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Shop at Jay’s Market at 190 East Flamingo Road t the Koval Lane intersection, east of the Strip.
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By Alan Snel, LVSportsBiz.com Publisher-Writer
LAS VEGAS, Nevada — Economists say the Las Vegas Grand Prix misled the public on the F1 race’s true economic value to the Las Vegas market by looking at gross spending connected to the November street race instead of many factors that go into the event’s actual economic net gain.
The Las Vegas Grand Prix relied on a commissioned report by Las Vegas consultant Applied Analysis and boasted the race delivered an economic impact of $934 million, an unverified number that gives only a slanted, partial picture because many businesses losses were not factored into the number, the economists said. In 2023, F1 gave varying economic numbers and even Clark County and MGM Resorts International provided various economic figures at a March 2024 F1 race debriefing report meeting held by Clark County.
Applied Analysis is also a business consultant for the Las Vegas Convention and Visitors Authority (LVCVA), which has two sponsorship deals with Formula 1 and is a primary booster of the F1 event. That raises the issue of whether the company can be in an impartial position to provide neutral data on the race. Jeremy Aguero, a close friend of LVCVA CEO Steve Hill, is a principal, or owner, of Applied Analysis, a data-research company.
The Aguero-led Applied Analysis was also the consultant for the Las Vegas Stadium Board, chaired by Hill. Applied Analysis dropped out Oct. 1, 2023 because Aguero began working for the Athletics as a consultant and the A’s appear before the stadium board. (Thursday is the stadium board’s next meeting.) After Aguero’s final stadium board meeting as consultant, he and Hill embraced in 2023.
Economist JC Bradbury, Kennesaw State University professor economics, said it appears Aguero looks at the amount of spending and does not analyze losses and displacement to provide a net gain to the community.
“From what I can tell he simply has some method that counts up an amount of spending in the area, nearly all of which does not represent net new economic activity as a result of the race. Decades of economics research has found the economic impact of mega-events, like this race, to be quite small, and in some cases the net effect is negative,” Bradbury said.
Economist Frank Stephenson, the Henry Gund Professor of Economics and chair of the Department of Accounting, Economics, and Finance at Berry College in Georgia, said event economic studies often look at general spending without analyzing many factors that go into determining the final net gain.
LVSportsBiz.com contacted Aguero about Bradbury’s statement via email and did not hear back from him.
While the Las Vegas Grand Prix heralded the economic spending it said is related to its race, it made no mention that four businesses filed lawsuits against Formula 1 and Clark County, claiming the race caused them to lose millions of dollars in revenue. The lawsuits also said the county improperly fast-tracked the F1 race’s applications and permit process.
“F1 knowingly misled the public on the economic gain for the 2024 Las Vegaas Grand Prix,” said public relations specialist Lisa Mayo-DeRiso, who is representing the businesses that filed legal action against F1 and the county.
“Their figure does not include revenue losses by businesses, the value of lost time for workers travelling to and from work, or the value of lost wages,” Mayo-DeRiso said.
LVSportsBiz.com contacted Las Vegas Grand Prix spokesperson Lisa Nelson-Kraft, but did not hear back.
The controversial race with its 3.8-mile route in the Strip corridor is scheduled to start at 8 PM Nov. 22 this year instead of the 10 PM starts at the first two Las Vegas Grand Prix races in 2023 and 2024. Mayo-DeRiso said that means two restaurants she represents, Battista’s Hole-in-the-Wall and Ferraro’s Ristorante, will have to close that day and lose thousands of dollars in revenues.
Formula 1 reported attendance of more than 300,000 in 2024, though a Clark County Public Works permit shows F1 anticipated 102,800 spectators for the Nov. 20-24 event.
The 2023 race was a disaster for Clark County as the race promoter paved the 3.8 mile route, causing massive traffic jams and disrupting commerce in the Strip corridor like no other event in Las Vegas history. There was also no community outreach for the 2023 and it would have been wiser for Clark County to allow the first race in 2024 instead of 2023. But county commissioners appeared out of their league in understanding the scope of the race impacts and rubberstamped the event approvals.
In 2024, the Las Vegas Grand Prix tried to clean up the sour PR from Year 1 by staging a fanfest, reaching out to schools, giving away free tickets and closing roads and lanes for less periods of time. The grand prix’s 17-week road plan for staging the race event was submitted to Clark County May 1 but withheld from the public for months, violating open records laws.
Stephenson, the economist from Berry College in Georgia, looked at the 2023 race’s impacts and told LVSportsBiz.com that he made these findings.
“My data cover the ’23 F1 race but not the ’24 F1 race. I looked at a window starting six days before the race and ending three days after the race. As for my results:”
— Hotel occupancy rate: down between 8 and 18 percentage points per night
— Number of rooms rented: down 12k-30k per night
— Hotel room rates: up more than $250/night for race night and two nights before; up about $100/night for the third night before the race and the night after the race
— Hotel revenue: up sharply for race night and the two preceding nights; some nights with smaller gains and some nights (four, five, and six before the race and nights two and three after the race) down considerably; total effect ~$70 million increase in hotel revenue over the 10-day window