Leisure and entertainment investment will boost GCC

02 October 2019
Better alignment between investments and consumers could deliver additional revenues of $3.4bn a year in the GCC

Consultant Strategy& has called for GCC governments to improve the way theme parks are planned in the region, and to invest more in community facilities, visual arts and live entertainment.

In a report on 2 October, the consultant says GCC governments are missing out on significant potential tourism revenues because of a mismatch between leisure and entertainment (L&E) investments and consumer demand.

It says better alignment between L&E investments and customer preferences could deliver up to $3.4bn a year in additional revenues across the GCC.

Based on a survey of 1,200 consumers across the region conducted by Strategy& think tank The Ideation Centre and an assessment of current and planned L&E assets in the region, the report said GCC governments should prioritise three areas for investment:

  • Increase sensibility to arts and culture: GCC consumers are not sufficiently engaged in arts and culture, the report says. GCC governments should make arts and culture offerings more available and publicise them better. They should encourage participation through the creation of immersive and engaging experiences
  • Focus on neighbourhood-based entertainment offerings: GCC governments should also incentivise investments in neighbourhood entertainment offerings. With returns on investment of more than 20 per cent, family entertainment centres should be prioritised, while outdoor urban parks should be more available, especially in prime city locations
  • Invest more carefully in theme parks: Investment in theme parks can create jobs, attract tourism and increase tax revenues. But while there is a growing demand for theme parks, GCC governments need to assess any opportunity carefully as they require large and complex investments. There is typically a lengthy period before they break even, in part because of high operating costs

“Based on consumers’ self-reporting, an improvement in L&E offerings could potentially lead to an increase in spending by over $3.4bn a year across the GCC," says Strategy& Middle East senior executive Karim Sarkis. "More than 78 per cent of respondents showed willingness to increase their spending on L&E if the offerings were more aligned with their needs. This would correspond to an average increase in spending on L&E activities of 8.5 per cent per household.”


Investment plans


All six countries in the GCC are investing significantly to develop their leisure and entertainment sectors to improve quality of life, celebrate national identities and diversify national economies.

Saudi Arabia is investing heavily and introducing major changes with the aim of building a thriving L&E sector and a comprehensive offering across segments, in line with its Vision 2030 reform programme.

Riyadh has established new entities such as the Ministry of Culture, the General Entertainment Authority and the General Sport Authority in order to deliver its L&E plans and 11 additional culture subsector bodies are being established in the kingdom to focus on developing areas such as visual arts, performing arts, film and music.

The UAE, Qatar and Bahrain all include L&E in their national visions and plans, with a primary focus on celebrating culture, heritage and national values by investing and promoting their arts and culture ecosystem.

Kuwait and Oman are also developing their leisure and entertainment sectors, although less directly.

“The current L&E investments under way in GCC countries are ambitious," says Ideation Centre senior fellow Melissa Rizk in a statement. "By working in partnership with the private sector, GCC governments can develop the L&E sector so that it also opens the region to an influx of domestic and international tourists. In turn, this could unlock significant economic potential for the region, helping countries to fulfill their national development objectives.”


Consumer survey


The survey of 1,200 consumers by the Ideation Centre examined consumer preferences in six segments of the L&E sector: home recreation, visual arts, live entertainment, neighbourhood recreation, mega parks and sports.

The survey highlighted key findings:

  • GCC residents place a premium on access to leisure and entertainment
  • Two-thirds of respondents see leisure and entertainment as a 'must' for quality of life and prosperity
  • Respondents see value in improving the quality and selection of L&E offerings
  • Among the primary benefits they perceive are:
    • A better lifestyle and increased happiness (69 per cent of respondents)
    • Stronger family ties (50 per cent of respondents)
    • Stronger social connections (39 per cent of respondents)
  • GCC consumers reported generous spending on L&E activities
  • Survey respondents said they are willing to spend more
  • GCC consumers claim to spend an average of 6.2 per cent of their income on L&E
  • The average household in the UK spent around 4.2 per cent of its income on L&E in 2018

 The survey suggested that these trends are likely to further intensify, as respondents aim to increase their consumption of sports activities, neighbourhood recreation and theme parks.

In contrast, engagement levels for visual arts and live entertainment are likely to remain flat or even decrease.


GCC assessment


UAEThe UAE has a strong supply of recreational activities and mega parks, coupled with renowned visual arts and live entertainment offerings
BahrainBahrain leads the region in terms of supply of cultural and neighbourhood entertainment, especially its live entertainment sector (theatres and festivals)
Saudi ArabiaSaudi Arabia has a limited supply of leisure and entertainment offerings relative to its population size. If it achieves its 2030 plans, its overall L&E offerings, excluding sports, will be the richest and most diverse in the region in absolute terms
QatarThe supply of sports and visual arts offerings is well advanced and a priority in the country
KuwaitProviding cultural offerings is a main focus in Kuwait, with an emphasis on building libraries and promoting visual arts, as well as accessible recreational options, especially outdoor parks
OmanHome to the region’s oldest opera house, Oman is notable for offering prestigious national and international opera performances


“L&E activities impact society’s well-being positively in a number of ways, through engaging nationally relevant culture and art activities, increasing citizens' participation in recreational events and affirming belonging among diverse groups of people, which all lead to a higher quality of life," says Strategy& Middle East partner Bahjat el-Darwiche. "However, to get the most from their L&E initiatives, GCC governments have to prioritise investments to match the specific needs of the sector’s consumers.”

“We compared available and planned offerings with GCC consumers’ consumption levels and preferences," says Ideation Centre director Alice Klat. "Our survey findings show that there is a lower level of engagement with the cultural activities, as GCC consumers favour lighter L&E activities such as neighbourhood recreation and sports. Based on survey results, this is due to the limited awareness, variety and cultural relevance of current activities.”

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