Malaysia will stop hosting Formula One race, but the (tourism) show must go on

A driver in action during an F1 race at Sepang International Circuit. Pic: angah316/Shutterstock

TWO days ago, Malaysia’s Tourism and Culture Minister Datuk Seri Nazri Aziz confirmed that Malaysia will stop hosting the Formula One (F1) Grand Prix race after the current contract expires in 2018.

The Malaysia Grand Prix is a round of the Formula One World Championship, and is held annually at the Sepang International Circuit. The event has brought into Malaysia some of the most prominent names in the sport including Sebastian Vettel, Michael Schumacher, and Fernando Alonso.

For the best of under two decades, the F1 season has been a revenue generator as it doesn’t merely encompass the race; a series of activities, shopping sales, road shows, a charity gala dinner, and public concerts are also common prior to and after the race. Fans also get the opportunity to meet and greet star racers.

However, Nazri said the hosting of the race was costly and has not brought necessary returns to the country. The decision was concurred by Youth and Sports Minister Khairy Jamaluddin, who had expressed last month his support to temporarily halt the hosting of the sporting event.

Nazri said, “F1 attendance is dropping and there is less attraction now. We are spending RM300 million (US$67 million) a year [for the race].”

Meanwhile Khairy said via Twitter that Malaysia began hosting the races in 1999, and back then, it was the first country outside of Japan to do so. He added that at present time, there are many venues: “There is no first-mover advantage; it’s no longer a novelty.”

He added: “F1 ticket sales declining, TV viewership down. Foreign visitors down b/c (because) can choose Singapore, China, Middle East. Returns are not as big.”

According to Channel News Asia, Malaysian officials have said that Sepang, which can accommodate 120,000 fans, drew just 45,000 to last month’s grand prix, and added that race-day TV ratings were also poor.

State oil and gas firm Petronas are the title sponsors for the F1 race in Sepang, and the company has been hit hard in recent times by the tumble in oil prices.

A report in Forbes said that F1′s chief executive Bernie Ecclestone helped put cities like Kuala Lumpur and Abu Dhabi on the map. “They were once seen as obscure destinations and were rarely mentioned in the news, let alone considered exotic tourist destinations. F1 changed all that,” the report stated.

Furthermore, in a 2008 survey, then Tourism Minister Datuk Seri Azalina Othman said that about 80 percent of international visitors approached for the study said they came to Malaysia solely for the F1 race.

However, the lack of the “novelty factor”, an economic slowdown, and an aging circuit could be some of the reasons that have contributed to a decline in ticket sales.

About a decade ago, Ecclestone criticized the tracks by comparing it to “an old house that needs a bit of redecorating”. He added, “It’s starting to get a little shabby and looks a bit tired. There is rubbish all over the place and it’s not really a good sign for Malaysia.”

Ten years on, Malaysia must move on from being heavily dependent on the races as a significant tourism booster. This sentiment is most certainly shared by some of Malaysia’s local racers.

Muzzamel Mazidee, founder of TGTR, a collective of people passionate about cars and driving, posted a statement on Facebook to express his disappointment about how the race has deviated from the objectives it first sought to achieve all those years ago.

“Sad to see after numerous attempts to make the facility better, Formula 1 has been a bore to some fans, making people attending for the free tickets or for the sake of being at a race which they have little to none knowledge about the sport just because they want to be seen.

Hope this will create an opportunity for other international racing series to add Sepang [to] their racing calendar. If not, make the circuit more accessible for trackdays and elevate the grassroot racing scene in Malaysia so we can develop more talents in the future.”

Malaysian racing driver Jazeman Jaafar said on Twitter that Malaysians have to “look beyond F1” as well as utilize the Sepang circuit for other top racing events while promoting current and emerging talents.

Local racing legend Alex Yoong also took to Twitter to voice his thoughts. He said, “When you have falling attendances and it’s no longer a marketing exercise, the costs involved to host the race does not make sense.”

He added that Malaysia needs a new plan if it wants to be a market leader of motorsports in the region.

Whether it’s the refurbishment of the Sepang circuit, the construction of new tracks, or increased support for young motorsport talents, Malaysia needs to start revving its engines if it doesn’t want to lose loyal motorsport followers in the region to flashier, more relevant markets.