F1 returns to Austin with economic impact that surpasses ACL Music Fest, SXSW
Economic impact tantamount to hosting 2 Super Bowls this weekend
https://www.bizjournals.com/austin/n...source=twitter
By ABJ staff
Oct 21, 2022
The Formula One U.S. Grand Prix is back in Austin.
This weekend, Circuit of The Americas is hosting its 10th F1 race and its first under a new contract that runs through 2026.
The global automotive sport arrived in Austin in 2012. The Texas capital has continued to evolve as a hub of tech and commerce over the past decade, so it felt like a good time to examine the business impact of this mammoth event. In addition to being the focus of the international racing community this weekend, COTA will be a hot spot for CEOs and billionaires, with deals getting done over drinks in the Paddock Club.
Grand Prix organizers expect more than 400,000 attendees over the three days and say they will likely eclipse last year's record attendance. That total for the whole weekend includes the 140,000 or so expected at the track for Sunday's race.
What is the economic impact of F1 in Austin?
By at least one estimate, the U.S. Grand Prix has a bigger economic impact on the Austin area than either Austin City Limits Music Festival or South by Southwest.
The race last year had a total economic impact of around $980 million, including $434 million in direct spending. That’s according to an analysis by local economic analysis firm AngelouEconomics, which works with COTA to measure economic impact as part of the process of applying for funding from Texas' Major Events Reimbursement Program.
For comparison, ACL had an estimated economic impact of $369 million in 2021, including $28 million in direct spending, according to a different AngelouEconomics study. And SXSW had an economic impact of $280.7 million in 2022, according to a study by Greyhill Advisors.
Another neat comparison: Super Bowls tend to yield about half of what F1 brings to Austin.
For its analysis of F1, AngelouEconomics looks at a combination of direct spending, indirect economic impacts and induced economic impact to create a big picture estimate of economic impact. It’s unclear how that differs from Greyhill’s methodology.
COTA collected nearly $200 million from the state between 2012 and 2020, according to the Associated Press.
Matt Patton, executive vice president for AngelouEconomics, said the impact from F1 is so large because of the event's sheer size and the fact that it’s more of a global sport. Other races are held in places like Monaco and Abu Dhabi, so attendees are more inclined to have a higher daily spend when in Austin.
That number continues to rise as the sport grows in popularity, boosted by the Netflix show "Drive to Survive."
“There are different ways where COTA is becoming a little more recognizable and F1 is becoming a little more recognizable,” Patton said. “It’s a really great event to get people from outside of the area to visit and it really is one of those internationally recognized events. We’re really lucky to have this one here.”
Additionally, the impact of the F1 race was higher in 2021 because it was the first since the start of the pandemic, when people were starting to become vaccinated and return to large gatherings. The popular Netflix show drew more people in during the pandemic.
“There was an increased appetite to attend this event,” Patton said. “People want to come visit and experience Austin.”
He expects the numbers to keep climbing, especially if organizers can continue to grow attendance — this race will feature the first infield grandstand — and if ticket prices continue to rise in the face of demand.
"If there are expansions to how many people can attend the event, then sure the numbers can keep going," he said. "It’s a really exciting thing to see this many people coming to Austin – especially coming into Austin out-of-state and out-of-country as well."
— Justin Sayers
What kind of companies are out at the Grand Prix?
Sponsors will be all over COTA this weekend. They include Cash App, Fevo, Google Chrome and Lenovo.
Tech companies will definitely get in on the festivities. Zenoss Inc., an AI-powered security company, has been hosting events for customer, partners and media at the track since 2015. This year, it’s working with Sopris Technologies for a three-day Grand Prix experience.
“Formula 1 weekend has always been an opportunity for our team to recognize our customers and partners in a unique way,” CEO Greg Stock stated.
And the activity extends well beyond the track, as well. Romanian cybersecurity company Bitdefender teamed up with Ferrari driver Carlos Sainz at an event at the Line Hotel that showed off how Ferrari uses technology to capture and relay real time data to drivers and pit crews.
Other companies take a philanthropic approach during the week.
A software company called Smartsheet teamed up with nonprofit The Hidden Genius Project, which provides tech education and mentorship to young Black men, to have 50 students from Austin high schools join workshops with tech innovators and get a behind-the-scenes look at COTA and meet McLaren driver Lando Norris.
One of the McLaren F1 team’s tech partners, Cadence Design Systems, brought pro drivers and members of local nonprofit Girlstart together at an Oct. 19 event in Austin. Cadence, meanwhile, made a donation to Girlstart’s annual luncheon.
— Will Anderson & Brent Wistrom
Prev
Linear Mode
