The 2008 Grand Prix return in Singapore, after nearly 30 years of inactivity, has boosted tourism and the economy in the city-state. After stopping in 1974 due to people's complaints and concerns about traffic jams, societal noise and subsequent incidents in the 1972 and 1973 races, the Singapore government decided to co-finance the return of the race with the Singapore GP Pte Ltd, Singapore Tourism Board and Bernie Ecclestone.
With its massive return in September 2008, local hotels have received a lot of occupancy and have even experienced full bookings this season. Expectations that it will boost the tourism and hospitality industry in Singapore have proven to be correct and accurate.
It is true that hotels in Singapore take pride in hosting this popular event every year. Christopher Khoo, MD from Master Consult Services, explained that the hotel industry will be the first to benefit from the F1 race in Singapore. The rooms will be fully booked and prices will be kept high. Due to the large number of people arriving and with rooms that are fully occupied, other tourists may go even further as they take the rooms to neighboring countries, like Malaysia, just to watch the race.
Professor Prem Shamdasani of the National University of Singapore Business School said that organizing events such as the Formula One race is very expensive. In order for Singapore to keep up with the costs, a cost-sharing approach was recommended. A strong public-private partnership can help ensure that this event is well prepared and well planned. Consequently, the government imposed a special tax on all hotels.
The Minister of State for Trade and Industry, Mr. Eswaran, explained that a special tax of no more than 30% will be imposed on hotel revenues for a period of seven days during this season in order to help the government settle the costs of hosting the race. This special tax was expected to raise about $ 15 million to $ 20 million a year.
It was clear that not all workers in the industry were happy with the special tax that the government imposed on this particular season. With this special tax, hotels have recognized that price increases are the possible solution to keep pace with new regulations. On the other hand, the government has assured the hotel industry that it will give consideration to hotels. They recognize the need for companies and businesses to reap profits, but it is important not to forget their fair share in the nation.
Minister Eswaran explained that they are only asking 30% in order to give hotels an opportunity to take advantage of their sales and maintain their stake. Hotels near the racetrack and offer the best racing offer like that established in Marina Bay, you will pay 30% in full while those hotels in further places, pay less.
Experts say it is expected that the number of tourists will reach 35,000 people annually to attend this event. This external influx will always necessitate higher demand for accommodations and will drive higher prices for hotels and flights. A positive transformation of the Singaporean economy is expected with the revival of the F1 race. The tax, although somewhat heavy, on commercial industries will contribute to promoting the economic recovery of the city-states.