Sport Tourism

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A matter of days after Bahrain's contract with Formula One was renewed, it was confirmed that Abu Dhabi signed a seven-year contract to host its own race beginning in 2009.

At a signing ceremony in the Emirates Palace, the Crown Prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan, spoke of the significance of the deal for the emirate: "A Formula One Grand Prix is one of the world's most prestigious sporting events ... and is unrivalled in terms of continuous global resonance. That is why this new partnership is such an exciting one for Abu Dhabi and the entire UAE."

The deal has the potential to bring substantial economic benefits to the city. The usual annual fee for hosting a Grand Prix event is between $15m and $22m. Abu Dhabi, however, believes that the initial capital outlay will be repaid by the potential economic impact of the event. Sheikh Mohammed said of the Grand Prix, "For Abu Dhabi, and indeed the whole of the UAE, the opportunities that are presented by increased international attention and connectivity will deliver very real macroeconomic benefits." Indeed, Formula One is big business. The Bahrain Grand Prix generated $324m direct income for the businesses of the kingdom in 2006, which constituted almost 3% of GDP and created 400 full time jobs.

The event in Abu Dhabi will be held at a new track being built by the local real estate developers Aldar Properties. Already under construction, the circuit is part of the wider development of Yas Island, east of the city centre. This natural island will also be home to the first Ferrari World theme park as well as a number of high-end resorts and golf courses. The development of Yas Island will cost $40bn with the first phase of development expected to be complete by 2008 and a final completion date of 2014.

A significant component of this strategy for developing the profile and exposure of Abu Dhabi is producing eye-catching sporting events. The Abu Dhabi Tourism Authority (ADTA) sees this as crucial in attracting more visitors to the emirate. According to the Director General of the ADTA, Mubarak al-Muhairi, recent success in hosting regional and international events has emboldened the emirate to further develop this strategy. Al Muhairi said, "The huge response by tourists and visitors to these sports events has prompted the ADTA to focus on sports events as a means to promoting tourism growth in the emirate. We have realised that Abu Dhabi enjoys massive potential on sports tourism."

Indeed, in the last month alone, Abu Dhabi has hosted the Gulf Cup football tournament, the Abu Dhabi Golf Championships and the Formula One festival. The Golf Championships, with a total prize money of $2m, brought 23,000 spectators to the emirate exceeding the target of 20,000 that the organisers had set. This also represented a 30% increase on the figures for the inaugural event in 2006. It is expected that such visitors will have a relatively high spend per head bringing in significant revenue. Moreover, as with Meetings, Incentives, Conventions, Exhibitions (MICE) tourists drawn to the emirate by the new exhibition centre, the challenge for Abu Dhabi is to extend the length of stay of these sports tourists beyond the duration of the event. Abu Dhabi will also undoubtedly place a significant emphasis on stimulating return visits using sporting events as an opportunity to showcase the emirate.

Indeed, it appears that the significance of the Formula One Grand Prix goes well beyond the direct revenue of the event itself. Such an attraction gives the emirate global visibility and will be a key component of its marketing strategy. The Grand Prix, along with the other sporting events already hosted by Abu Dhabi, may well go some way to meeting the ADTA's target of attracting over 3m tourists a year by 2015.

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