This prestigious event is one that Rwanda has recently shown interest in hosting, with discussions on the matter progressing, as highlighted by President Paul Kagame on December 13, 2024.
Hosting a Formula One Grand Prix would require significant investment, including building the race track and maintaining it.
The costs involved cover the construction of the racing circuit, roads for the race, and ongoing repairs to potential damages. Seats for spectators, barriers, and fencing also add to the total expense.
Generally, the cost to build a new Formula One venue ranges between $270 million and $1.5 billion. The Yas Marina Circuit in Abu Dhabi currently holds the record, costing $1.34 billion.
Nowadays, new races come with a 10-year contract, costing almost $48.9 million annually (amounting to about $396.2 million over ten years) and an additional $575 million for race preparation, totaling nearly $1 billion, or roughly 1.3 trillion Rwandan francs.
What could Rwanda gain?
It has been six months since Visit Rwanda partnered with major European teams and various other competitions, which has boosted the country's tourism sector.
The growing awareness has been evident, with a rise in the number of visitors. Rwanda's sports investments have also been aimed at promoting its natural beauty and attracting international events, not just for tourism but also for business opportunities related to sports.
The tourism sector is expected to generate $660 million for Rwanda in 2024, up from $620 million in 2023.
The potential hosting of the Formula One Grand Prix has attracted global attention, and if it materializes, it would significantly boost Rwanda's visibility, especially since the last African Formula One race took place in 1993 at Kyalami, South Africa.
In other countries, such races have proven to generate substantial returns, primarily from ticket sales because money from sponsorships often goes to the organizing company, Liberty Media.
While there have been instances where Formula One races incurred losses, such as in India and South Korea, where the Grand Prix failed to continue after heavy financial losses amounting to $24 million and $37 million respectively in 2012 and 2013, there are numerous successful examples.
For instance, Las Vegas invested $500 million for its 2023 Grand Prix, which generated an impressive $1.2 billion in tourism revenue. Similarly, between 2008 and 2018, Singapore's Grand Prix contributed about $1.4 billion to its economy by drawing in 450,000 more tourists.
In Mexico, the Formula One Grand Prix boosted the country's economy by 12%, largely through spending on luxury hotels and other services, where each Formula One attendee spends an average of $1,730 over the race weekend.
Research shows that between 2012 and 2015, hosting the event in Austin, Texas, generated $2.8 billion.
Formula One races are watched by over 1.54 billion viewers worldwide, with each race attracting an average audience of 70 million people.
With races broadcast in over 200 countries and spanning 635 hours of television coverage annually, the global reach is vast. About 53% of viewers are international, with tourists and teams spending significant amounts in the host country.
In addition to promoting the country, hosting such an event also creates job opportunities for local residents.
For example, the Formula One Grand Prix in Canada creates 640 jobs, while in Austin, Texas, it supports 9,100 jobs and generates $306 million annually.
If Rwanda was to host the Formula One Grand Prix, it could see a significant boost in its economy, both from tourism and the creation of job opportunities for locals.
IGIHE
Source : https://en.igihe.com/news/article/what-could-rwanda-gain-from-hosting-the-formula-one-grand-prix
