Formula One and other big events look set to drive growth in the hospitality industry
- Written by Rachel J.C. Fu, Chair & Professor of Dept. of Tourism, Hospitality and Event Management | Director of the Eric Friedheim Tourism Institute | Affiliate Professor of Dept. of Information Systems and Operations Management, University of Florida
In late 2023, I embarked on my first Formula One race experience, attending the first-ever Las Vegas Grand Prix[1]. I had never been to an F1 race; my interest was sparked during the pandemic, largely through the Netflix series “Formula 1: Drive to Survive[2].”
But I wasn’t just attending as a fan. As the inaugural chair[3] of the University of Florida’s department of tourism, hospitality and event management[4], I saw this as an opportunity. Big events and festivals represent a growing share[5] of the tourism market – as an educator, I want to prepare future leaders to manage them.
And what better place to learn how to do that than in the stands of the Las Vegas Grand Prix?
The future of tourism is in events and experiences
Tourism is fun, but it’s also big business: In the U.S.[6] alone, it’s a US$2.6 trillion industry employing 15 million people. And with travelers increasingly planning their trips around events rather than places, both industry leaders[7] and academics are paying attention[8].
Event tourism is also key[9] to many cities’ economic development strategies – think Chicago and its annual Lollapalooza music festival, which has been hosted in Grant Park since 2005. In 2023, Lollapalooza generated an estimated $422 million[10] for the local economy and drew record-breaking crowds[11] to the city’s hotels.
That’s why when Formula One announced it would be making a 10-year commitment[12] to host races in Las Vegas, the region’s tourism agency was eager to spread the news[13]. The 2023 grand prix eventually generated $100 million in tax revenue[14], the head of that agency later announced.
Why Formula One?
Formula One offers a prime example of the economic importance of event tourism. In 2022, Formula One generated about $2.6 billion[15] in total revenues, according to the latest full-year data from its parent company. That’s up 20% from 2021 and 27% from 2019[16], the last pre-COVID year. A record 5.7 million fans attended Formula One races in 2022, up 36% from 2019.
This surge in interest can be attributed to expanded broadcasting rights, sponsorship deals and a growing global fan base. And, of course, the in-person events make a lot of money – the cheapest tickets to the Las Vegas Grand Prix were $500.
Turn 1 at the first Las Vegas Grand Prix.
Rachel Fu, CC BY[17]
That’s why I think of Formula One as more than just a pastime: It’s emblematic of a major shift in the tourism industry that offers substantial job opportunities. And it takes more than drivers and pit crews to make Formula One run – it takes a diverse range of professionals in fields such as event management, marketing, engineering and beyond.
This rapid industry growth indicates an opportune moment for universities to adapt their hospitality and business curricula and prepare students for careers in this profitable field.
How hospitality and business programs should prepare students
To align with the evolving landscape of mega-events like Formula One races, hospitality schools should, I believe, integrate specialized training in event management, luxury hospitality and international business. Courses focusing on large-scale event planning, VIP client management and cross-cultural communication are essential.
Another area for curriculum enhancement is sustainability and innovation in hospitality. Formula One, like many other companies, has increased its emphasis on environmental responsibility[18] in recent years[19]. While some critics have been skeptical[20] of this push, I think it makes sense. After all, the event tourism industry both contributes to climate change and is threatened by it[21]. So, programs may consider incorporating courses in sustainable event management, eco-friendly hospitality practices and innovations in sustainable event and tourism.
Additionally, business programs may consider emphasizing strategic marketing, brand management and digital media strategies for F1 and for the larger event-tourism space. As both continue to evolve, understanding how to leverage digital platforms, engage global audiences and create compelling brand narratives becomes increasingly important.
Beyond hospitality and business, other disciplines such as material sciences, engineering and data analytics can also integrate F1 into their curricula. Given the younger generation’s growing interest[22] in motor sports, embedding F1 case studies and projects in these programs can enhance student engagement and provide practical applications of theoretical concepts.
Racing into the future: Formula One today and tomorrow
F1 has boosted its outreach to younger audiences in recent years and has also acted to strengthen its presence in the U.S., a market with major potential for the sport. The 2023 Las Vegas race was a strategic move[23] in this direction. These decisions, along with the continued growth of the sport’s fan base and sponsorship deals, underscore F1’s economic significance and future potential.
Looking ahead in 2024[24], Formula One seems ripe for further expansion. New races, continued advancements in broadcasting technology[25] and evolving sponsorship models[26] are expected to drive revenue growth. And Season 6 of “Drive to Survive” will be released on Feb. 23[27], 2024. We already know that was effective marketing – after all, it inspired me to check out the Las Vegas Grand Prix.
I’m more sure than ever that big events like this will play a major role in the future of tourism – a message I’ll be imparting to my students. And in my free time, I’m planning to enhance my quality of life in 2024 by synchronizing my vacations with the F1 calendar. After all, nothing says “relaxing getaway” quite like the roar of engines and excitement of the racetrack.
References
- ^ Las Vegas Grand Prix (www.f1lasvegasgp.com)
- ^ Formula 1: Drive to Survive (www.netflix.com)
- ^ the inaugural chair (hhp.ufl.edu)
- ^ department of tourism, hospitality and event management (hhp.ufl.edu)
- ^ a growing share (www.emerald.com)
- ^ U.S. (www.ustravel.org)
- ^ industry leaders (www.ifea.com)
- ^ academics are paying attention (doi.org)
- ^ Event tourism is also key (www.chicagotribune.com)
- ^ an estimated $422 million (www.chicagobusiness.com)
- ^ record-breaking crowds (www.chicagobusiness.com)
- ^ making a 10-year commitment (www.espn.com)
- ^ eager to spread the news (press.lvcva.com)
- ^ $100 million in tax revenue (theathletic.com)
- ^ about $2.6 billion (www.libertymedia.com)
- ^ 27% from 2019 (www.libertymedia.com)
- ^ CC BY (creativecommons.org)
- ^ environmental responsibility (theathletic.com)
- ^ in recent years (www.theguardian.com)
- ^ have been skeptical (www.theguardian.com)
- ^ contributes to climate change and is threatened by it (doi.org)
- ^ younger generation’s growing interest (www.motorsport.com)
- ^ strategic move (www.ktnv.com)
- ^ Looking ahead in 2024 (www.formula1.com)
- ^ broadcasting technology (www.nytimes.com)
- ^ evolving sponsorship models (formulapedia.com)
- ^ Feb. 23 (www.formula1.com)
