The Singapore Grand Prix was a historic night as it marked the first night race in the history of Formula 1. Over 100,000 spectators were expected to have cheered on the drivers, and the Singapore Tourism Board anticipate an incremental revenue of around US$70 million will have been generated from the event, as well as the intangible benefits the city will receive from being associated with the premium brand that is Formula 1.

Commenting, Alex Kyriakidis, Global Managing Partner of Tourism, Hospitality & Leisure at Deloitte said: “There is no more prestigious global sporting event that a city can host over a single weekend and hoteliers in Singapore were certainly celebrating the success. The Grand Prix will have showcased the city as a top end leisure and tourism destination, catapulting it onto the world stage.”

Alan Switzer, Director in the Sports Business Group at Deloitte said: “The SingTel Singapore Grand Prix was one of five races to be held in Asia during the 2008 season. With India and South Korea reportedly aiming to host a Grand Prix in 2010, there may soon be seven Asian based races compared to only one ten years ago”.

Marvin Rust, Managing Partner for Hospitality in Deloitte UK concluded: “By 2015, Singapore aims to be a powerful tourism hub, welcoming 17 million visitors spending S$30 billion. High-profile events such as the Formula 1 Grand Prix and the Youth Olympics in 2010 will be some of the many events raising Singapore’s profile over the next few years. In addition, the opening of the first integrated resort in 2009 and the expansion of Singapore Airlines Airbus A380 routes to London and Tokyo earlier this year, will put Singapore firmly on track to achieve its Tourism 2015 target”.

Margaret Ewing, Deloitte partner and vice chairman, comments: “CFOs are preparing for a more prolonged period of distress in credit markets than they had earlier expected, with cost cutting and cash preservation coming to the fore. There is also a growing readiness to contemplate more radical options such as off-shoring and dividend cuts, a reflection of the growing intensity of the slowdown.”

Corporates see the biggest risk to their business being posed by a continuation of financial stress and a weaker economy.

Ian Stewart, UK economist and director at Deloitte, comments: “In the era of low economic volatility and strong growth corporates did not have to worry too much about such macroeconomic risks. Now they are at the forefront of their concerns.

“Despite a weaker economic outlook sentiment on mergers and acquisitions (M&A) turned positive in the third quarter. 48% of CFOs expect M&A to increase with only 26% expecting a fall. Sentiment about private equity activity has also improved”.

Less credit, pricier credit
Almost all CFOs are now reporting that credit is costly and hard to obtain. 97% of respondents said credit was costly, up from 89% in June and 59% a year ago. 89% of respondents said credit was hard to obtain, up from 77% in June and 48% a year ago.

While the supply of credit available to corporates has clearly contracted, so too has credit demand. For the first time since the Survey started, more CFOs plan to reduce gearing over the next year than to raise it. This fits with the results of the latest Bank for England Credit Conditions Survey which found that the only source of strong demand for credit came from corporates seeking to restructure their balance sheets.

Margaret Ewing comments: “Non financial corporates appear to be following banks in cutting expenditure and strengthening their balance sheets”.

Cash preservation and cost cutting
Most CFOs think that credit conditions are unlikely to improve before the second half of 2009. Indeed, just over half, 53%, expect the recovery to come in 2010 or later. Back in March, the overwhelming majority of CFOs expected conditions to have improved by the middle of 2009.

More than half of CFOs plan to cut current employee numbers and capital spending, up from less than half six months ago. 70% expect to cut future hiring and 82% to reduce discretionary spending such as travel, hotels, entertainment and training.

The biggest increase has been in the proportion of CFOs contemplating moving capacity offshore (more than doubling from 13% to 29%) and reducing dividends (a five fold rise to 16%).

Download the full report: The Deloitte CFO Survey – Digging in for the downturn: 2008 Q3 results.

ENDS

Notes to editors:

About the Deloitte CFO Survey
This is the fifth quarterly Deloitte survey of Chief Financial Officers and Group Finance Directors of major UK companies. The Deloitte CFO Survey is the only survey of major corporate users of capital which gauges attitudes to valuations, risk and financing. The 2008 Q3 Survey took place between 12 and 30 September. This predates the launch of the UK bank rescue but was a period of immense financial market turbulence including the failure of Lehman, the nationalisations of AIG and the launch of the US bank rescue scheme. 105 CFOs, including those of 28 FTSE100 companies and a further 42 FTSE250 companies, participated in this survey. The rest are from a combination of FTSE Small Cap companies, private companies and major UK subsidiaries of companies listed overseas. The combined market capitalisation of the listed companies surveyed is over £370 billion.

About Deloitte
In this press release references to Deloitte are references to Deloitte & Touche LLP, which is among the country’s leading professional services firms. Deloitte & Touche LLP is the United Kingdom member firm of Deloitte Touche Tohmatsu (“DTT”), a Swiss Verein whose member firms are separate and independent legal entities. Neither DTT nor any of its member firms has any liability for each other’s acts or omissions. Services are provided by member firms or their subsidiaries and not by DTT. Deloitte & Touche LLP is authorised and regulated by the Financial Services Authority.

Malcolm Wilkinson, head of Deloitte’s marketing effectiveness team said: “As market conditions deteriorate growth is like gold dust. Our research has found that organisations believe that marketing is the driver of growth through its role as a generator of demand. It is now up to marketing to rise to the challenge.”

Deloitte’s research found that 81% of CEOs identified marketing as a key driver of growth and 85% identified it as crucial to devising corporate strategy.

Once in a lifetime opportunity for marketing
Malcolm Wilkinson continued: “There is a once in a lifetime opportunity for marketing to step up to the challenge and prove itself as being integral to business growth. That marketing is fundamental to organisational growth is understood, but to deliver that growth marketing needs to be effective.”

The views of senior marketers surveyed by Deloitte in July 2008 reveal a widespread lack of confidence in their own profession with only 20% believing that marketing in their organisation is truly effective.

“The irony here is that executives are saying in the same breath that marketing is fundamental to growth but are also looking to cut marketing budgets in this challenging trading period. We believe it is the failure of marketers to demonstrate effectiveness that ultimately leads to an inability to defend marketing budgets. That marketing budgets are viewed as expendable when it is almost universally accepted that marketing is responsible for generating demand highlights an inherent contradiction and a lack of clarity around its role and value.” Malcolm Wilkinson said.

Deloitte believes that an organisation’s inability to deliver marketing driven growth is largely due to a lack of shared understanding of the role of marketing.

* Only 12% of senior marketers strongly agree that the role of the Marketing function is clearly articulated within their organisation.
* And of the same set of respondent only 20% strongly agree that the roles and responsibilities of the marketing department are well defined.
* This is also a view held within the boardroom where 77% of c-level respondents believe their employees do not fully appreciate the value of marketing.

These findings are based on three years of research and analysis (1) into the role of marketing (2) and the differing boardroom perspectives and an ongoing benchmarking exercise (3) that reveals the detailed views of 160 senior marketing professionals. Deloitte are also today publishing Leadership for Growth, the second in a series of reports that focuses on the need for leadership from the CEO to generate marketing driven growth.

Marketing should move to the centre of business
Malcolm Wilkinson continued: “Marketing can become central to business if it can live up to its own billing. You can’t expect an organisation to articulate itself when the Marketing function cannot articulate its own role.”

“It will need to do more to convince finance professionals through a shared understanding of marketing measures that are clearly linked to strategy. The marketer must present the value created in terms that the Finance function can understand. Only 16% of respondents said that their Marketing function is able to communicate its needs to other operational areas. It is clear from our research that Marketing is not taking up this challenge – it only has itself to blame.”

“Our report calls for CEOs to review where their organisation sits in this debate in order to turn their vision and strategy of marketing driven growth into reality. To do this business leaders must clearly identify the drivers of growth for their business, align leadership around a shared understanding of the role of marketing and clearly articulate its role across the wider organisation.”

Advice is available on the BVRLA website with legal guidance from Deloitte & Touche.

From the 1st April 2009, cars below 160g/km CO2 can claim more tax relief than their more polluting counterparts. BVRLA say company fleet managers need to start looking at the whole-life costs of their vehicles, concentrating on emissions and not just list-price.

“Any company that runs business cars or is thinking of doing so needs to act now if it wants to be in a position to take full advantage of the changes next April,” says John Lewis, director general of the BVRLA.

For full details and further information, visit www.bvrla.co.uk