Why is a hotel company considering becoming an official F1 partner

03/02/2011
NEWS STORY

With a watch manufacturer, parcel delivery firm, insurance company and a bank amongst its sponsors you would be forgiven for thinking that there was no more space for official partners of F1. However, as Pitpass reported back in 2008, F1's majority owner CVC wants to build up a partner portfolio to rival those of the World Cup and the Olympics.

Our spies hear that a global hotel chain is considering becoming one of the sport's next sponsors and there is good reason for this.

Whilst six banks, six oil companies and seven watch manufacturers sponsored F1 and its teams last year, there was only one hotel company involved with the sport. Hilton has been a McLaren partner since 2005 and has generated a huge amount of business from a relatively small investment.

Back in 2009, Pitpass reported that the previous year Hilton's McLaren sponsorship generated $1.2m in media value, $9.2m of business-to-business revenue and $5.5m in bookings through its racing loyalty scheme with additional clients each buying as much as $2m in rooms annually. All that from a few logos on the McLaren's rear wing end-plates which are believed to cost Hilton $3m annually. Hilton has used an extremely intelligent marketing strategy to gain this exposure and the net result has opened the eyes of its rivals.

Pitpass hears that one very well connected sponsorship expert has been contacted by one of the world's biggest hotel chains about advising it on an entry into F1. Apparently it is looking at going one step beyond Hilton and taking up the place of F1's official hotel partner. It makes sense.

Whilst Hilton has gained a strong emotional connection with the public through using Jenson Button, Lewis Hamilton and Fernando Alonso (remember that?) in some of its advertising, it has lost television airtime every time a McLaren car has crashed out of a race.

In contrast, F1's official partners, such as DHL and Hublot, often get trackside hoardings included in their deals and these give constant exposure throughout a race. Since Hilton doesn't take up trackside advertising in F1 the official partner would monopolise this coverage.

It is believed that DHL is paying around $10m annually for its sponsorship so a hotel company which became an official F1 partner could generate enough revenue from the deal alone to cover around half of its cost. The big attraction is that as an official F1 partner Formula One Management could put all its business through the hotel company which would give it a big bonus before anyone even sees its logo on a trackside hoarding.

If the hotel company is advised to accelerate into F1 Pitpass readers will be the first to know.

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Published: 03/02/2011
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