Nürburgring 2007

Highly regarded internationally and enjoying a very high awareness level in Germany, the "Nürburgring" brand is already successful in markets inside and outside of motor racing (for example Rock at the Ring which is now in its 20th plus year, or the daily guided tours for day trippers or tour groups and the Nürburgring business park where many of the leading companies in the automobile industry have set up offices). Every year around two million visitors come here to experience the fascination of the most famous race track in the world.

Around 100 motor racing events and around 200 other events attract visitors from all over the world to the region. No longer merely a renter of race tracks, the Nürburgring with its all-year leisure and business center both necessities for existing customers from the worlds of industry, motor racing and tourism and at the same time attracts new target groups.

Another Milestone

Developing the Nürburgring into an all-year leisure and business center has been the most important milestone in its history since the building of the Nordschleife in 1927 and the addition of the Grand Prix circuit in 1984.

The complex includes all-weather presentation and event areas as well as additional accommodation facilities in the immediate vicinity of the race track, an extended range of services for corporate customers and an Indoor Attraction Center (thematically designed as "myth Nürburgring" and with the fastest coaster in the world).

This is a unique feature, both as a tourism marketing tool and as a module for corporate customers. It not only serves a potential clientele of 28 million people who live within a two-hour drive in the core catchment area, but also underlines the Nürburgring`s top position internationally.

Joint Marketing

The four business units "Racing", "Adventure", "Business" and "Holiday" jointly market the entire service portfolio (existing and future modules) offered by the Ring and the region. These four channels serve the Nürburgring’s four core target groups: motor racing fans, participants and organizers, men and women who actively participate in driver training sessions, mountain biking and Nordic walking etc., corporate customers from the car and supplier industries, organizers of congresses and conferences, and day trippers and tourists visiting the region.

Networking with existing tourism service providers (hotels, guest houses, leisure parks and the operators of bicycle tours, quad trips and the like) is the key to success. Shared internet booking platforms for hotels and guest houses, joint participation in trade fairs as well as joint press trips and many other activities have already taken place and will be intensified in the future.

The picturesque and multi facetted Eifel region with its volcanoes, woods and lakes and its winter sports areas in Nürburg and Jammelshofen, together with all the attractions offered at the race track, are a combination unique in the world. This bi-polar contrast makes everything the Ring and the region together have to offer something quite special, and takes account of a trend and increasing demand among tourists, as consumers, for emotional and unforgettable holiday experiences.

Investment Costs

The total investment amounts to around 215 million euros. The Nürburgring GmbH will be responsible for a sum of around 135 million euros, primarily for the modules near the race track such as the grandstand, boulevard, indoor arena, event hall, welcome center and indoor attraction section. A large part of the financing and the risk will be borne by private investors.

The investor for the Hotel, Motor Sport Resort and "Eifel Village" (Dorf Eifel) modules will contribute around 80 million euros. These facilities will be run by operators with a lot of experience not only in the tourism business but also in the corporate customer business. To fund and minimize the risk of the total investment, other private partners of the Nürburgring will in addition make available around 40 million euros for construction work and equipment, as well as for rents and licences for individual modules and facilities. For the Nürburgring GmbH, the percentage of the total risk is thus less than 50 percent.

The economic risk for the Nürburgring GmbH has been analysed in detail by the auditing company Deloitte. The experts confirm that the calculations estimated for the business plan are plausible and conservative, that the construction project will bring in considerable additional income as business develops and that, as a result, the company can cover this investment. The investment share provided by the Nürburgring GmbH does not come from federal state or county funds but is financed by the Nürburgring GmbH. According to the Deloitte opinion, the Nürburgring GmbH would still be able to meet its obligations without federal state aid, even if business were to develop much less positively than is conservatively planned at the moment.

The concept is economically viable. A further opinion confirms in addition that no extraordinary risks exist as a result of the actual building project.

The Nürburgring GmbH generates an ordinary return in its core business. The losses sustained in the past few years were due to hosting Formula One. Compared to these however, the value added for the local economy was considerably higher. The company has a solid equity capital base. In the past 15 years the Nürburgring GmbH has invested the profits it itself generated, amounting to approximately 100 million euros (including those from Formula One), in a strategically sensible way, for example in a modern pit building and in upgrading the racing tracks, and it did so without any appreciable public assistance. Further millions will be invested in the next few years, in particular in the 80-year-old Nordschleife in order to preserve its usefulness to motor racing and industry.

Nürburgring 2009

Developing the Nürburgring will increase the number of jobs there to more than 1,000. The net domestic product generated by the Nürburgring in the region is enormous. The loss of the knock-on effects on the regional economy, which were considerably greater than the operating losses sustained by the Nürburgring GmbH, and the around 200 jobs directly threatened as a result, illustrate the need for alternatives and additional added value. Together with Frankfurt-Hahn Airport, the Nürburgring development project is the biggest economy-boosting measure by the Land Rhineland-Palatinate. The additional income generated by the development project and the new facilities will also guarantee the financing of Formula One racing at the Nürburgring until after the present contract expires in the year 2011.

Formula One alone generates a turnover per race of around 60 million euros in the region. Bernhard Ecclestone too was excited at a presentation of the construction plans and strategies, and confirmed that for Formula One racing – in particular for Formula One racing – the Nürburgring had made the right decision and that it was internationally competitive.

-DEDERICHS REINECKE & PARTNER, André Schmidt-  also photos
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