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VivianB’s other folly: F1

In Economy, Tourism on 20/09/2015 at 11:20 am

Dr Chee rightly put down the guy who sneered at the elderly poor (Pioneer Package was PM’s way of saying sorry?) by reminding everyone who was responsible for overspending on the Kiddie Games by S$300m. (Btw, we never got to find out about the truth about the food poisoning of volunteers as promised did we?)

But lest we forgot, F1 was VivuanB’s idea too.

And it’s been another folly. Worse, S’pore is still paying the costs of having F1.

Singapore pays US$65m (S$83.3m) a year to bring F1 here. Only Malaysia and Abu Dhabi pay more.(BBC report).

Monaco is the only place that doesn’t pay.

So our “iconic” race is not cheap. Remember this when you read how much money F1 brings here.

The cost for organizing each race is approximately S$150 million dollars, with the government paying about 60% of the costs. And the fee is 55.6% of the cost). The government claims that each race generates about S$150 million in tourism receipts. So sounds like breakeven to me only, without taking into account the inconvenience to commuters and the lost sales at Suntec*.

https://atans1.wordpress.com/2014/10/05/f1-only-two-other-countries-pay-higher-fees/

And

It’s not as though there is a huge savings gap. In fact it’s more expensive to stage a street race, even without taking account of the economic losses.

However, the annual running costs of a street race are greater than those of one on a permanent circuit: temporary grandstands need to be built and the roads need to be upgraded to F1’s high safety standards. The biggest single expense for the operators is staffing (c£10m), followed by rental of grandstands (c£8m) and construction of safety barriers and fencing (c£5m). 

In total, the annual operating cost of an F1 street race is in the region of £36m. Then comes the hosting fee, which is paid to the F1 rights holder. The average hosting fee came to £17m in 2011 but the sting in the tail of the contracts is that the price accelerates by as much as 10 per cent every year. Most new F1 race contracts are for ten years, so by the end of the agreement the annual fee comes to around £40m thanks to the escalator clause in the contract. That means that over the ten-year duration the bill for hosting fees totals an estimated £272m (see below) with the cost of running the races coming to £360m. That makes a total over ten years of more than £600m.

With annual running costs that are far lower than those for a street race, the total cost of building a Grand Prix circuit and hosting an F1 race over a ten-year period comes in at around £560m. But promoters need to dig deep to fund that initial track construction… http://www.babusinesslife.com/Ideas/Features/The-cost-of-hosting-a-Formula-1-Grand-Prix.html … how much the key elements of a brand new Grand Prix circuit are likely to cost… [£164m]

So the difference is spending S$80m more over 10 yrs to “save” on the cost of building a permanent track. Of course, I ‘m assuming the cost of the circuit land is zero or nominal. But this being S’pore where giving away the land for public housing would be “raiding the reserves” (Mah Bow Tan), this is a non-starter. Anyway the usual suspects would shout “corruption” even if the govt was willing to lease land at a nominal price.

So, the end result is that the “little people” who have to commute by way of public transport, get screwed, So waz new?

https://atans1.wordpress.com/2013/09/08/cheaper-to-build-f1-track/

And in a meritocracy, he’s still a minister? Can sneer at the elderly poor, overspend, miscalculate badly benefits and still be a minister? Why liddat PM?

Btw, the people who come for F1 https://atans1.wordpress.com/2013/09/21/msians-pinoys-indons-love-f1-spore/

*So how abt sharing the benefits with the losers?  Especially since F1 will bring S$1b “additional value-add” for economy, says Iswaran. (S’pore expects expenses to drop about 15% to 20%, according to the Ministry of Trade and Industry. The cost of the race is about $150 million, with the government co-funding 6o% of the amount, reminded S. Iswaran, “Singapore’s second trade minister, who’s responsible for developing the tourism industry”. What he didn’t say is that hotels have to pay a special levy of 30% on room rates during F1 period, if they are “track-side” hotels and 20% for the others. )

Compensate the retailers at Suntec City  and those who work in the city? Tax rebates for them? If no such sharing of the benefits, then it’s some private profits, and big state windfall (via taxes and other levies), and public inconvenience and some private losses. Readers might also like to know that it costs at least US$120m to build a dedicated F1 circuit (excluding, it seems, land costs), so by inconveniencing commuters and some retailers, the government is passing on the one-off cost of building a F1 track to some S’poreans annually. Whoever said there isn’t a free lunch? More reason to offer compensation.  

https://atans1.wordpress.com/2012/10/01/f1-sharing-the-1bn-in-value-add-with-the-losers/

PRCs spend more here than in HK

In Casinos, China, Economy, Hong Kong, Tourism on 27/06/2015 at 4:30 am

Casinos

F1- Only two other countries pay higher fees

In Economy, Tourism on 05/10/2014 at 6:07 pm

Singapore pays US$65m (S$83.3m) a year to bring F1 here. Only Malaysia and Abu Dhabi pay more.(BBC report).

Monaco is the only place that doesn’t pay.

So our “iconic” race is not cheap. Remember this when you read how much money F1 brings here.

The cost for organizing each race is approximately S$150 million dollars, with the government paying about 60% of the costs. And the fee is 55.6% of the cost). The government claims that each race generates about S$150 million in tourism receipts. So sounds like breakeven to me only, without taking into account the inconvenience to commuters and the lost sales at Suntec.

Worse, ticket sales are falling. More than 84,450 tickets were sold for the 2014 Formula 1 Singapore Grand Prix, slightly lower than last year but the third highest attendance since the inaugural race in 2008.Back in 2008, 100,000 tickets were snapped up as Singapore successfully pulled off the world’s first F1 night race on a street circuit.

MH370 fallout hurts us too

In Economy, Indonesia, Malaysia, Tourism on 06/04/2014 at 4:49 am

The incompetency of the M’sian defence officials (no explanation yet on why aircraft were not scrambled when aircraft veered off course) and there are allegations that the veering off course was not detected forb hours), and the perceived failures may affect us.

Demand for inbound tours featuring Singapore and Malaysia could see some ripple effect, following the backlash that Malaysia has received in China …

SA Tours’ manager for inbound tours, Dan Tan, said that he has seen a 40 per cent decrease in demand for such combined packages. Mr Tan said that the bulk of the drop comes from Chinese tourists, as demand from tourists in other countries have held steady.

At this time of the year, SA Tours usually receives enquiries from Chinese tourists for large tour groups of 80 to 100 people for the mid-year holiday period. However, for now, the company has received enquiries only from small groups of three to five people.

Mr Tan said that while business has already declined because of a weaker global economy, he believes the MH370 incident is another reason behind the drop in numbers for combined inbound tours. “There’s a lot of debate online between Malaysians and the Chinese, and the Chinese are saying they won’t come to Malaysia again,” said Mr Tan.

To assure tourists, Golden Travel Services’ managing director, Cindy Chng, has told them that travelling to Malaysia is still safe, that the incident “should have no linkage with the place itself” …  no cancellations thus far from Chinese tourists coming in July for combined tours … they have expressed some concerns. “They may not have a good impression of Malaysia and don’t want to travel there,” …

She added that she is open to making changes for tourists if they want to forgo the Malaysia leg of the tour. [Package with Bali leh]

While CTC Travel does not have combined tour packages … said that he expects such sentiments to cause a drop in Chinese tourists coming to Singapore. “We’re pretty close neighbours, and people tend to link us together,” …does not think the impact will be huge … CTC … not been affected much as the company does not have many Chinese customers and focuses more on outbound travel.

Timesworld Travel & Educational Tours and Chan Brothers said that the incident has not impacted combined inbound tours, possibly because they run more corporate and educational tours which could be less affected.

But Timesworld … said that they could face a 10 to 20 per cent drop in demand for the peak season. People are still unsure and are waiting for others to take the first step, she said.

Tour operators say that the number of Chinese travellers on combined tours in the upcoming months will depend on how the situation is handled and resolved …

(BT 5 April)

LKY answered Ngiam Tong Dow’s F1 question

In Public Administration, Tourism on 06/10/2013 at 5:18 am

Ngiam Tong Dow said: “My favourite topic — I’m on public record — is Formula 1 (F1). We’re paying the Englishmen to stage the F1 night race here. Why should we use taxpayers’ money to pay for these races? I have asked this question publicly, but the MOF has never addressed it.”

Maybe MOF didn’t, but LKY did juz before F1 came to S’pore, LKY said, when it was first suggested to him yrs ago, he didn’t believe it as something that could contribute to S’pore’s development. He was only convinced about its development potential, after F1 became massively popular and had already gone to KL. By then, Berniewas tua kee, with every aspiring global city wanting to stage a race, and many of them had cash pouring out of their ears.

BTW, the S’pore organisers were very clear that they couldn’t make money without govt help.

Taz history. There is an alternative on the horizon that S’pore should be trying to take advantage of:

… all-electric grand prix called Formula E, which gets under way in London in September 2014. Other races are planned in Bangkok, Beijing, Berlin, Buenos Aires, Los Angeles, Miami, Monaco, Putrajaya, Rio de Janeiro and Rome.

Some big names have already signed up to support Formula E, including DHL, a logistics giant, and Qualcomm, an American technology group. But the commercial potential, and the ability to draw a large audience, will need to be proved before Formula E becomes a technological race. Then, provided the teams can come up with better batteries, electric motors and power electronics, electric racing cars really could, one day, mount a serious challenge to the petrol-heads’ F1 cars.

http://www.economist.com/blogs/economist-explains/2013/09/economist-explains-14

In addition, to not paying much (maybe very little), seeing Formula E is a new brand, as the circuit here slows the F1 cars down considerably, a Formula E race here would be gd for Formula E to camouflage its main weakness: slower cars. The twisting, turning race would be juz as exciting for racing fans. Heck, we might even get it for free.

The Marina Bay Street Circuit is the second slowest 23-turn circuit on the calendar after Monaco, with an average speed of 172kph. Approximately 46% of the lap is taken at full throttle, compared with over 75% at Monza.

The twisting layout is hard on the brakes, while the gearboxes also take a beating, with around 80 gear changes per lap.

Drivers will complete 61 laps in the race – in 30C heat and 70% humidity – which takes a little under two hours to complete.

A change to the circuit this year is at turn 10 – dubbed the Singapore Sling. The original layout, a three-turn chicane, was seen as dangerous by drivers with Kimi Raikkonen crashing there in 2008 and Lewis Hamilton describing it as ‘the worst corner in Formula 1′.

This year, it has been turned into a single-apex left-hand bend and, without the chicane, lap times are expected to be lower. BBC report

https://atans1.wordpress.com/2013/09/22/formula-e-the-new-f1-why-cant-msm-report-f1-event-like-this/

Since we staged the first Kiddie Games, overspending in the process, why don’t we join this circuit? True in addition to F1, it would inconvenient us for another few days in a yr, but what the heck. Let’s try it. BTW Bernie is pretty relaxed about Formula E competing with F1, so he shouldn’t object.

Format of race: Each of the ten teams will have two drivers. But unlike F1, each driver will have two cars. Hence 40 SRT-01Es in all are being built by Spark Racing Technologies, a French firm, in collaboration with Renault and a number of other motorsports companies, including McLaren, Michelin and Williams. With present battery technology the cars will run out of juice after about 25 minutes in a race that is supposed to last around an hour. So each driver must make at least two pit-stops to change cars—sprinting 100 metres between each car in the old Le Mans style. As an added twist, one of the cars will be a sprint version capable of greater acceleration while the other will have more endurance. Flat out, the SRT-01Es will reach a top speed of around 225kph (140mph), whereas F1 cars top 300kph on some circuits. But on the short, twisting closed-off city streets which will be used by the electric racers, they will be spectacularly quick. And because of the instant torque provided by electric motors, they can accelerate to 100kph in just three seconds. Nor will they be quiet, because of the sound made by the cars’ tyres, electric motors and aerodynamics at speed.

F1: Sharing the $1bn in value add with the losers?

In Economy, Media, Tourism on 01/10/2012 at 5:46 am

Singaporeans must accept F1 race as necessary event: MTI (The Trade and Industry Ministry says the community must accept the Singapore Formula One race as a necessary event in Singapore. This is because the race has reaped benefits such as enhancing Singapore’s image and bringing in more tourism receipts.)

And

Teo Ser Luck: Singaporeans must accept F1 as a necessary event

So how abt sharing the benefits with the losers?  Especially since F1 will bring S$1b “additional value-add” for economy, says Iswaran. (S’pore expects expenses to drop about 15% to 20%, according to the Ministry of Trade and Industry. The cost of the race is about $150 million, with the government co-funding 6o% of the amount, reminded S. Iswaran, “Singapore’s second trade minister, who’s responsible for developing the tourism industry”. What he didn’t say is that hotels have to pay a special levy of 30% on room rates during F1 period, if they are “track-side” hotels and 20% for the others. )

Compensate the retailers at Suntec City  and those who work in the city? Tax rebates for them? If no such sharing of the benefits, then it’s some private profits, and big state windfall (via taxes and other levies), and public inconvenience and some private losses. Readers might also like to know that it costs at least US$120m to build a dedicated F1 circuit (excluding, it seems, land costs), so by inconveniencing commuters and some retailers, the government is passing on the one-off cost of building a F1 track to some S’poreans annually. Whoever said there isn’t a free lunch? More reason to offer compensation.  

BTW, before the race, our constructive, nation-building media gave the impression that a deal-breaker was S’pore’s demand that it be charged a nominal fee for the race (Monaco pays nothing because until S’pore’s F1, it was the only F1 race on public roads.) Well it seems, S’pore was told to f***off and it got buggered: “Ecclestone refused to confirm the cost of the new contract, although he did hint that negotiators for the Singapore race had failed to extract a Monaco-style race fee exemption. It is thought that they argued for one, pointing out how successful the race has been for sponsors. http://www.telegraph.co.uk/sport/motorsport/formulaone/9560875/Singapore-Grand-Prix-secures-its-place-on-F1-circuit-after-organisers-agree-a-new-five-year-contract.html

Mr Iswaran only said there has been “a discount in franchise fees for the new contract”: whatever happened to the deal-breaker? The silence from our media on the issue is deafening.

Seems that Bernie said that the Thais willing to stage a F1 night race in Bangkok if he pulled out of S’pore.

Related post: https://atans1.wordpress.com/2011/09/25/is-f1-worth-it-updated-with-2011-estimate-of-additional-tourism-revenue/ BTW not seen any details of estimated 2012 revenues despite all the talk of benefits.

STB & MDA missed a trick here

In Tourism on 15/08/2012 at 6:52 am

One of the reasons given for the staging of the Kiddie Games (Youth Olympic Games) and the annual inconvenience that is F1, is that it promotes S’pore as a place to visit; even if it costs the taxpayer serious money. F1 loses money for us. No wonder, S’pore is still trying to get the fees lowered if it agrees to stage race permanently. Minister’s comments last yr and earlier this yr, the govmin denied it had agreed terms.

Well if promotion is what we are after, how come the various govmin agencies and in particular the STB and the Media Development Authority division that promotes films missed getting “Supercapitalist” made here. A just released independent movie, “Supercapitalist”, has HK as a backdrop.  It opened last “Friday in New York, and later in Washington, San Francisco and Los Angeles, and is also available on video on demand on cable and on iTunes,” reports NYT’s DealBook.

Or they didn’t even know this movie was being made? Or they knew, but tot the subsidies it would need to come here were “peanuts” to the subsidies shelled out for the Kiddie Games and F1. Or see unknown producers and directors no ak?

 

“F” word banned by PUB?

In Economy, Infrastructure, Media, Political governance, Tourism, Wit on 27/12/2011 at 6:03 am

Trust a former President’s Scholar to come up with the solution to prevent floods in Singapore. VivianB got PUB to rename “flooding” as “ponding”. Why didn’t Yaacob do this instead of calling a flood a 50-yr event. Well there were two 50-year events in less than two months last year.

Seriously, I don’t think it was VivianB’s idea. Likely to be the new CEO of PUB that is behind the renaming. He after all blames us for the floods, saying S’poreans took things for granted*. I say to him, “Don’t try to deflect blame like SMRT’s CEO who told us to guard the trains when there was a security break-in. PUB did not do it’s job.

Ain’t this renaming juz daft and misleading? PUB said of the heavy rain last Friday “there was no flooding at Orchard Road … However, water ponded at the open area of Liat Towers, the underpass between Lucky Plaza and Ngee Ann City, and the basement of Lucky Plaza due to the sustained heavy downpour”.

Sorry PUB, these places were flooded. The ponds were at least ankle deep, at Starbucks, customers walked on chairs to get out, and shops had to close**.

I’m glad that MediaCorp didn’t buy into this euphemism. They called these “flash floods”, as they used to. As to ST, they tried to be truthful, while keeping VivianB and PUB onside. No wonder SPH is such a good dividend payer, while unlisted MediaCorp continues to struggle financially.

If VivianB and PUB were doing their very best to ensure that tourists are not scared off (Remember that the retail trade is tourist dependent to keep profitable and that the overall economy is heading for a slowdown, if not a recession), they failed as far as Malaysia is concerned.  Bernama reported:

Flash Floods In Several Parts Of Singapore Including Orchard Road

Flash floods hits several areas of Singapore including the republic’s most famous shopping alley, Orchard Road, following prolonged heavy rain in the southern and central parts of the city state Friday …

Nice try guys. But better for the economy, retailers and S’pore’s image if the PUB improved its “ponding” prevention measures, not try to play word games.

—-

*”But maybe we have also become victims of own success. Because we have been so successful, alleviating floods, that we have not seen a flood situation for a long time. So when it came, it did catch Singaporeans by surprise.”  Channel News Asia

**How Today reported the situation

The underpass between Lucky Plaza and Ngee Ann City remained closed yesterday evening. Some shop owners at the ground floor of Lucky Plaza said that water levels were ankle-high, but the situation this time was better than during previous floods.

At retail store Giordano, store in-charge Lyn Molino estimated losses of up to S$7,000 and said that customers were not only deterred by the wet floors but also by the stench from yesterday’s floodwaters. “This is supposed to be a good opportunity for us to have extra earnings but it has all been affected,” she said.

The floodwaters also washed out business at Starbucks and fast-food restaurant Wendy’s, among other establishments, at Liat Towers. Wendy’s manager (marketing and branding) Seng Woon Fa estimated losses of about 60 per cent of the day’s earnings. “We are now just busy cleaning up and hope to resume business as soon as possible … we are still checking if any equipment is spoiled,” he said.

F1: Does the government know?

In Economy, Tourism on 22/10/2011 at 7:06 am

Earlier this year News Corporation, a media group, and Exor, the family investment firm of the Agnelli family, which also owns Ferrari, announced their interest in making a joint bid for Formula One. (News Corp is no longer interested given its problems in the UK.)

They briefed that the sport was losing its ground. Viewership is falling, though the business rakes in ever-growing piles of cash from doing deals with governments to host Grand Prix races. Mr Ecclestone (the current supremo) has no successor trained to take on the difficult task of balancing the competing needs of teams, sponsors, broadcasters and circuits.

If viewership is falling, and if there are succession problems, waz the point of staging rsace, unless the cost of staging one comes down?

F1: S’pore will not rush into contract decision: Iswaran

In Economy, Tourism on 26/09/2011 at 11:42 am

Mr Iswaran, junior trade minister said: “We have engaged independent consultants, because we want to make sure that going forward, we have a clear idea of what is the value proposition of the F1 for Singapore…from the tourism point of view, from an economic spin-off point of view and a social point of view.

‘My own sense is that we need to have some kind of closure on this, certainly before next year’s race. But I’m hoping we can find a mutually beneficial agreement sooner rather than later.”

This was only reported in ST Online. ST carried an article on its front page praising the economics and other aspects of the race. Headline read,  “Stunning S’pore race a big winner” .

Is F1 worth it? Updated with 2011 estimate of additional tourism revenue

In Economy, Tourism on 25/09/2011 at 9:48 am
Year Cost (SGD M) Additional TourismRevenue(SGD M) Profit/ Loss(SGD M) Margin over Costs (%)
2008 150 168 18 12
2009 150 93 -57 -38
2010 150 160 10 6.67
2011 150 100 (Estimate) -50 – 33.33

Totals                      600                     521                      -79                             -52.67

(Click the headline to see full table if you are reading from the Home page.)

Doesn’t look gd does it? Looks bad if you ask me. Revenue (estimated albeit) drastically down this year.

[Update on 26 September 2011 7.15am: ST headline “Stunning S’pore race a big winner” and reporting that “race has retained its lustre and won over new fans”, is at variance with the estimated drop in revenue (see table) that SunT reported yesterday.]

Note: As much as 60% of the S$150m a year is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors here,

Any wonder why “intangible rewards” matter. http://www.bbc.co.uk/news/business-15015158 

But shouldn’t intagible costs be taken into consideration, which makes things worse. Danny the SDP Bear’s pals may not be wrong.

(Cost and revenue numbers taken from BBC link above, except for 2011 revenue, taken from ST. Note ST quotes a revenue figure of S$98m for 2009.)

Is F1 worth it?

In Economy, Tourism on 24/09/2011 at 10:16 am
Year Cost (SGD M) Additional TourismRevenue(SGD M) Profit/ Loss(SGD M) Margin over Costs (%)
2008 150 168 18 12
2009 150 93 -57 -38.00%
2010 150 160 10 6.67
Totals 450 421 -29 -19.33

(Click the headline to see full table if you are reading from the Home page.) (Cost and revenue numbers taken from BBC link below.) 

Note: As much as 60% of the S$150m a year is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors here,

Any wonder why “intangible rewards” matter. http://www.bbc.co.uk/news/business-15015158 

But shouldn’t intagible costs be taken into consideration.

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