Published June 10, 2009

Slow first corner for F1 hospitality sales

Many companies cut budgets or stay away but some are coming back now

By NISHA RAMCHANDANI

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(SINGAPORE) Corporate hospitality sales for the 2009 Formula One (F1) Singapore Grand Prix have been slower this year, although the recent pick-up in market sentiment is driving more companies to sign on the dotted line.

Close to the action: At present, almost 61 per cent of corporate hospitality suites and the Paddock Club (above) have been taken up

'Clients are booking their requirements later this year as they are reviewing their hospitality budgets on a quarterly basis,' said Darren Chen, sales director of race organiser Singapore GP (SGP).

However, SGP has noticed a significant increase in the number of new contracts being concluded over the past few weeks, he added.

With this year's entertainment budgets paling in comparison to last year's, companies have had to carefully weigh which corporate hospitality events make their must-do list.

'There's a need to be more fiscally responsible this year. Given that market conditions are choppy, we've had to think long and hard about where we allocate our budget,' revealed Desmond Ong, managing partner at Eversheds LLP (Singapore).

The other big - and likely harder - decision to make is who makes the guest list.

Dutch bank ING, which hosted some 1,000 guests at the inaugural Singapore Grand Prix, is clearly looking at a more selective outing to the race this year, following a government bail-out, a 40 per cent cut in its global F1 sponsorship spending and the decision to bow out as Renault team sponsor when its contract expires post-2009.

ING will be using some of the tickets received as a corporate sponsor to host some 60-70 guests at the Paddock Club in Singapore and may also purchase a small number of grandstand seats, said Jeremy Scoones, ING's F1 events and hospitality manager.

But 'it won't be anything like last year', Mr Scoones said.

At present, close to 61 per cent of corporate hospitality suites and the Paddock Club have been taken up. Four thousand Paddock Club tickets and 160 corporate hospitality suites have been released so far. Some 20 suites at Turn 23 are currently on hold and will be built subject to demand.

Having anticipated a 'challenging year' against the backdrop of the current economic climate, SGP rolled out a new, lower-priced corporate hospitality option earlier this year - the Green Room at Turn 3 - which has gone down well thanks to its $3,388 price tag. Last year, the least expensive suite option was the Stamford Club Suite at $3,500.

Turn 3 has sold out quickly, prompting SGP to introduce new Green Room suites at the Pit and Stamford grandstands, which brings the total seating capacity of the various Green Room suites to 650.

Meanwhile, those from the corporate sector who are set to be at the race-track again this year include the Noble Group and Standard Chartered.

'Given our long-term business in Singapore, we continue to support local events such as Formula One. We believe it is important to participate in community activities,' said a spokesperson for Noble.

At the same time, there are also those that have decided to give the 2009 race a miss.

BT understands that OCBC, which bought Paddock Club tickets last year, will not be purchasing a corporate hospitality suite this year, while Swiss watchmaker Audemars Piguet has decided to forego the race too. Last year, it entertained some of its local and international VIPs in a corporate suite.

To drum up additional sales, SGP has been successfully courting some new clients - such as Eversheds - as well as proactively marketing the race through overseas roadshows in Malaysia, Mumbai, Hong Kong and Dubai.

'This is the one world-class event that we have. We feel it's worth supporting and we want to be a part of it,' emphasised Mr Ong, adding that the event is a platform to both reward its staff and entertain its clients.