SINGAPORE'S decision to host the Formula One promises to be a major boon for its economy and tourism sector, judging by the benefits the race has brought to Bahrain.

Comparisons can be drawn between Singapore and the tiny Persian Gulf island of Bahrain, home to 800,000 people.

But, unlike the plan for a street circuit for Singapore, the Bahrain International Circuit (BIC) is located a good half-hour drive from the capital, Manama.

It is in the desert, and allows drivers full vent to scream around the track. Since its launch in 2004, the BIC has been a major boon for Bahrain.

It has brought greater attention to a country little known internationally other than as an energy hub.With 150 million people tuning in to watch the F1, publicising Bahrain was a major motivating factor for its royal family, along with the Crown Prince Sheikh Salman bin Hamad Al Khalifa's enthusiasm for sports cars and racing.

While Singapore does not lack international recognition, hosting an F1 event is definitely a way to revamp a country's image and bring in the big bucks.

Last year's Grand Prix was the biggest source of income to Bahrain's travel and tourism sector.

It employs 38,000 people and accounted for 2.76 per cent of the country's Gross Domestic Product, netting US$394 million (S$598 million).

Considering the track cost US$148.6 million to build, the returns are massive.And, this year, the event netted even more for a country seeking to diversify from oil revenues.

"In terms of the economic impact last year, we were very close to US$400million," said the BIC's general manager Martin Whitaker.

"I can imagine we will be aiming for somewhere between US$430 million and US$450 million in terms of the economic impact of the F1 and Bahrain Motor Show this year."

Tourism has also surged as a result of the Grand Prix.Some 77,000 people descended on Bahrain for the three-day event last year,spending US$284 million outside the circuit and driving up the cost of accommodation.

"Rooms have trebled in price, although it is not as crazy as the first year,when people were camped out everywhere," said hotelier Jamil Antary."There are now more hotel rooms and seven five-star hotels."

Bahrain has struggled to attract tourists for more than three or four days.

But, according to surveys, 56 per cent of the overseas fans who watched the Bahrain Grand Prix last year returned this year.And 72 per cent of them returned for purely tourism reasons.

Singapore is expecting to net about $100 million from incremental tourism receipts when it stages the F1 next year.

The locals in Bahrain are also enthusiastic about the event, with 86 per cent of Bahrain is who attended the 2006 race returning to watch it this year.

Indeed, in Bahrain, it is hard to avoid the F1 event. Billboards advertising the event dot the roads and the local media give it wide publicity.

The BIC has also capitalised on its proximity to neighbouring Saudi Arabia -only a short drive away across a causeway.

Around 200 events are held every year on the track, attracting thousands of Saudi speed freaks.

Earlier this year, German luxury sports car manufacturer Ruf opened a US$20million factory at the BIC.

"When the race track was built, we decided to come here," said Alois Ruf, the owner of Ruf.

Hosting the F1 is not only about the actual race and associated events, but is also about the sizeable finances that accompany the expanding F1 franchise.

With Bahrain positioning itself as a financial and banking hub for the Gulf,coupled with the royal family's ample funds, the country was a logical choice for the billion-dollar franchise.

Bahrain's F1 has been so successful that neighbouring Gulf states Dubai and Qatar are angling for tracks of their own, which could be as early as 2009 for Dubai.