Las Vegas Grand Prix Economic Boost Debunked by Expert Analysis

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The once resplendent lights of Las Vegas dimmed slightly as new details surface about the economic impact of the first Formula 1 Las Vegas Grand Prix. The pioneering event, heralded by local marketing firm Applied Analysis hired by the Las Vegas Convention and Visitors Authority (LVCVA), allegedly provided a significant $1.5 billion surge to local tourism, according to reports on Tuesday’s gathering of the LVCVA’s board of directors. However, recent findings suggest a contrary narrative.

Championing a more conservative view, Berry College Professor of Economics Frank Stephenson, an established authority on the ties between hotel profits and sporting events, released an independent analysis critically examining the optimistic figures of Applied Analysis.

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The day of the race observed an increase of $60-$70 million in hotel revenues, Stephenson reported. Nonetheless, the rest of the week experienced a significant falloff. An uncharacteristically quiet pre-race period saw hotel occupancy plummeting by 20% on Monday, Tuesday, and Wednesday nights. Thursday and Friday followed suit with a 10% year-over-year drop. Saturday, the day of the race, experienced an upturn, but only a meager 3% increase year-over-year, leading to an overall occupancy of 80%.

Stephenson expressed his reservations to the Center Square, stating, “the week leading up to it, the numbers were really anemic. I guess some people showed up for the race itself but whatever modest gains there were, were almost certainly offset by the whole week leading up to it.” Stephenson further affirms that despite any real revenue boosts Las Vegas may have witnessed, these gains streamed to the hotel’s corporate owners and failed to stay within city limits to be recirculated as economic impact reports often declare.

Applied Analysis primarily caters to groups aiming to promote subsidies for Las Vegas events and professional sports like the Grand Prix, Allegiant Stadium, and a proposed stadium housing the Oakland Athletics, according to The Center Square. The organization was recently quoted remarking, “economists have pushed back strongly on marketing economic impact reports that are part of a cottage industry used to secure public funding for professional sports stadiums as an attempt to push public funding with false numbers.”

This back-and-forth between economic figures comes after Clark County already funneled $40 million into hosting the F1 event. The County too produced its own report, corroborating the contentious $1.5 billion figure provided by Applied Analysis, thus pouring more fuel on the debate surrounding the seeming profitability of such an undertaking. In this contest between grand spectacles and grounded statistics, it remains to be seen who comes out on top.

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Melinda Cochrane is a poet, teacher and fiction author. She is also the editor and publisher of The Inspired Heart, a collection of international writers. Melinda also runs a publishing company, Melinda Cochrane International books for aspiring writers, based out Montreal, Quebec. Her publication credits include: The art of poetic inquiry, (Backalong Books), a novella, Desperate Freedom, (Brian Wrixon Books Canada), and 2 collections of poetry; The Man Who Stole Father’s Boat, (Backalong Books), and She’s an Island Poet, Desperate Freedom was on the bestseller's list for one week, and The Man Who Stole Father’s Boat is one of hope and encouragement for all those living in the social welfare system. She’s been published in online magazines such as, (regular writer for) ‘Life as a Human’, and Shannon Grissom’s magazine.