Business

Formula one revs up Singapore's businesses and economy

Chef Reyaz Ahmad
Image caption Chef Ahmad is preparing for one of the busiest weekends of the year for his team

Chef Reyaz Ahmad is busy preparing kathi rolls in the kitchen of Go India restaurant in Singapore. It has taken him five minutes to wrap freshly cut greens and grilled chicken flavoured with exotic Indian spices into a toasted roll of bread.

The rolls are one of the best selling items on the restaurant's menu. There is just one problem though.

Chef Ahmad and his team will have to make 12,000 of them over the next three days as the restaurant sets up a kiosk at the Formula One circuit in the city.

The hard work does have its rewards. As many as 18,000 people buy food from its kiosk at the venue during the weekend, making a substantial contribution to its earnings.

"We have a revenue jump of close to 30 to 40% for the month, due to our sales at the Formula One kiosk," Pankaj Tandon, managing director of Go India, tells the BBC.

Winning formula?

Its just not the businesses that are benefiting. The government's investment into bringing Formula One to Singapore is paying off as well.

According to initial estimates, the cost of hosting the Grand Prix is 150m Singapore dollars ($115m; £75m) per year. As much as 60% of that is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors to the island nation.

If tourist numbers are anything to go by, the authorities have succeed in their objective.

According to the STB, the country generated an extra S$160m in tourism revenue in 2010 as a result of hosting the race. The figure was S$93m in 2009 and S$168m in 2008.

Analysts say that along with this, Singapore is also reaping intangible rewards.

"After the first year, people stood up and took notice, Singapore just exploded on the world stage," says Ben Heyhoe Flint of sponsorship consultancy Fuse.

"It showcased that the city had a lot more to offer than just being a transit point for trans-Pacific travellers," he adds.

It is little surprise then, that businesses can't seem to get enough of it.

"Formula One has become one of those events which we look forward to year after year," Go India's Mr Tandon says.

"It lets us break away from the regular monotony of a restaurant and get into something much bigger, much larger," he adds.

'World stage'

Image caption Tables at Pangaea nightclub sold out far in advance of the race weekend

While existing businesses and the government reap profits, new ones are looking to join the bandwagon as well.

Pangaea, one the world's most famous nightclubs, has timed the launch of its Singapore branch to coincide with the race weekend.

With tables priced as high as S$20,000 per night, its not surprising to see why the club is keen to tap in to the Formula One frenzy.

"All the billionaires, the lead corporate chief executives and lots of celebrities are going to be in town for the weekend," Michael Van Cleef Ault, principal of The Pangaea Group, tells the BBC.

"It is a great time to open, because you get a world stage automatically presented to you without a lot of work," he adds.

Despite the high prices, Pangaea is sold out for the entire race weekend and is expecting revenue of as much as S$1m during the period - almost 10% of the total cost of setting up the place.

"Because there is so much wealth that comes in this week, the demand for tables at top clubs outstrips supply," Mr Ault explains.

"The Formula One weekend is the best time to throw a party."

Target achieved?

Singapore's current Formula One contract expires next year. While the venture has been successful, the government has yet to decide whether it wants to renew the agreement.

Analysts say that it will be a tricky decision for the authorities to make.

"Singapore has achieved what it set out to achieve," says Mr Flint of Fuse.

"Whether it wants to build on that success, maintain that profile and carry on the brand further, time will only tell," he adds.

While uncertainty remains about the long-term future of Formula One in the city-state, in the short-term, the car engines are ready to rev up and the fans are in place to set the cash registers at Go India and Pangaea ringing.