Disappointing Number of Interstate and Overseas Visitors
Economic benefits to a State from a major event depend on additional expenditure from overseas and interstate visitors. Revenue from Victorian residents, who constituted over 78% of attendance at the 1996 race, is simply money that would otherwise have been spent here on alternative events or products, or invested.

The Industry Commission predicted that, because "many of the interstate visitors to the Adelaide Grand Prix were from Victoria", Victoria could expect "a lower proportion of interstate visitors than when the event was held in Adelaide".

Predictions by Tourism Victoria that the event would attract 35,000 interstate and overseas visitors were not fulfilled in 1996. 31,000 interstate and overseas residents were claimed to have "attended the event", but in fact patron surveys found only 5,178 overseas and 11,738 interstate visitors who came to Melbourne specifically for the 1996 Grand Prix. The patron surveys indicated that the Grand Prix in Melbourne attracted 13,000 fewer visitor nights than the Adelaide Grand Prix in 1992.

The results of a survey of hotels conducted by the hotel industry confirm that visitors numbers were disappointing. The survey found that:

• only 61% of hotels were full on the Thursday-Saturday nights;
• the percentage of hotels full dropped to 44% on the Sunday night, indicating that many visitors left once the race was over.

Top of this page

Grand Prix Disrupts Regular Tourism to Melbourne
Use of the peak visitor month of March (the Moomba period) negates most of the benefits of the Grand Prix It is a strategy that increases the danger of the "avoidance factor" or "displacement factor" when people stay away during major events in anticipation of crowds, inflated prices and accommodation problems, or when demand simply exceeds supply and displaces regular inbound tourism.

In the case of the 1984 Los Angeles Games US$163 million in avoidance costs were deducted from the calculated economic impact.

Statistics collected routinely by the Australian Bureau of Statistics on tourist accommodation (cat. no. 8635.2) appear to confirm that the Grand Prix was no bonanza, even though the event is supposed to have attracted an additional 57,000 hotel/motel visitor or guest nights. Statistical analysis of the data finds no statistically discernible effect on the ABS figures that can be attributed to the Grand Prix. It has to be concluded that the GP had a negligible net effect on the number of visitors to Melbourne.

Table 1: Guest Arrival Numbers: Melbourne Hotels/Motels/Guest Houses

Month	1995	1996	1997	Increase 1995 - 97	% Change 1995 - 96	% Change 1995 - 97
March	244,200	248,800	236,100	-8,100	1.9	-3.3
February	216,900	235,600	235,800	18,900	8.6	8.7
January	191,000	204,300	210,100	19,100	7.0	10.0

Table 2: Guest Night Numbers: Melbourne Hotels/Motels/Guest Houses

Month	1995	1996	1997	Increase 1995 - 97	% Change 1995 - 96	% Change 1995 - 97
March	506,100	517,500	553,500	47,400	2.3	9.4
February	458,300	478,700	506,700	48,400	4.5	10.4
January	448,800	489,400	492,300	43,500	9.1	9.7

Top of this page

No Evidence of Benefits from International Television Exposure and Marketing of Grand Prix Races
South Australian Government forecasts that the GP would put South Australia "firmly on the map for international tourists" were not fulfilled. Despite the fact that the Grand Prix theme was used extensively in the promotion of South Australia and Adelaide as a tourist destination:

• the State's share of both international and interstate visitors fell over the Grand Prix decade;
• since 1985 Adelaide's rate of growth in international visitor nights has been lower than any other State capital including cool climate Hobart (Bureau of Tourism Research, Tourism and the Economy, No. 1, 1995).

The Victorian Government's evaluation of the 1996 Grand Prix commented "There is still no firm data available from the tourism research bodies on the impact of international exposure of Australian cities from major sporting events on induced tourism." (p.45) and estimated only $6 million worth of induced tourism from the Grand Prix. This is a poor return on the licence and franchise fees of $15-20 million paid to Bernie Ecclestone and the $9 million promotion budget of the Grand Prix Corporation. The Access Economics report commissioned by the Australian Tourism Commission estimated that every dollar spent on tourist promotion should earn Australia $8-10.7 (Australian Financial Review, 6/3/97).

Grand Prix television exposure is likely to be ineffective. It is not targeted to any particular audience and focuses on the track and sponsors' names, not the city. As Alan Attwood, writing from New York, (The Age, 11/3/96) noted "You had to know your local geography to make sense of the landmarks as the cars whizzed by."

Views of the city skyline are limited. None serve to distinguish it from any other city. There is virtually no promotional material on Melbourne. Viewers in smaller non-English speaking countries, including Sweden and Greece, receive the commentary in English.

Top of this page

If the Formula One Grand Prix is a Showcase Event Which Will Put the Host Centre on the Map ...

• Why is Melbourne joining a group of venues largely consisting of resorts and little known towns like Nevers, Imola and Aida?
• Why does the Montreal event, an hour from the USA, attract only 20,000 international visitors?
• Why can so few viewers name the venue of the 16 national GP races held each year?
• Why do national tourist guidebooks often fail to list centres where the race is held (e.g. Imola) or, where they do refer to the venue, fail to make any reference to the event?
• Why should a study of travel agent catalogues featuring 145 European cities fail to mention six centres which have hosted GP races over the past 20 years, i.e. Nevers, Monza, Spa, Zandvort, Imola, Jerez?
• Why should a study of major events in Barcelona make no reference to the Grand Prix?

How many Australians are attracted to countries overseas by seeing formula one cars racing on similar looking tracks in Portugal, England, France or South America?

Top of this page

Use of Parkland for Motor Racing Will Not Enhance Melbourne's Reputation as a Tourist Destination
Melbourne's city parks and gardens are recognised by the tourist industry as one of its major attractions. The use of one of the city's finer inner city public parks as a race track, and the resultant impact on other nearby parks such as the Royal Botanic Gardens and Fawkner Park, is not necessarily good for Melbourne's international image or its attractiveness to its mainstream tourist market.

The US Park Service in Washington DC refused a permit for motor racing in West Potomac Park in 1993 on the grounds that "We don't think park roads are appropriate for car racing" (Washington Post, 8/4/95).

Top of this page

  Search our site     Back to our Factsheets