Less demand for Las Vegas Grand Prix, but big economic impact expected

This week’s Formula One Las Vegas Grand Prix may have a smaller economic impact than 2023’s highly anticipated inaugural race, but officials say the weekend still promises to be a major fiscal win for the valley.

Last year’s race, won by Dutch star Max Verstappen, generated a net economic impact of $1.5 billion, making it the most lucrative event in the city’s history, according to Jeremy Aguero, a principal analyst withthe financial consulting firm Applied Analysis.

Aguero doesn’t have an estimate of what Saturday’s race and weekend events might generate, but he said it will be in the hundreds of millions of dollars and likely will be the second-largest event of the year in Las Vegas, trailing only February’s Super Bowl 58 at Allegiant Stadium. That event generated a net economic impact of $1 billion, Aguero told the Las Vegas Convention and Visitors Authority board earlier this year.

“It’s going to be significant, and it’s going to be one of the largest events Southern Nevada has in the calendar year 2024,” Aguero said. “Other communities would certainly want to have events at that level of impact. … Whether that’s $400 million, $600 million, or $800 million, it’s too early to be able to tell.”

Less infrastructure work

Part of the lowered expectations for economic impact can be attributed to the lack of roadwork and construction this year. Last year, the 3.8-mile resort corridor circuit had to be repaved to Formula One race standards and a pit building had to be constructed. The paving work cost about $50 million, and the construction of the pit building cost around $260 million, on top of the $240 million spent to acquire the land in 2022.

“The economic impact is certainly going to be lower than it was a year ago, but that has a lot to do with the capital construction associated with the project being substantially less,” Aguero said. “We are now benefiting from all of the capital construction that took place last year.”

Reduced demand expected

While overall demand is expected to be lower than the inaugural event, some 90,000 to 100,000 tickets were made available for the various spectator and hospitality areas around the circuit.

Convention authority President and CEO Steve Hill said he expects those tickets will sell out. Still, with ticket prices lower this year to drive more sales following a dip in demand, it would be hard to live up to the ticket sales impact of 2023’s race.

“Year one is kind of a double-edged sword,” Hill said. “On one end you’ve got this huge demand, everybody wants to be at this inaugural race and it should have been — it was an experience that is going to be hard to replicate. When you get to year two, the demand for the race isn’t the same, and that’s just not here in Las Vegas, that’s in every place that they’ve (F1) opened a new race.”

Las Vegas Grand Prix CEO Renee Wilm said earlier this year that ticket demand started off softer than in 2023. Now, with race weekend approaching, Wilm said she has started to see a steady increase in ticket interest.

“I think it has really followed a trend of what we anticipated, which is Vegas being a last-minute market, last-minute purchases just in live entertainment generally this year, so we’ve seen a really terrific increase in web traffic and also in conversion rates,” Wilm told the Las Vegas Review-Journal. “I think we’re really happy with the demand we’re seeing, and we’re looking forward to a crowded race.”

Cheaper ticket offerings

F1 put single-day tickets on sale last month for multiple general admission and grandstand areas starting at $99. The lowest-priced section, the Flamingo general admission zone, sold out in a week. The Heineken general admission three-day tickets, Flamingo general admission three-day tickets and Sphere Zone three-day tickets also have sold out.

A discounted three-day ticket, covering Thursday’s and Friday’s practices and events in addition to Saturday night’s race, was put on sale, tied to F1 star Lewis Hamilton’s number. Fans can nab a weekend ticket in the West Harmon zone at 44 percent off, with those tickets starting at $672, before taxes and fees.

“We’ve been looking to employ the learnings both from year one, but also just the feedback throughout year two as well, so that we can reach as many fans as possible during race weekend,” Wilm said. “And really spread out the ability to come see the race, in real life on track.”

Demand may not be as high as last year, but the level of local disruption in setting up the race was not as great this time around, so the situation is reaching an equilibrium of sorts, “where it starts to make more sense for everybody involved,” Hill said.

Learning from last year

Lessons learned from last year’s race and the massive amount of work necessary to turn city streets into an F1 track are making this year’s lead-up smoother. Formula One worked to improve its communication with residents and the resort corridor, integrating downtown this year with a music festival and developing a more detailed race setup and teardown schedule publicized well in advance with a dedicated website, allowing motorists to plan their travels accordingly.

“They have been tremendously more efficient this year, and I think you have to give a lot of credit to the county and public works. They have been incredible, too,” Aguero said. “The way they coordinated this, the lessons that have been learned, and you’ve got to give a bunch of credit to the resort partners, in terms of coordinating staffing.”

The lessons learned last year that are being implemented this year are mainly around logistics, Hill said. The entire circuit did not need to be repaved this year, and the controversial Flamingo Road bridge over Koval Lane was scaled down from four to two lanes this year, after complaints and lawsuits filed by neighboring businesses.

“Boy, does that make a difference at that intersection,” Hill said. “It cleans up a lot of the congestion and difficulty for businesses in that area. The method that we’ve gone through putting lights up and now barricades up has been much easier to plan, because there is not a lot of construction going on while we are erecting the circuit itself.”

Despite the scaled-down version of the temporary overpass, businesses in the area say they are still seeing disruptions.

The level of business for Stage Door Casino, Battista’s Hole in the Wall and Jay’s Market is down over pre-bridge customer counts and revenue, according to Lisa Mayo-DeRiso, who represents the business owners.

“Locals and anyone who accesses these businesses by car are avoiding the area,” she said. “Jay’s Market access is still difficult and confusing for tourists.”

East of the bridge and just north of the intersection of Flamingo and Paradise roads, Ferraro’s Ristorante is seeing better business than it did in 2023 but worse than in 2022, with fewer reservations than before the lane closures and F1 traffic disruptions, according to Mayo-DeRiso.

Raiders part of weekend

The Raiders will play a home game during Las Vegas Grand Prix weekend this year, something that didn’t take place last year.

On Sunday, Nov. 24, the afternoon following the grand prix, the Raiders will host the Denver Broncos at Allegiant Stadium. The game could help the south Strip benefit from the weekend. Because the south Strip is outside the race’s footprint, MGM Resorts International last year noted soft business during grand prix week.

The hope is that the Raiders game will help boost occupancy at properties near Allegiant Stadium, such as Mandalay Bay, Luxor and Excalibur.

“In this case, one plus one equals three,” Aguero said. “I think it’s going to be one of the best-attended games the Raiders have put on (this season). I think having other things to do in the market is going to be good for the 150,000 hotel rooms.”

Leveraging events

Based on past weekends with multiple events, such as the Raiders, Golden Knights and NASCAR, the grand prix and a Raiders game also may see a leveraging of events, increasing the average daily room rate and visitor spend, Hill said.

“I don’t think there’s any doubt that it’s still going to be a substantial event for us, even if the event does substantially less than it did last year,” Aguero said. “It’s still going to be one of the largest events we have in Southern Nevada. The crowd is going to be big, but it’s not going to be as big and prices are still going to be high, but not as high.”

F1 championships at stake

The race will have F1 championship implications. Max Verstappen, racing under the flag of the Netherlands, could clinch his fourth straight driver championship. Ferrari, McLaren and Red Bull are still in the running for the constructors championship team title.

“We have been so excited to see the elevated level of competitions this year,” Wilm said. “The number of different drivers who were on the podium in the last six months has been terrific.”

She added that Verstappen could fight to win his championship and celebrate in Las Vegas.

“And where is there a better place to celebrate and have a party than in the entertainment capital of the world?” Wilm said. “We are very excited to see what turns out on track, and if Max does take the championship, then he’ll have a pretty terrific celebration waiting for him.”

Contact Mick Akers at makers@reviewjournal.com or 702-387-2920. Follow @mickakers on X.