The second Formula 1 Grand Prix in Las Vegas has come and gone. But key questions remain: Will it continue for another seven years, like originally planned? Is the economic impact worth the disruption? And do local businesses and residents want that as much as tourism boosters?
Formula 1 and local consulting firm Applied Analysis recently reported that the overall economic impact for 2024’s race was $934 million. That’s lower than 2023's $1.5 billion.
The Las Vegas Convention and Visitors Authority said in a statement that the drop in revenue could be attributed to “the construction of F1’s pit building (on the corner of Harmon Ave and Koval Ln), which was approximately $500 million. There’s also heightened interest around a first-time event, so a slight drop-off from year one to year two was anticipated.”
Alan Snel, founder and writer of sports website LV SportsBiz.Com, said the true economic impact of 2024’s Formula 1 race is likely lower than the figures reported by F1.
“I spoke with some of the top economists across the country, and they say a more important and accurate number is the net gain to a market,” Snel said. “The F1 folks and their consultant don't really share information about all the financial downsides that need to be factored in.”
Local businesses, such as Battista’s Hole In The Wall Italian Restaurant and Jay’s Market, claim they faced significant monetary losses in 2023 due to that year’s race — some in the millions.
Business owners attributed many of those losses to race-related construction, event setup, and restricted access to their businesses.
In 2024, these businesses — along with a couple others — filed lawsuits against Clark County and Formula 1, seeking reimbursement for their financial losses.
Lisa Mayo DeRiso, a consultant representing the businesses, said 2024’s race was not much different and that they still lost money.
“It’s a lot of money that — in normal circumstances, if you were a small business — it would probably put you out of business,” DeRiso said.
She added that Jay’s Market, for example, was “still obstructed on the entire south side,” due to a traffic bridge constructed again on the intersection of Harmon Ave and Koval Ln. It was reduced to two lanes in 2024 instead of its previous four.
However, DeRiso said, it still “did not improve any of the business.”
Lori Nelson-Kraft, senior vice president of corporate affairs for the Las Vegas Formula One Grand Prix, said they are always “actively taking feedback, and adjusting plans.”
In 2024, setup time for the race was reduced to three months instead of the previous nine, and construction mostly took place overnight.
Additionally, Formula One has taken steps to foster a better connection with locals.
“We heard locals wanted more accessibility to the race,” Nelson-Kraft said.
“Last year, you saw it in the form of a free fan experience,” she continued. “This year, $50 tickets are available, along with a lot more single-day tickets. We were also able to move up the race two hours earlier, which is a benefit from an enormous amount of feedback from the community.”
Marta Soligo, assistant professor of hospitality at UNLV, said striking the right balance is key in determining how major events affect local communities.
“The most successful destinations that host these kinds of events are the ones that have the community at the table. Communication and community awareness are also key strategies,” Soligo said.
The LVCVA and Formula One are seeking a seven-year extension of the Las Vegas Grand Prix, pending approval from Clark County.
In support of that effort, the LVCVA said Formula One “continues to have a tremendous impact on the city and generates the largest economic impact of any recurring event in Clark County.”
Meanwhile, Las Vegas Grand Prix President Emily Prazer recently said it’s not impossible for Formula One to reach a settlement with the businesses involved in the lawsuits.
Nevada Public Radio reached out to Clark County for comment, but they declined, citing pending litigation.
Guests: Lori Nelson, senior vice president of corporate affairs, Formula 1 Las Vegas Grand Prix; Lisa Mayo DeRiso, consultant, Mayo & Associates; Marta Soligo, assistant professor of hospitality, UNLV; Alan Snel, founder, LVSportsBiz.com
