For instance, headliners at this year's race weekend include Calvin Harris and Ariana Grande.
Meanwhile, no title sponsor has been announced as yet for the 2018 Singapore Grand Prix (Sept 14-16). Current title sponsor Singapore Airlines (SIA) said in response to queries that it would be reviewing whether to continue in its role.