The one-off return of Formula 1 racing to Malaysia in October could generate an estimated RM1.1 billion to RM1.3 billion in total economic output, with tourism, hospitality, transport and retail among the main beneficiaries, according to Hong Leong Investment Bank (HLIB) Research.
The rescheduled Bahrain Grand Prix will be held at the Sepang International Circuit (SIC) from Oct 2 to 4, 2026, marking Formula 1’s return to Malaysia for the first time since 2017. The race was shifted from Bahrain because of geopolitical tensions in West Asia.
HLIB said the economics of hosting the event are significantly more favourable than during Malaysia’s previous tenure on the F1 calendar from 1999 to 2017.
Under the current arrangement, Bahrain will absorb the estimated US$70 million to US$80 million, or RM285 million to RM326 million, Formula One rights fee, while Malaysia’s financial commitment is expected to be limited to around RM40 million to prepare Sepang to meet F1 specifications. Bahrain will receive ticketing revenue, while Malaysia is expected to benefit mainly from tourism and broader economic spillovers.
Tourism Spending Seen As Main Economic Driver
HLIB estimates average tourism expenditure among F1 visitors could reach about RM8,879 per person, roughly twice average tourist spending.
Applying an economic output multiplier of between 1.5 and 2.1 times, the research house estimates the race could generate RM1.1 billion to RM1.3 billion in additional economic output.
The spending impact is expected to be spread across accommodation, transport, food and beverage, retail and other tourism-related services.
Based on Malaysia’s historical tourism expenditure profile, country-specific tourism goods account for about 30% of spending, followed by accommodation at 22.1%, passenger transport at 21.0%, and food and beverage services at 13.9%.
HLIB said the event’s timing could provide an additional lift because it coincides with Visit Malaysia 2026 and China’s National Day Golden Week from Oct 1 to 7.
Chinese tourists were among Malaysia’s highest-spending visitors in 2024, spending an average RM6,291 per capita, compared with RM3,753 for tourists of other nationalities.
F1 Popularity Much Stronger
HLIB said the global Formula 1 market has changed substantially since Malaysia last hosted a race.
Global attendance increased from around 4.2 million in 2019 to a record 6.7 million in 2025, with 19 of 24 races selling out last year. All 11 events held in the first half of 2026 were also sold out.
The global F1 fan base reached 827 million in 2025, up 12% from 2024 and 63% compared with 2018, supported by broader entertainment exposure, more competitive racing and content such as Netflix’s Drive to Survive and F1 The Movie.
HLIB estimated aggregate F1 circuit capacity utilisation reached 89.2% in the first half of 2026, compared with 58.9% in 2017, suggesting significantly stronger demand for live races.
Malaysia also faces limited regional competition, with Singapore currently the only other ASEAN country hosting a Formula 1 race.
Better Economics Than Previous Hosting Era
Malaysia previously hosted the Malaysian Grand Prix continuously from 1999 until 2017, but eventually withdrew amid rising hosting costs and declining ticket sales.
Between 1999 and 2012, the combined cost of hosting Formula 1 and MotoGP amounted to about RM2.5 billion, with government grants accounting for RM1.9 billion, or 74% of the expenditure. Hosting rights were also subject to annual increases of between 5% and 10%.
A previous economic impact study conducted by PwC found that the 2011 Malaysian Grand Prix generated RM385 million for the national economy, equivalent to about three times the government’s investment in hosting the event.
HLIB said the latest arrangement therefore offers a more favourable risk-reward profile for Malaysia because the country avoids the substantial licence fee while retaining tourism-related benefits.
Tourism Jobs And Current Account Could Benefit
The research house also highlighted the wider employment impact of tourism-related industries.
Services account for 68.3% of Malaysia’s formal employment, with wholesale and retail trade making up 20.9%. When food and beverage, accommodation, and transport and storage are included, tourism-related industries account for almost one-third of formal employment.
Although wages in some tourism-related industries remain below the national median, HLIB noted that wage growth in wholesale and retail as well as food and beverage services has recently outpaced overall median wage growth, indicating firm labour demand.
The event could also provide a modest boost to Malaysia’s external position.
Travel receipts are the second-largest contributor to Malaysia’s current account surplus after goods, with leisure and other personal travel accounting for the bulk of receipts. HLIB said additional foreign tourist arrivals and spending from the F1 weekend could strengthen international trade in services and support the current account surplus.
Overall, HLIB described the Bahrain Grand Prix’s temporary relocation to Sepang as a net positive for the Malaysian economy, particularly given the limited financial commitment, the event’s timing during Visit Malaysia 2026 and China’s Golden Week, and Formula 1’s much larger global audience compared with when Malaysia last hosted the sport.
