High costs could undo night race

SINGAPORE — The just-concluded night race has become such a big draw for the world’s top industry captains that it presents an opportunity for top global companies to snag multiple deals in one setting.

For Paul Hembery, motorsports director of Formula 1 tyre provider Pirelli, the Singapore Airlines Singapore Grand Prix is where the French company links up with institutional investors and partners from as far away as New York.

With key corporate executives swooping down into the city-state, it also paved the way for Branded Asia to host what its chief executive Jasper Donat calls “the biggest sports conference in Asia”.

But Donat warned the high cost of hospitality might just be Singapore’s undoing in the long term. It is an issue, he told TODAY, authorities have to ponder over, if the Republic is to remain an attractive destination as regional competitors are catching up.

“I think Singapore Inc has an issue at the moment with the prices of its hotel and food and beverage, because it is making itself too expensive,” said Donat. “A bottle of wine in a restaurant here is now S$50, and a bottle of beer costs S$18. That’s crazy. You’ve got some of the most expensive alcohol in the world.

“Singapore Inc must rethink what happens when people are here, because pretty soon they won’t be able to justify the trip here during the F1 week or for other events because they are spending a lot of money to get here.”

He noted that while hotel prices spiked during the Singapore Grand Prix, alcohol costs were the same year round as this is the effect of the high tax rates.

Since becoming the sole tyre provider for all F1 teams in 2010, the Pirelli brand has made significant inroads in Asia.

But with Singapore establishing itself with Monaco as one of two races on the annual F1 calendar that is well attended by corporate high flyers, it is a business hub not only for the Italian company’s Asian partners, but their global clients too.

“We have important business associates who fly from all over the world for the race,” Hembery told TODAY over the weekend.

“We always have a very strong presence here of institutional investors who buy shares, partners who sell our tyres, all the way down to retail customers.”

Those from key markets like Europe and United States often have an entourage of 40 to 50 people.

“We use the Singapore Grand Prix to conclude business negotiations because it is a good showpiece and a good way for people to understand why Pirelli is involved in Formula 1 and why it is important to us as a business,” said Hembery.

The Singapore Grand Prix’s vision is to build corporate events around it and for Branded Asia, said Donat, it has worked well in the organising Sports Matters. The assembly of corporate bigwigs here for the race weekend helped make last year’s conference a success, and this year’s edition at the Marina Bay Sands was sold out.

Said the Englishman: “Singapore is a long way from Europe and the US and to ask people to come here to spend S$400 or S$500 a night is a big ask. When we decided to launch Sports Matters, the reason we chose F1 week was because a lot of people are pre-disposed to be here during that time and were going to spend that kind of money anyway.

“So, I guess the phrase is ‘you go fishing where the fishes swim’.”