Preparations for round two have begun.
Workers are (temporarily) removing trees in front of the Bellagio Fountains, road closures are cropping up on local commutes and soon Las Vegas Boulevard will be transformed from a tourist corridor into a private raceway for some of the fastest cars on the planet.
The good news for race organizers is that last year was such a boondoggle, round two of the Las Vegas Grand Prix in November is bound to look like a massive improvement by comparison.
And to be fair, some of the major complaints from last year’s racing spectacle have, ostensibly, been addressed to some degree by the powers in charge. For starters, the months of roadworks and construction have been truncated to mere weeks of local inconvenience — and Formula One has reached out with an olive branch to locals by promising a free “fan experience” event before the exclusive weekend officially gets underway.
However, there are warning signs on the horizon for even the most diehard advocates of the event that this won’t be the yearly bonanza once promised by race organizers.
Back in July, MGM Resorts International CEO Bill Hornbuckle reported a “softness” in early hotel reservations for race weekend, and Truist Securities gaming analyst Barry Jonas has pointed out that Caesars Entertainment room rates are significantly lower than last year as well.
The lower demand for hotel rooms probably isn’t reason enough for anyone to panic just yet, however, it does raise the question of whether or not a yearly F1 race along the streets of Las Vegas is really going to be the sort of draw everyone thought it would be. Even last year there was worry that F1 may have overestimated the degree to which its well-to-do fanbase was willing to shell out small fortunes to see a late-season race in the Mojave.
In the week before last year’s race, for example, ticket prices had to be slashed dramatically in an effort to fill seats at the last minute — indicating that F1 might have been a bit overambitious when it decided to make Vegas the highest priced race on the calendar that year. It probably didn’t help that by November 2023, Max Verstappen had pretty much locked up his top position in the standings, leaving little drama for fans to enjoy beyond the glitz and glamor of our beloved Vegas skyline.
Perhaps, this year, organizers are adjusting their expectations accordingly with a few more budget-friendly events and affordable ticket packages — although plenty of pricey luxury packages throughout the corridor are still on offer for those who might be interested.
Regardless of whether or not interest in race weekend picks up between now and late November, the Las Vegas Convention and Visitors Authority (LVCVA) is projecting the event will generate a minimum of $250 million in economic impact for the region — a number that will likely only grow closer to the $1.5 billion from last year as we approach race day.
However, those numbers should be taken with a grain of salt.
There’s no doubt last year’s race brought in plenty of money. It was, after all, promoted as the largest sporting event in the world and plenty of high rollers emptied their pockets to snag exclusive “experiences” as part of the weekend. As is so often the case with “economic development” analyses, however, the final numbers presented by the LVCVA hardly accounted for all the costs borne by locals and small businesses during the several months it took to turn the race into a reality.
And that’s really the largest, unresolved, challenge looming as we approach our second year of F1 chaos. There’s no reason to believe those business owners are about to have a significantly better experience than the first time around.
As we saw in Clark County Commission meetings following last year’s race, there were plenty of local workers, entrepreneurs and businesses negatively impacted by turning public roadways into a private racetrack — with some businesses even taking legal action as a result of the financial burden they were forced to endure. As it turns out, erecting barricades and closing off huge swaths of the resort corridor to normal tourists might have worked well to funnel F1 guests into high-priced seats, but it wasn’t exactly a massive success for all the other business interests in the area.
And it wasn’t merely the preparations that caused such economic injury to so many. Ross Mollison, producer of “Absinthe,” estimated that his shows lost about half a million dollars during the course of the race weekend. In an open letter to race organizers, he speculated that producers and promoters of countless Vegas attractions closed down their shows over the weekend, costing them millions of dollars — a cumulative loss that wasn’t clearly accounted for in the official numbers presented by race officials or their cheerleaders in the LVCVA.
Even Clark County found itself in the red after last year’s race — which is a pretty impressive feat considering the event generated more state and local taxes than any other single event in Las Vegas history.
Even if the event manages to exceed the “softened” expectations in terms of overall revenue and economic impact, there’s little reason to think the financial windfall will be more democratically distributed than last year’s. The same businesses and workers who were forced to bear the brunt of last year’s disruption will once again be forced to endure reduced business access and fewer tourist dollars this time around.
As with so many other “economic development” schemes that take root in this state, the ledgers of large, well-connected corporate giants in politically favored industries will be the primary beneficiaries of this year’s F1 spectacle — and for those who cheerlead such cronyism, that will be the only benchmark by which “success” is measured.
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.
