F1's $500 million bet on Las Vegas hits some bumps ahead of the Grand Prix

• Formula One has made a deal with Clark County to host its Grand Prix in Las Vegas through 2032.
• F1's owner is expected to spend about $500 million turning the Strip into a racing circuit.

When Formula 1 announced its return to Las Vegas last March, the move was hailed as the "perfect marriage of speed and glamour" by Greg Maffei, CEO of Liberty Media, which owns F1.

The decision was a sort of homecoming for the racing group, as the last time F1 hosted a race in Las Vegas was in 1982.

"The potential of Formula 1 has been well demonstrated over the last several seasons and the Las Vegas GP (Grand Prix) will only take it to the next level," Maffei said.

But ahead of the big race on November 16, F1 has seen a few obstacles on the path to bring the Grand Prix to a city that accommodates well over 30 million visitors a year: Locals have expressed frustrations about disruptive construction, re-sale ticket prices have fallen as buzz about the race simmers, and it appears organizers initially didn't account for the weather conditions in Vegas at night when the race will take place.

"We're definitely facing some new challenges which we've never had before, but I think it'll be spectacular," Ross Brawn, a former managing director of F1's Motorsports said in an interview with Talksport radio station.

A $500 million bet

Turning the Strip into a racing circuit has come with some hefty costs, mainly a $480 million paddock — a 300,000-square-foot structure that will serve as a pit stop for cars, 18,000 seats, and luxury hospitality suites.

Overall, F1 is expected to pay about $500 million for paddock construction and land acquisition, according to the Las Vegas Review-Journal.

It's all worth it in the long run, F1 executives and local leaders would say, because the racing event is projected to have an overall economic impact of $1.3 billion by the first race, citing a report from Applied Analysis research firm.

That's more than double what the same firm found would be the economic impact of the Super Bowl at the Allegian Stadium in Las Vegas next year, according to the Review-Journal.

Residents frustrated with construction

Sticking a racing circuit in one of the busiest cities in the US has challenges of its own, but F1 was also on a tight deadline after it announced it was coming to Nevada.

"This, we did in a year," Terry Miller, the project manager for the Las Vegas Grand Prix, told Sports Illustrated on building the track. "In May of 2022, we didn't have a site, we didn't have the property, we didn't have a design, we didn't have a contractor."

Miller added that shutting down the city to build the track was not an option, which meant his team had to do the roadwork in the early morning and create alternative routes for visitors and employees.

The construction has still caused frustrations among residents trying to get through their regular commute and tourists hoping to see some of the Strip's iconic sites.

"The Las Vegas Strip is almost unrecognisable today," Jennifer Gay, who runs VegasStarfish social media accounts to highlight tourism in Las Vegas, said in a TikTok that documents some of the Strip's changes due to the upcoming race.

Gay noted that popular attractions such as the Mirage Volcano are surrounded by fencing and that "mature trees" have been removed.

Some tourists have also been dismayed that the walkway in front of the Bellagio fountains was completely closed for construction.

A spokesperson for MGM Resorts did not respond to a request for comment sent during the weekend.

"Things are incredibly chaotic, but mixed with excited anticipation," Gay said in an email to Insider on Saturday.

Tickets and hotel prices fall

According to one estimate from CBS affiliate 8 News Now, hotel rates soared more than 300% last year for the weekend of the F1 race. And average ticket prices for grandstand seats were $2,000, TickPick, an online ticket marketplace, told CNN.

Now, ticket prices on the re-sell market have fallen as anticipation for the big race has "started to fizzle," TickPick CEO Brett Goldberg told CNN.

Prices for grandstand seats, for example, have dropped about 35%, from $1,645 to $1,060, in the past month.

Hotel rates also have cooled, although they are still higher than usual, 8 News Now found in an updated analysis. A room at the Bellagio during the 3-day weekend as of November 6 was $1,666 a night compared to $1,995 last year around the same time.

A source familiar with the Las Vegas Grand Prix told Insider that ticket prices have not changed from the organizers' end but could not speak on behalf of re-sellers like TickPick.

The source added that "tickets were and remain in high demand, so it would stand to reason that related economic prices like flights, hotel rooms, or private car hires would spike in price when tickets first went on sale and settle when supply of tickets decreases materially."

MGM Resorts CEO Bill Hornbuckle expressed optimism about the turnout for the Grand Prix in an earnings call on Wednesday, stating that the company has "sold over 10,000 tickets to F1."

"Our average rate is over $900 for the company. We're going to do over $60 million in incremental hotel revenue for the weekend," he said.

Wynn CEO Craig Billings similarly praised the event's impacts in an earnings call on Thursday, saying that "expectations for F1 haven't changed."

The desert is cold

In the winter, the Vegas desert can easily reach temperatures below 40 degrees Fahrenheit, potentially impacting tire pressure and the performance of the vehicles.

Ross Brawn, a former managing director of F1's Motorsports who also worked on the Las Vegas Grand Prix before leaving, told Talksport that the cold weather was something organizers initially overlooked.

"The one thing we hadn't considered initially, but the tire company have dealt with, is it gets very, very cold at night," Brawn told Talksport. "It can be really quite cold and of course getting the cars to work in those temperatures can be a challenge."

Brawn added that the tire companies have since adjusted for the weather conditions.