JEDDAH: Saudi Arabia is accelerating its push to diversify its economy by turning to major international events such as Formula 1, as the Kingdom uses global motorsports to support its non-oil goals. 

Since hosting its first Grand Prix in 2021, the Kingdom has funneled more than $6 billion into its sports industry, part of a broader plan to boost tourism, create jobs, and raise non-oil activities to 52 percent of gross domestic product — a 20 percent jump since the launch of Vision 2030.

With plans underway to move the race to Qiddiya City between 2027 and 2029, the Kingdom is deepening its investment in the sport as part of a broader strategy to stimulate economic activity and position itself as a global hub for elite sports and entertainment.

High-profile events such as the Formula 1 Grand Prix in Jeddah exemplify how international sporting platforms are being used to stimulate tourism and highlight the Kingdom’s economic transformation.

Tamer Al-Sayed, chief financial officer at the Future Investment Initiative Institute, told Arab News that Formula 1 was never just about cars on a track. “It was a high-velocity statement. A signal to the world that Saudi Arabia is playing a new game — and playing to win,” he said.

Formula 1 has experienced a significant rise in popularity, with its global fan base reaching 826.5 million and viewership climbing to 1.6 billion in 2024, according to a recent report by PwC titled “Saudi Arabia’s motorsport ambition – Technology, investment and the future of racing.”

The global consultancy firm’s report noted that beyond Formula 1, motorsports are expanding into electric racing and other formats such as sports car and off-road competitions, driven by technological innovation and a worldwide push for sustainability.

Global popularity surged after Liberty Media’s 2017 acquisition of Formula 1 and the 2019 Drive to Survive series, which drew younger, more diverse audiences — doubling US viewership on ESPN and boosting sponsorship revenue to $632 million in 2024, according to PwC.

Economic impact

Flagship international events in Saudi Arabia, like the Formula 1 Grand Prix, are playing a pivotal role in driving tourism, stimulating local commerce, and showcasing the Kingdom’s growing appeal as a global destination.

According to PwC’s report, Saudi Arabia’s strategic investments in motorsports are positioning the Kingdom as a key player in the industry’s future.

The report said Saudi Arabia is aggressively cementing its role in motorsports’ future.

“The Kingdom has committed over $6 billion to its sports industry since 2021, fueling the development of world-class venues like the Jeddah Corniche Circuit and the upcoming Qiddiya Speed Park,” it added. 

This global expansion reflects the sport’s soaring popularity, especially among younger audiences and emerging markets. Saudi Arabia has managed to secure a long-term position in that landscape.

Yaseen Ghulam, associate professor of economics and director of research at Al-Yamamah University

However, the report emphasized that the success of a modern motorsport circuit relies not only on financial investment but also on innovation in fan engagement, race operations, and digital broadcasting to ensure long-term success.

With the Kingdom and the wider region increasing their investment in motorsports, new opportunities for economic growth and innovation are unfolding.

“As Saudi Arabia and the broader MENA region invest in motorsports and advanced racing technologies, the opportunity to commercialize and expand these innovations into other industries grows exponentially,” the PwC’s report said.

Al-Sayed noted that the economic ripple effects of events like Formula 1 have moved beyond anecdotal observations and are now supported by measurable data.

“In pure numbers: Since the first Saudi Grand Prix in 2021, tourism linked to the event has driven six-figure visitor volumes annually. Hotels hit peak occupancy. Flights sell out. Local businesses — from luxury brands to food trucks — ride that wave. These aren’t soft indicators; they’re measurable economic inputs,” he added.

More importantly, Al-Sayed said, this is not a one-off surge but rather a case study in how a flagship event can anchor a broader sector.

“Entertainment and tourism — both once peripheral — are now pushing serious weight in the non-oil GDP mix. You can see the reflection in the Ministry of Tourism’s own targets: 150 million annual visitors by 2030, with sports and cultural events as core levers,” he added.

As for the event’s impact on employment, the chief officer said that it extends beyond temporary jobs, highlighting the emergence of an entire ecosystem encompassing event production, hospitality, and logistics, as well as digital media, security, and sponsorship management.

“Each Grand Prix fuels demand across this chain, and each year the local capability strengthens. So yes, F1 was expensive. But so was missing out on the future,” he said.

Al-Sayed expressed confidence that in a decade, the question will not be why Saudi Arabia invested heavily in sports and entertainment, but rather how it anticipated the trend ahead of the rest of the world.

Yaseen Ghulam, associate professor of economics and director of research at Al-Yamamah University in Riyadh, said that Formula 1 is more than just a sport — it serves as a global platform for economic influence and visibility.

“The Las Vegas Grand Prix generated over $1.2 billion in economic activity, with racegoers spending nearly three times more than average tourists,” he said, noting that similar benefits are beginning to emerge in Saudi Arabia.

He also mentioned that hotel prices in Jeddah during the 2021 Formula 1 race exceeded $450 per night, reflecting high demand and a significant impact on the local tourism and hospitality sectors.

“This global expansion reflects the sport’s soaring popularity, especially among younger audiences and emerging markets. Saudi Arabia has managed to secure a long-term position in that landscape,” Ghulam added.

The associate professor went on to say that global sports events, such as Formula 1 or the Olympics, bring pride, increased productivity, and deliver higher well-being to nations through buzz, branding, and business potential.

“However, economic analysis of the costs and benefits, as well as financial risks, of hosting F1 is often overlooked. Saudi Arabia has been hosting F1 events exceptionally well since 2021,” he said.

From Jeddah to Qiddiya

The Qiddiya megaproject in Riyadh, announced in March 2024, will feature one of the world’s most innovative motorsport tracks, with the configurable Speed Park Track located at the heart of Qiddiya City, positioning the Kingdom as a global racing destination.

Al-Sayed called Jeddah the proof of concept and Qiddiya the blueprint for Saudi Arabia’s motorsports strategy.

He elaborated further on the success of the Jeddah circuit, noting: “When we launched the Jeddah circuit, the global motorsports community raised its eyebrows — and then had to admit it delivered. The fastest street circuit in F1, with a breathtaking Red Sea backdrop, timed perfectly with the Kingdom’s rising international profile.”

Al-Sayed called Qiddiya a masterstroke — a vision beyond a venue — designed to place Formula 1 at its core while driving growth in infrastructure, real estate, tourism, and creative industries. 

“It is one of those projects where the economic spillover is the point,” he said.

Echoing Al-Sayed’s remarks, Ghulam noted that when Qiddiya hosts its first Saudi Grand Prix — possibly in 2029 — it will undoubtedly make waves, following the strong precedent set by Jeddah.

“It would not be surprising if Saudi Arabia opted to hold two races in the near future in accordance with Saudi Vision 2030, since F1 now hosts three races in the US – Miami, Austin, and Vegas,” Ghulam concluded.