SINGAPORE: It’s just days before the roar of the engines will be heard in Singapore.
As the city transforms its streets into the famed Marina Bay Street Circuit ahead of this weekend’s Formula 1 Grand Prix, a familiar buzz of anticipation is building.
This is the 16th edition of the annual night race, and it has grown to become more than just a sporting event.
Other side activities such as concerts and showcases of local cuisine have turned the race into a beacon for international tourism.
Hotels across the island have recorded a surge in demand ahead of the weekend.
As of the middle of September, islandwide hotel occupancies on the books ahead of the F1 weekend hit more than 70%, data from hotel industry research firm STR indicated.
Major players are seeing occupancy levels that eclipse a typical weekend, with Pan Pacific Hotels Group (PPHG) forecasting that its trackside properties will reach between 90% and 100% occupancy.
And despite being the 16th edition of the race, it seems to only be growing in popularity, as PPHG, Fairmont Singapore, Swissotel The Stamford, and Hilton hotels report that their bookings are tracking significantly higher than a typical non-race weekend and ahead of this time last year.
In line with this surge in demand, the hotels have seen a healthy increase in both their average daily rates and revenue per available room (RevPAR).
Based on STR records of performances in 2023 and 2024 for the month of September, F1 generally stimulates an uptick in RevPAR by around 100%.
This means that on an average day of the F1 week, hotels make around double the money per room compared with an average day in the rest of the month.
Across the country’s hotels, the economic benefits of the Grand Prix are also broadening beyond luxury class.
While luxury and upper upscale hotels cemented their market leadership with a robust 13.5% growth in RevPAR over 2023 and 2024, the more telling trend lies in pricing power.
The ability to charge a premium for the F1 weekend grew far more aggressively in the tier below.
The F1 room rate premium for upscale and upper midscale hotels jumped 44% year-on-year, significantly outpacing the 29% premium growth seen at their luxury counterparts.
As top-tier hotels approach their price ceiling, the immense demand is spilling over, giving mid-tier properties leverage to capitalise on the event.
While the F1 Grand Prix is a global event, its intricate assembly is a powerful opportunity and showcase for Singapore-based enterprises.
Kingsmen Creatives, the Singapore-listed firm tasked to manage the physical build-out of the pit street, hospitality suites, grandstands and more, said that discussions with service stakeholders for design, development, technical drawing and compliance reviews have been ongoing since March.
In 2024, Kingsmen won a contract worth up to S$53.2mil to be fulfilled for the F1 Singapore Grand Prix until 2028.
Madeline Lee, the executive director of Kingsmen Exhibits, a unit of Kingsmen Creatives, said that due to the scale of the event, they mobilised 50% more staff than usual for this project, and hired around 30% more contract staff to focus on F1.
“Through F1, we took the opportunity to deepen our technical skill set, our capability in our design development, our capability in innovation and, of course, sustainability.
“From these capabilities, we have then been able to venture into new global businesses,” Lee said, making reference to their involvement in World Expo Osaka this year.
This year, about 850 ITE students between 18 and 23 years old will also be supporting the operations of the race in areas such as hospitality and customer service.
The work attachment opportunity is the result of a tie-up between ITE and event organiser Singapore GP, which began in 2009 and was renewed for seven more years in 2022.
They will contribute in roles such as gate access officials, circuit park guides, VIP concert deck access officials, info booth ambassadors and service support crew.
“Many students have leveraged this experience to secure internships with leading event management companies, strengthening their prospects of landing good jobs and careers,” said a representative from ITE.
Despite the significant tourism and economic benefits brought about by the Singapore Grand Prix, many local businesses within the circuit area reported losses due to the multi-day road closures.
Road closures take place over seven days – Oct 1 to 7 this year.
At the Esplanade, Koh Choon Chye, the owner of restaurant Old School Delights, said that general footfall around the area drops by around 60% to 70%.
Having run the restaurant at Esplanade since 2017, he said that there is a drop in revenue of up to 70% during the F1 period.
With the road closure, it will not be able to provide its usual food delivery or bento catering services.
“It also means our suppliers do not want to provide any delivery service,” Koh said.
“Even if they are approved by Singapore Grand Prix, they can only make deliveries after midnight. For our volume, it is not worth it for them to accept our orders.
“Our regular customers cannot come, and there are no shows and performances at Esplanade, thus there are no concert crowds for us. Most of the F1 visitors are outside Esplanade.
“Our establishment is located on the second floor and it is difficult for us in terms of visibility. We are prohibited to even place standees at level 1,” he added.
Since 2024, Old School Delights has chosen to close during this period.
Over at Marina Square, Fong Jun Jie, the business manager of Singapura Nanyang Coffee, predicted a similar drop in foot traffic.
As it is the establishment’s first year at Marina Square, it is Fong’s first time facing the F1 disruption.
While he plans to keep the store running, he said that having heard from other stores about their experiences, he is also considering workarounds for the week, such as pausing food delivery services.
His food suppliers also have to work around the closures. — The Straits Times/ANN
