Hosting a prestigious sporting event like the Olympics or the World Cup should typically result in a multitude of economic benefits for the host country in terms of investment in infrastructure, job creation for the local economy and of course, tourism.
The Beijing Olympics in August brought in 6.5 million tourists, including 382,000 from abroad, according to official statistics. And the last World Cup back in 2006 saw approximately 2 million visitors pour into Germany, spending roughly $766 million during the month-long soccer fest.
While the Formula One series is certainly not at the scale of the Olympics or World Cup, it is an elite sporting event that ranks up there with yachting's Americas Cup and the dressage enthusiast's FEI World Cup. All three are upscale events catering to the uber rich. The F1 series though has an extra plus -- Formula One is synonymous with high finance.
And considering how much a typical F1 car costs -- anywhere upwards of $10 million -- it's no wonder that most of the teams are sponsored by high-flying financial institutions like ING (Renault), Credit Suisse (BMW) and Santander (McLaren). Well, once high-flying financial institutions that is.
Still, with F1 budgets planned back last year, the debut of F1's first ever night street race in Singapore this coming weekend looks set to be a splashy and affluent affair.
Among the rich and powerful expected to be in attendance -- Lenovo's president and CEO William Amelio, Sony's chairman Howard Stringer and Royal Bank of Scotland CEO Sir Fred Goodwin -- just three among a plethora of millionaires and billionaires spending the weekend in Singapore.
But it's not just the rich and famous who are flocking to this city state.
"We are actually very happy with the response to this event ... we are getting about 45 percent of (ticket) sales from tourists. We've sold roughly 100,000 tickets so what it means is that some 45 to 50 thousand of that would be tourists," says Lim Neo Chian, deputy chairman and chief executive of the Singapore Tourism Board (STB).
Lim added that an estimated ten thousand attendees are senior corporate executives, who will be taking up seats in corporate hospitality suites. Lim is quite optimistic that the STB's target of S$100 million (US$70.5 million) in tourism receipts will be met over the three-day event.
However, hosting a F1 race doesn't necessarily bring in the dollars. It's costing Singapore an estimated S$150 million to host the race, of which the government is picking up 60 percent of the tab. Organizers expect the economic benefits and spillovers from F1 in the form of ticket revenues, merchandizing and sponsorship to name a few, to help defray expenditure.
But that's not always the case. Just ask Melbourne.
Melbourne has hosted the Australian Grand Prix for the past 14 years. Last year, the race lost A$41.3 million (US$38.8 million). The local government council (which hosts the race) had enough of the event and even went as far as asking the Victoria state government to scrap it.
However, others are of a different view. Gregory Hywood, CEO of Tourism Victoria, believes major events such as the Australian Grand Prix, "bring in about A$1 billion (a year) and have intangible benefits that bring in tourists and business investment."
Ron Walker, chairman of the Grand Prix Australia adds that, "Each year the race attracts around one hundred thousand visitors to the city of Melbourne, it's an integral part of the global F1 racing meet."
Malaysia certainly believes so. It's hosted the Malaysian Grand Prix since 1999, and plans to continue doing so. F1 attracts roughly 125,000 spectators to the country annually.
That's probably why F1 has countries lining up to host future races with Abu Dhabi hosting a race next year and India and South Korea in 2010. Moscow and Cape Town are also in the queue to become F1 venues.
And with each F1 race watched by an estimated 350 million people in 200 countries, the publicity will be enormous for Singapore, which is trying to build an image as a vibrant cosmopolitan city.
Organizers here have high hopes for the outcome of a successful race.
"It's hard work", says Colin Syn, deputy chairman of organizer Singapore GP. "It's tremendous – there's such a big team of people involved ... everyone's rooting for it. I think we have a good start because people are for it and that's very important."
But with financial turmoil raging across global markets and decimating the bottom lines of banks -- one of the main sponsors of Formula One, enthusiasm might not be enough to ensure the success future races.