Will this year’s Macau GP pay off?

Although the event has been downsized, experts say it still has potential.  

Macau.- The 67th Macau Grand Prix scheduled for November 19 – 22 will be one of the few GP races in what has been an atypical year for sports.

In Macau, the fixture is part of the city’s tradition and the excitement around the event is already palpable. But with difficulties in attracting foreign drivers amid pandemic travel restrictions, will the decision to hold the event pay off?

Glenn McCartney, professor and associate dean at the University of Macau (UM) Faculty of Business Administration told Focus GN Asia Pacific the event is of major importance for the city.

He said: “It’s been held since 1954 so it is very much part of Macao’s DNA and destination event budget. The GP is an important part of the event economy and social engagement.

“Many suppliers and businesses benefit, neighbourhoods will have public displays of race cars and bikes. There are also some local racers and bikers that take part, and the visual preparations begin to take place in October.” 

However, for the first time since 1982, the F3 championship will be replaced with an F4 competition, a category usually reserved for junior drivers. The Motorcycle Grand Prix could also be cancelled owing to a lack of international drivers.

The presence of the few international drivers that do arrive may not be welcomed by residents, even after testing negative for Covid-19.

There has been a tepid response to the event’s sports betting potential, with operators seeing little increase in interest.

Sources at Unibet told Focus GN Asia Pacific: “The Macau GP is in Formula 4, which is not something we are currently offering. Due to the rescheduled calendar, there are fewer races this year but in a much shorter period, which has seen the interest lowered to more normal levels.”  

The sports betting operator said this has been a trend in other events. A source said: “In other motorsports like Rally or Speedway, we are also not seeing any unexpected changes of interest due to Covid-19, while some tournaments, of course, are affected.” 

Is there anything in it for casinos? 

The Macau Grand Prix Organizing Committee (MGPOC) has said the event will include a total of 6-7 races: Formula Macau Grand Prix, Macau GT Cup, Macau Guia Race, Macau Touring Car Cup and Greater Bay Area GT Cup. 

The Sports Bureau of Macau has said the event could be the first edition without a title sponsor, a position normally occupied by casino operators such as Suncity Group.  

However, casinos participate in the event in many ways, not just as part of the scenery around the track. McCartney said their sponsorship activities range from individual races to cars and bikes and hospitality.

“This also includes some major junkets and suppliers to the casinos as well, and can be part of the corporate social responsibility actions” he said. 

The GP doesn’t usually offer much in terms of boosting gaming revenues but McCartney said there’s still work to be done to explore how it can best be used to increase visitor stays, and visitor spending on shopping and gaming.  

He said: “October, with the Chinese mid-Autumn festival bank holiday, has commonly greater gaming revenues than November. So, there is some anecdotal evidence that certain events in the annual calendar could attract more gaming revenues.” 

Hotels on the Macau Peninsula get involved in the event. The UM professor said: “In hotels used by the race teams and those doing the GP packages, there will be some level of GP bunting, and perhaps a car or two from a famous car brand.” 

A key piece in a diversified economy 

In non-pandemic times, cars tear through streets surrounding the largest casinos in the city by the Pearl River in front of spectators, but this year there will be a smaller crowd at the event, and a reduced budget of MOP250 million (US$31.3 million). 

McCartney said: “The reported budget this year is down only US$2.5 million due to Covid-19. But that is still less than 8 per cent reduction, so it remains a considerable spend for a reduced GP event.”

Even so, it is expected that visitation will be reduced compared to 2019, while safety measures will continue, with teams arriving from elsewhere having to quarantine for 14 days. The UM professor said: “Unless government policy changes, it’s less likely to be a GP that features beyond Macao and China.  

“Hong Kong is a major market for the GP. But again, the restrictions due to Covid-19 may mean this market is also excluded. A social distancing regime on the spectator stands will mean fewer tickets are needed and issued.” 

Having to downsize the event has also been something of a blow for the government, which recently announced a strategy to diversify Macau’s economy, with sports playing a major role.

McCartney said: “Since casino liberalisation two decades ago, diversification has been slow and gaming revenues remain as a significant part of the economy.

“One issue for a strong city brand image is to have a common message throughout the events, so this still needs some work and public and private collaboration with the integrated resort properties. Destination branding is a key area to direct economic diversification.”   

But it’s not all bad news. The professor believes the forced downtime is an opportunity to revise the city’s tourism strategy and event calendar. This could lead to “an examination in areas such as city brand image, incorporating more research on aims, expectations and outcomes of each.” 

The pandemic has certainly changed the event this year but the GP is in constant progress. There have even been talks of moving the circuit to the Cotai Strip area.

McCartney believes more research is needed to look at “several cost and benefit analysis factors, such as logistics as well as reinforcing the marketing and branding of The Cotai Strip, and getting visitors to stay longer and spend more there.”