Was the Formula One weekend in Las Vegas worth all the trouble? Well, it probably depends on who you ask.
Certainly, for the promoters of the world’s most expensive per-ticket F1 event, there’s a lot to be happy about — even if the economic impact falls short of the $1.7 billion projected by F1’s parent company, Liberty Media.
For locals, smaller venues and countless workers disrupted by a year of race-related operations, however, it’s been far more pain than profit. Whatever economic “benefit” might have occurred obviously wasn’t shared equally by all those who bore the costs — raising an important question about whether or not record hotel revenue for MGM Resorts International should really be the benchmark for gauging broader “economic development” in Southern Nevada.
While the biggest corporate players along the resort corridor are busy counting their receipts from race day, there are countless venues that have plenty of reasons to be more frustrated than grateful for F1’s Las Vegas residency.
According to a report from Nevada Public Radio, the disruptions associated with turning public roadways into a private racetrack have had a profound impact on businesses throughout the area. One gas station cut its number of employees from 12 to just five. The manager of a non-casino bar in the area said her employees have had their hours cut. A worker at another bar said she had noticed a similar drop-off in business at her place of employment.
Such effects, especially on smaller venues, is unsurprising given the way foot traffic has been throttled by the endless maze of temporary bridges, detours and closures. Turning an entire resort corridor into an exclusive members-only race club for a weekend was always going to require sacrifices from the broader community.
However, it’s not just “the little guy” who bore the brunt of F1’s obstreperous overhaul of the beloved Las Vegas Strip. As it turns out, tearing up and shutting down the main artery that infuses business with a fresh supply of patrons had repercussions for even the most successful shows and attractions in the area.
Ross Mollison, producer of “Absinthe,” estimated in an open letter to race organizers that his shows might have lost about half a million dollars due to race day activities.
“Many shows simply canceled,” wrote Mollison. “Many restaurants faced reduced demand. Our company’s successful shows took a massive hit … If you multiply this across the many shows in Vegas, it must have cost producers and promoters millions.”
Mollison went on to explain how the exclusivity of the event — combined with its timing — wrought untold opportunity costs on many businesses, shows and venues. “When you promote an event such as F1 with the message that it is going to take over the entire city, the regular Vegas visitor disinterested in F1 stays away.”
Of course, such opportunity costs aren’t likely to be included in the final tabulation conducted by F1 promoters, lobbyists or economic “analysts” who cheer for the spectacle of bringing a European motorsport to the Mojave. Instead, the profits of the event’s biggest official partners will be paraded around as proof that the disruption, spectacle and inconvenience was “worth it” for the community of Las Vegas as a whole.
Massive revenue for a select few, however, isn’t the same thing as economic development for an entire region — especially when the unseen costs have been shared by a much broader swath of workers, businesses and residents than the profits have been.
From workers facing longer commutes and smaller paychecks, to businesses that were forced to close down for an otherwise busy weekend, plenty of individuals and venues were forced to make sacrifices in the name of helping F1 gain a foothold in America and fill MGM’s grandstands.
Some of those costs and sacrifices are easier to calculate than others. For example, the $40 million F1 demanded from the county fits nicely onto a spreadsheet; but the lost jobs, missed opportunities and reduced earnings of workers over the past year aren’t as straightforward to tabulate. And while MGM and other major resorts might have seen a nice bump in revenue, many of those who were forced to bear the brunt of the event’s growing pains never had the opportunity to reap similar rewards.
Instead, they were left sitting on the sidelines with an F1-installed viewing obstruction between them and the action — which makes it difficult to feel like all those sacrifices were “worth it” in the end.
Michael Schaus is a communications and branding expert based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him at SchausCreative.com or on Twitter at @schausmichael.
