F1 Cars Racing During Las Vegas Grand Prix

Las Vegas GP Benefits Exaggerated Industry

Report Claims Benefits of First F1 Las Vegas Event Exaggerated

By Amelia Walker Senior Content Writer Updated: 27 April 2024

Amelia Walker Senior Content Writer

Amelia Walker is a Senior Content Writer at Betting.US. She has a law degree and deep knowledge of the gambling laws in the United States. Her mission is to keep players informed about responsible gambling, while her passion for sports helps her create useful guides. Amelia has over a decade of experience in betting, which has positioned her as a trusted voice among our readers.

See Full Bio

A recent report has cast doubts on the claimed benefits resulting from the inaugural Formula 1 Las Vegas Grand Prix.

The report suggests that earlier claims of the event’s economic impact may have been exaggerated by the company reporting on the benefits. The event took place last November amid a huge amount of hype, with claims that it would prove to be hugely beneficial for Las Vegas in terms of finances and tourism.

According to findings presented by Applied Analysis to the Las Vegas Convention and Visitors Authority’s (LVCVA) board of directors, the Grand Prix generated a net economic impact of $1.5 billion on local tourism. However, this has been questioned following an independent analysis by Frank Stephenson, an economics professor at Berry College specializing in hotel profits related to sporting events.

Only Modest Increase Seen

Stephenson’s investigation was published by The Center Square, and it indicates that hotel revenue experienced a modest increase of only $60-$70 million on the day of the race. It also stated that there was a decline seen throughout the rest of the week.

Occupancy rates on the nights prior to the event were said to be much lower, dropping by 20 percent on Monday through to Wednesday, and experiencing slight fluctuations on Thursday and Friday. Saturday, which was the day of the race, saw a minor increase of 3 percent in occupancy rates compared to the previous year, reaching 80 percent.

Stephenson also highlighted points regarding the distribution of revenue. While the reported increase in hotel revenue came across as being impressive, he said that a large portion of it went to the corporate owners of the hotels, rather than remaining within the local Las Vegas economy for further investment. He said:

…additional hotel revenue heads to the hotel’s corporate owners and does not remain in Las Vegas to be re-spent, as economic impact reports often claim.

He added that some people might have come for the race itself “… but whatever modest gains there were, were almost certainly offset by the whole week leading up to it.”

It was further revealed that Clark County, which invested $40 million in hosting the event, also cited the $1.5 billion economic impact figure that was provided by Applied Analysis in its own report on the costs and benefits of the F1 Grand Prix.

Marketing Company Faces Criticism

Applied Analysis, the Las Vegas-based marketing firm commissioned by LVCVA for economic impact assessments, has faced criticism regarding its objectivity.

The Center Square reported that the firm’s primary function appeared to be providing favorable figures to support subsidies for various Las Vegas events and professional sports ventures, including Allegiant Stadium, the Grand Prix, and a proposed new stadium for the Oakland Athletics at the Tropicana Las Vegas site.

Critics have said that relying solely on inflated economic impact figures may lead to misguided investments and missed opportunities for sustainable growth. They stated that in the future, comprehensive and unbiased assessments would be crucial in shaping the future of Las Vegas as a host city for major sporting events.