LAS VEGAS (KLAS) — It’s flashy, exclusive, and expected to be a huge success. But, how successful does F1 Las Vegas Grand Prix (LVGP) year 1 need to be to keep racing back over the next decade?
Renee Wilm, LVGP CEO, and the rest of Liberty Media, the parent company of Formula One, ventured to create a one-of-a-kind event in a one-of-a-kind city. Clark County Commissioners then designated the race an annual event over the next 10 years, if not “a lifetime,” Commission Chair Jim Gibson said during the February 7 vote.
That’s on top of a three-year Las Vegas Convention and Visitors Authority (LVCVA) contract that pays for police, fire, and volunteer personnel during the three days of activities, which typically would fall on the event operator’s tab. That contract could be extended after year one, LVCVA officials said in September.
But, neither of those commitments bind the racing giant from speeding down the Las Vegas Strip for either length of time. Wilm ensures Liberty Media will “support the event on a long-term basis” and next year’s race is already on F1’s 2024 calendar.
However, a return on investment may be the determining factor to return past that.
“We also need this to be an economically profitable event over the long term,” Wilm said during a November 8 interview inside the newly constructed pit building just east of the strip. “I think it just becomes a balancing act of ensuring that the expenditures we are making are the right ones.”
She points to expenditures like the 300,000-square-foot pit building and circuit preparations like the 3.8-mile repave and utility undergrounding over the summer. In all, approximately $500 million was invested into the race’s return after four decades.
That’s exactly why LVCVA President and CEO Steve Hill expects the racing giant to stick around, in addition to Liberty Media expecting over three times that amount in revenue during year one.
“We’re confident that there’s going to be future races,” Hill said after this week’s LVCVA Board meeting. “The most important way, that’ll make sense for Formula One (to ensure a return on investment), is to keep having a race because they’ve invested so much money.”
It’s unclear how plummeting hotel rates and ticket prices within the past month, and reported losses of business across several restaurants and venues, may impact the total expected economic spending. Hill added that an expected jump in international visitation, which has yet to meet levels prior to 2020, partly convinced hotel operators to cooperate with disruptive street closures.
Wilm added during a June tour of the then-in-construction pit building that conferences and conventions could occupy the structure throughout the year when not racing to maintain consistent revenue.
Original News Source Link – KLAS
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