The emirate is diversifying its tourism offering from retail and beaches to include theme parks in its bid to reach 20 million visitors by 2020
Beyond Jebel Ali in Dubai, a 25 million-square-foot leisure and entertainment zone is taking shape in the sand. Work has only begun on laying the utilities and foundations, but the vision is for three theme parks, based on Bollywood, Hollywood and Legoland, encompassing 73 rides and attractions, and live shows.
Dubai needs to find ways to attract new tourists, encourage repeat visitation and drive longer stays
Grant Salter, Deloitte
It is not the only such development under way; three other theme parks are being built in Dubai, set to open by the end of 2017. They will endow the emirate with the largest concentration of theme parks in the region and it is hoped they will draw in visitors from around the world, helping the emirate reach its ambitious tourism targets.
New attractions
Dubai has set itself the target of doubling visitor numbers to 20 million tourists a year by 2020. Between 2012 and 2013, the number of hotel guests recorded in the emirate increased by 10 per cent, from 10 million to 11 million. Dubai will need to sustain this growth to hit its target. The priority now is to diversify the emirates leisure offering, which is currently dominated by retail and beaches.
Dubai needs to find ways to attract new tourists, encourage repeat visitation and drive longer stays, says Grant Salter, director of tourism, hospitality and leisure industry at the UKs Deloitte. In markets with limited cultural or natural heritage attractions, man-made, world-class entertainment is a credible alternative and demand driver.
Dubais Department of Tourism, Marketing & Commerce has said it intends to achieve the 20 million target by focusing on developing the corporate, family and mass tourism segments. The development of theme parks will be crucial to expanding the latter two.
Key fact
The developer of the Dubai Theme Park expects the attraction to draw 5 million visitors a year
Source: MEED
However, Dubai has tried before to deliver massive theme parks. The imitation roller coaster and dilapidated rocket that once promoted Dubailand and now languish on the edge of Dubais desert are sorry reminders of those failed plans.
Back in 1998, a major project, Magic World, was planned along the shores of Dubai Creek on the site of what is now Dubai Festival City. This was later abandoned in favour of developing Dubailand, inland of Sheikh Zayed Road.
The massive $64bn project was intended to be the centrepiece of Dubais entertainment market, with plans for multiple theme parks and attractions, such as Universal Studios, spread over a 3 billion sq ft plot. The developer was Tatweer, a subsidiary of state-owned Dubai Holding.
That scheme and others like it were scrapped in the wake of the global financial crisis of late 2008/09, which saw hundreds of billions of dollars-worth of projects put on hold in the emirate.
Meraas projects
A different local developer, Meraas Holding, is now spearheading efforts to turn Dubai into a major entertainment destination. It has three theme parks currently under execution.
The biggest is the Dubai Theme Park at Jebel Ali. Estimated to cost $2.9bn, it will integrate three different themed areas: Motiongate, Legoland and the Bollywood Park. The developer is hoping it will draw 5 million visitors a year. Half the available land has been reserved for a future expansion with new attractions.
This is a pragmatic approach, says Chris Hewett, a Dubai-based senior consultant at Tri Consulting. By not overdeveloping in the initial year, they can ensure a good, busy atmosphere and test the market.
More crucially, the project has financing already in place. Last month, Meraas launched an initial public offering (IPO) of a specially created subsidiary, Dubai Parks & Resorts, and secured a AED4.2bn ($1.1bn) debt financing with a group of international and local banks. This, along with the IPO proceeds and contributions from Meraas, is expected to be sufficient to cover the projects costs.
Meraas other two theme parks under development Hub Zero and Our Living Planet are both part of its $2bn Citywalk development in Jumeirah and are planned to open in early 2015 and 2016 respectively. It is also building a 210-metre-high Ferris wheel as part of its Bluewaters development, located off the coast of the Jumeirah Beach Residence area of Dubai.
IMG park
Next year will also see the opening of IMG Worlds of Adventure, being developed by the local I & M Galadari Group. The $1bn-plus project secured $330m in financing in April, as a syndicated loan arranged by Abu Dhabi Islamic Bank. It is expected to be the largest indoor entertainment centre in the world, covering 1.5 million sq ft, and will have a capacity of more than 20,000 visitors a day.
The enormous Mall of the World development in the Al-Sufouh district will also include a theme park in its second phase. However, the Dubai Holding-owned project is still at the planning stage and completion is at least a decade away.
With theme parks, its the more the merrier, says Brian Machamer, senior director of theme park operations at Dubai Parks & Resorts. Competing theme parks will entice more foreign visitors and will be a catalyst for growth.
Abu Dhabi already operates a highly successful theme park on Yas Island. Ferrari World, currently the worlds largest indoor theme park, with 20 rides and attractions, has a capacity of 20,000 visitors a day, while the nearby Yas Waterworld has 43 rides and attractions and a capacity of almost 6,000 visitors a day. The local Aldar Properties is currently receiving main contract bids for a $544m expansion, a Warner Brothers theme park, to be completed in 2017.
Economies of concentration
The theme parks under development in the UAE will be the only world-class theme parks within eight hours flight of the country.
It is hoped tourists will visit several parks during a trip, meaning competing sites nearby increase rather than decrease attendance figures. The new theme parks are expected to consolidate Dubais position as a destination for short holidays in the Middle East and Asia, and diversify its family-friendly offering from shops and sun-loungers.
Dubai Parks & Resorts is planning its Bollywood Park for tourists from Asia as well as the many GCC residents from the Indian subcontinent. Its other two parks Hollywood-themed Motiongate and Legoland targeted at the under-12s, are calculated to appeal to different demographics, as is the tiered ticket pricing. The central hub of restaurants between the parks is aimed at residents out for the evening as well as theme park ticketholders, reflecting the drive to appeal to a range of markets.
With Dubai taking advantage of its geographic position and establishing itself as an aviation hub between Europe, Asia and Australia, transit visitors will be an important target market. Transport links are key to this vision and the air and road access is in hand. Dubai Parks & Resorts is being built alongside Sheikh Zayed Road in Jebel Ali near the new Al-Maktoum International airport. More importantly, it has Dubais Emirates Airline on board as a partner to coordinate marketing and transport links.
Industry observers are unanimous about the depth of pent-up demand for theme parks in the GCC and the wider region. But capturing visitors from further afield will require a sophisticated marketing and sales machine.
The [public relations aspect] needs to be managed better to improve perceptions of the country overseas, says Adrian Bell, co-founder and executive director of local brand experience agency Action Impact. More sophisticated visa rules would allow easy access for more tourists.
Tipping point
The next step will be to expand and diversify the entertainment tourism model, to provide the kind of scale and variety of attractions that lure tourists and encourage them to stay longer and also return. Dubai as a tourist destination is at a tipping point of entertainment, says Bell. The theme parks will be a catalyst for the further development of the entertainment and leisure market all around the city.
Dubai has enjoyed hotel occupancy rates of nearly 79 per cent in the year to September, and one of the highest average revenue per available room rates in the world at $316. However, the successful implementation of its theme park projects is essential if it is to sustain the growth needed to reach its target of 20 million visitors by 2020.
Destination Dubai 2020
Dont miss Destination Dubai 2020 on 27-28 January 2015 at The Address Hotel, Dubai Mall, Dubai
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