Formula 1: The DRS of Asian Economy

Writer: Shaurya Taneja

Editor: Samarveer Singh

Introduction

This blog explores how Formula 1 races in the Middle East and Asia fuel economic growth through tourism, job creation, and global branding. It examines data from countries like the UAE, Saudi Arabia, and Singapore to show how motorsport has become a driver of revenue and regional identity.

The roar of V6 Hybrid engines, firecrackers and global spectators makes the city come alive for an entire weekend, this is due to the legacy of a 75-year-old motorsport, Formula 1. For many Asian countries from Saudi Arabia to Abu Dhabi to Singapore, this sport isn’t just a mere motorsport race, it is a strategically planned event where there is a lot riding on, relations, reputation, class and more importantly opportunities to earn massive revenues. Planning for a formula 1 race takes place months before the race happens, a lot goes into it, but if it plays out right, it generates high revenue, employment and tourism.

The Revenue Generation

In many Gulf states and Asian economies, dependence on commodity exports or low-value services is being challenged. Sporting events such as F1 fit neatly into plans to diversify, upgrade tourism, raise global branding and create jobs. The World Economic Forum predicts that the Middle East Sports economy is estimated to grow around 8.7% annually through 2026 which as compared to the global average of 3.3% is highly promising. In Saudi Arabia, the hosting of the F1 Saudi Arabia Grand Prix is embedded in the broader Vision 2030 agenda to transform the economy. At the same time, several Asian hosts such as Singapore and Malaysia view F1 as part of their tourism-and-services upgrades. All these countries know how F1 skyrockets city brand values.

The value for money spent starts coming in when the tourists come for the race weekend, this has a major ripple effect on the economy itself. For example, during the 2024 Yas Marina Grand Prix (Abu Dhabi), the data revealed from Visa showed a 34% net raise in international visitor transactions compared to the same week in the previous year.  Approximately 133,000 Visa Card Holders made transactions in the UAE during the Grand Prix with 62% of the tourists extending their stay or staying in other emirates. Sectors like travel services  surged by 68%, dining by 53% and retail by 17%. Other Asian countries showed a very similar pattern. A study of the Baku Grand Prix (Azerbaijan) by PwC found out that the first four races made approximately $506.3 million and created a huge number of jobs for accommodation, Food and Beverages, and transportation.

These staggering figures prove that high class visitors, ticket incomes, hotel and restaurants turnovers and higher retail sales, are all worth it even if the hosting fee or circuit cost is high. It goes without saying that hosting Formula 1 is expensive. Many Middle Eastern and Asian hosts pay annual hosting fees in the tens of millions of dollars, typically between $30 million and $60 million per race, in addition to additional expenses for operations, safety, and infrastructure. However, many governments view these expenditures as strategic investments rather than short-term profits when considering the enormous increases in tourism spending, longer hotel stays, and spillover into retail and services. The net value frequently develops over years through consistent visitor and business attraction, not just in immediate ticket-week earnings, especially for economies aiming for diversification and global branding.

The Tourism Aspect

Hosting a race brings in a large crowd, which also brings a huge number of tourists in the country who extend their stays, explore the city and promote the destination through social media and traditional media coverages. According to a meta-analysis of tourism employment, tourism growth in destination economies is strongly associated with job creation and higher-income subsectors (e.g., sports and recreation labour force).

In the Middle East, the broader travel & tourism sector is forecast to contribute $367 billion to regional GDP in 2025 and create 400,000 new jobs. A race-week serves to accelerate that trend by adding “premium tourism” and raising destination awareness globally. For example, visitors to Abu Dhabi during the race week came from 178 countries.

In Asia, research such as “International Tourism and Economic Growth” found tourism to be a positive driver of economic growth in ASEAN economies. F1 fits into that broader tourism strategy by bringing global attention, media exposure and high-spend travellers.

Employment and Local Impact

The employment effects of tourism and of major sporting events are well documented. A meta-study found the average effect of tourism on employment across 36 studies to be positive and statistically significant. The Bahrain Grand Prix alone manages to generate thousands of employment opportunities through event operations, hospitality and circuit-maintenance clusters. In Asia, hosting F1 spurs temporary jobs in logistics, event management, hospitality and security, and sometimes permanent roles in marketing, venue operations and tourism promotion. For instance, the UAE’s sport-tourism policy emphasises jobs in events and display industries. Thus, behind the glamour of pit-stops lies a workforce of hospitality, travel-services, retail, transport and specialized event-support personnel.

Infrastructure and Risk of Holding a Formula 1 Race

Hosting a formula 1 race can be very expensive, especially for countries like Azerbaijan and Singapore, since these countries use street circuits. Months before the race is scheduled the roads are closed off and a race circuit is built out of it. A lot of construction and repairs go around this. It becomes a logistical nightmare to host a race; hence a question comes to mind, “is it really worth it to host a race?”, the answer is not straightforward.

Academic and industry studies caution that the race weekend spike must translate into sustained activity beyond the event. For example, the PwC study in Azerbaijan noted that while early boosts were large, subsequent years did not always match the initial peak.

For Middle Eastern hosts, the challenge is converting race exposure into broader tourism packages, repeat visits and lifestyle infrastructure. Without that, the race may remain a flashy one‐week media moment rather than a transformative economic generator.

Sustainability and Future of F1 In The Region

While the economic returns of the Grand Prix are undoubtedly good in Asian and Middle Eastern countries, they are now also looking towards sustainable growth. The sport’s expansion into regions like Saudi Arabia, Qatar, and Singapore coincides with increasing global pressure for environmental responsibility. F1 has itself committed to the same by trying to achieve net-zero carbon emissions by 2030, pushing host nations to align their tourism and event infrastructure with cleaner technologies. For example, Singapore’s Marina Bay Street Circuit adopted energy-efficient lighting and hybrid generators in 2023, reducing race-week carbon emissions by 35%. Similarly, the Saudi Arabian Grand Prix now sources portions of its energy needs from renewable power, signaling a wider shift toward sustainable event management.

In fact, the new 2026 F1 regulations are going to introduce 100% sustainable fuels and a power unit split almost equally between internal combustion and electric power.

Conclusion

Above and beyond the track, Formula 1 has become an economic mover in the Middle East and Asia, fueling tourism, creating jobs, and amplifying global branding. The actual challenge is long-term sustainability of these benefits beyond race weekend. Policymakers should focus on attracting high-value, long-stay visitors; integrate the event into broader tourism experiences; and leverage the global spotlight to promote new sectors like hospitality, sports tech, and event management. Meanwhile, circuits must serve a long-term function in terms of concerts, expos, and local motorsport. This would guarantee continued economic use. As demonstrated by Azerbaijan's experience, open cost-benefit analyses are crucial to avoiding fiscal overreach and to ground mega-events in long-term planning rather than transient spectacle. Formula 1 can transcend its status as a transient race weekend when it is integrated into larger development strategies, such as Vision 2030 in Saudi Arabia or tourism-led upgrading in Asian city-states. Rather, it turns into a recurring platform for private investment, global branding, infrastructure reuse, and skill development. In this way, Formula One is not just imported entertainment but also a tool for policy: a fast-paced catalyst that allows cities to rethink their urban identities, diversify their economies, and communicate their aspirations to the world long after the chequered flag has fallen.