Formula 1's Las Vegas race is expected to drive an economic boost equal to 2 Super Bowls
- The return of F1 to Las Vegas is expected to boost the local economy by $1.3 billion.
- Resorts will offer high-end experiences to wealthy fans who are expected to drive the spending.
- This is the latest event in Las Vegas' transformation into a sports and entertainment hot spot.
For the first time since 1982, F1 will race on Las Vegas' iconic strip, attracting wealthy fans from all over the world and creating an economic boost that's projected to be more than double the size of the city's upcoming Super Bowl.
The Las Vegas Grand Prix, scheduled for November 19, is expected to be the single largest event the city has ever seen, according to the Las Vegas Convention and Visitors Authority and research from Jeremy Aguero, a principal analyst at Applied Analysis, a quantitative-analysis firm.
The company estimates the race will pump $1.3 billion into the local economy. The 2024 Super Bowl, which Las Vegas is hosting for the first time, is expected to bring in about $600 million to the area. F1 fans will likely stay longer and spend more than a typical Las Vegas tourist, Aguero said.
"It will be the largest single economic impact for any event that we've had in southern Nevada," Aguero told Business Insider. The typical tourist spends about $800 a trip in Vegas, he said, but a typical F1 fan is expected to spend more than $3,000 during their trip.
The Las Vegas Convention and Visitors Authority is projecting that visitors for the race will spend a whopping $966 million, with another $316 million spent on event operations and support costs.
The LVCVA expects the race will create 7,700 jobs and bring in about $361 million in salaries and wages.
The event comes at an opportune time. Tourism slows down in the city around Thanksgiving, Aguero said, so the race could lead to the biggest November in Las Vegas history.
F1 spectators can drop 6 figures or more on viewing experiences
While F1 is known for attracting affluent spectators, the Las Vegas race comes with a steep price tag.
Three-day, standing-room tickets for the race sold for $500 and were snapped up within minutes, while grandstand seats started at $2,000 each. "Heritage" tickets, which offer premium hospitality, sold for $5,000 each.
The Nevada Independent reported that the average ticket price for this year's Las Vegas Grand Prix was $1,667, making it the most expensive F1 race in the world. This year's Miami Grand Prix was the second-most expensive, with an average ticket price of $1,113. Meanwhile, the average ticket to the Hungarian Grand Prix was just $184.
The local casinos and resorts aren't missing the opportunity to cater to the affluent demographic.
For $11,247, the MGM Resorts' Bellagio Fountain Club is offering gourmet culinary experiences, exclusive views of the post-race podium, and an up-close view of the top finishers.
Other high-roller experiences range from the Palms' $777,000 "777 Experience" — which comes with a 9,000-square-foot suite — to the Wynn Las Vegas' staggering $1 million package, offering everything from a 5,800-square-foot, three-bedroom duplex with billiard and fitness rooms to a lifetime membership for privileged services.
And then there's Caesars Palace's Nobu Emperor Package, which includes a private culinary experience with Chef Nobu Matsuhisa and a luxurious 10,300-square-foot, three-bedroom living space for five days — complete with a 4,700-square-foot terrace with views of the track and a private butler — for a cool $5 million.
These offerings are part of a broader strategy by the city's entertainment and hospitality industries to capitalize on the event, with regular room rates expected to surge to three to six times the usual rates, Aguero said.
Las Vegas is becoming a sports and entertainment hot spot
The Grand Prix in Las Vegas is not just a sporting event; it's a showcase of the city's prowess in delivering luxury experiences beyond gambling, especially in the sports and entertainment worlds.
"That consumer that's coming in for a sporting event or that consumer that's coming in for a concert is spending more than a traditional average visitor to Las Vegas," Aguero said. "And so that is something that is phenomenal that we have seen emerging for some time."
Boxing and mixed-martial arts events attract celebrities and high-end consumers to Vegas, and tickets to the local NFL games command high prices because visiting-team fans travel long distances and spend more.
The Las Vegas Convention and Visitors Authority said tourists spent an all-time high of $44.9 million in 2022, and total economic output related to visitor spending reached a record $79.3 billion, a 25% increase from the previous record set in 2019.
While spending on key categories like gaming, shopping, and rooms was down in 2022 compared to 2019, entertainment was the one category that saw the biggest boost.
Despite the record spending by tourists in 2022, the number of visitors fell from 42.5 million in 2019 to 38.8 million, the LVCVA said. However, per-trip visitor spending grew 33.4%, to a record $1,156 in 2022.
Vegas' F1 race impact will have a ripple effect throughout the area
While the race's economic impact will be huge in Las Vegas and the surrounding areas, Aguero noted that local governments and residents will also benefit from a huge tax windfall.
"This will be the single largest tax-collection event in Nevada's history by a fairly healthy margin," Aguero said. "We believe the net impact of Formula 1 will be about $87 million in tax revenue."
Half of that will come from hotel room and sales taxes directly linked to the F1 race and other live entertainment events that week, he said.
And so far, the cost of hosting the race appears to be minimal for the city and Clark County. Liberty Media, the American company that owns F1, recently said that they have spent approximately $400 million on construction and infrastructure improvements on top of the $240 million they spent on acquiring local land.
F1 has asked the county to help pay for the infrastructure portion, which is about $40 million, but that is still up in the air.
F1 also created the Las Vegas Grand Prix Foundation to help area charity groups and is supporting the "Million Meals Project," which aims to provide 1 million meals to local residents in need.
Economists have noted a recent surge in consumer activity and enthusiasm for experiences like live concerts and sporting events.
"As we emerged from the pandemic, our consumer research made clear it was the perfect moment for us to capitalize on pent-up travel demand," Kate Wik, the Las Vegas Convention and Visitors Authority's chief marketing officer, said in a press release. "We're thrilled to see not only the strong rebound in visitation but also the significant impact our visitors have on our state's economy."
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