Mexico City — Welcome to La Estrategia del Día (The Daily Strategy), the number one News podcast in Mexico, Colombia and other Latin American countries, as per Chartable and Spotify charts.
In this special episode, we talk about what happened in 2020 with the cancelation of the Mexico City edition of the Formula One Grand Prix, and what its return in 2021 means for the economy, tourism and sanitary conditions amid the pandemic.
May 2020, the most critical moment of the pandemic. At the Autódromo Hermanos Rodriguez, the roar of an engine would not be heard for 15 months. The main straight of the track and the pit area became a temporary hospital to treat Covid-19 patients. It was no longer drivers walking around the paddock, but doctors looking to save lives.
Mexico City remained among the states with the highest number of contagions in the country and uncertainty grew around the viability of whether to hold the Mexico Formula One Grand Prix, one of the mass events that generates a significant economic impact for the country.
In the five years it has been held, the event has generated 30,000 jobs and an economic revenue of more than 39 billion pesos ($1.9 billion), a figure that exceeds that estimated in 2014, when the return of the race was announced after a 23-year absence.
The 2020 event aimed to break that record, but the pandemic clouded any ambition of the companies involved and of the government itself. It took 20 months before the green light was given to allow the return of large-scale events. Tourism Minister Miguel Torruco was finally able to pronounce this Wednesday, with excitement, estimates regarding the revival of tourism, one of the most important economic sectors for Mexico’s growth.
Since the end of October, a series of events are shaping up to be a decisive litmus test in terms of economic and tourism recovery, but also in questions of health, at a time when federal authorities are boasting that more than 80% of the population has been fully vaccinated.
The strategy was activated with the return of activities to mark the Day of the Dead celebration, which was attended by almost one million people. This was followed by a street show in Reforma, the capital’s financial district, in which Mexican Formula One driver Sergio ‘Checo’ Pérez warmed up the audience. The Mexico City Grand Prix, a three-day event, is next on the list.
Mexico City’s Tourism Secretary Paola Felix highlighted a difference this year: the aim was to seduce national and international tourists to stay at least two weeks in Mexico.
Mexico’s tourism GDP fell by 28.4% in 2020. In the second quarter alone, when the pandemic hit, it plunged 43%. As a result, the government and a group of private companies headed by CIE, the promoter of the event, are betting on Formula One as the main reactivator of the Mexican economy.
CIE has its own history. Now you will hear from Federico González Compeán, Formula One’s general manager for the company, who told Bloomberg Linea about the situation the company has been going through over the last year.
CIE is responsible for the rights to organize the race in Mexican territory, which for five consecutive years have earned it recognition from the International Automobile Federation, the FIA, as the ‘Best Promoter’ of the event in the annual F1 calendar.
But the pandemic struck at the heart of his business, due to the impossibility of organizing large-scale events, shows and concerts. Also due to the temporary suspension of the purchase of its subsidiary, Ocesa, by Live Nation, the world’s largest promoter of concerts and live shows, which did not reactivate its plan to acquire a majority stake until September 2021. The outlook was bleak.
In July 2020, the Grand Prix, which was to be held in October, was officially cancelled.
The fans are ready to return to the Autódromo. In fact, they never left. When the cancellation was announced, CIE had already sold 70% of tickets. Of those, only 5% requested refunds during the pause period. The treatment of the fans was part of a careful crisis management strategy. This is what Rodrigo Sanchez, CIE’s Director of Marketing and Public Relations, tells us.
There are other factors that influenced fans to hold on to their tickets or even buy those that had remained unsold. One of those factors is ‘Checo’ Perez himself, who was announced last year as a driver for Red Bull, a more competitive team that has been able to see him finish on the podium more often. But also a Netflix series, Drive to Survive, which has been able to bring new generations closer to the sport, according to Federico González Compeán.
With a renewed spirit and greater certainty, the F1 Grand Prix also adapts to the times in which digital assets are gaining the trust of newer and older generations. For the first time in the championship’s sponsorship history, Crypto.com will coexist alongside major luxury brands such as Rolex. One of the fastest growing cryptocurrency platforms today, with millions of users around the world, Crypto.com signed a multi-million dollar deal with Formula One in June to display its name at the best locations on the racetracks.
There is also a slogan that has put a distinctive stamp on the Mexican Grand Prix. That is the F1esta, a play on words between the Formula One logo and one of the main qualities that characterize the charisma of Mexicans. This has won it five awards as the best venue, which has also attracted tourists from all over the world, but this year the message they seek to send abroad will be different.
This was The Strategy of the Day. Written and narrated by Jimena Tolama, and produced by Arturo Luna. Have a very productive day!
