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Dubai Parks and Resorts gets off to a disappointing start

Dubai Parks and Resorts gets off to a disappointing start


May 12, 2017, 12:30 PM ·

Dubai Parks and Resorts has reported results from its first quarter of operation, and… well, let’s just say that DPR ain’t Shanghai Disneyland.

DXB Entertainments reported just 586,355 visits to the resort’s three theme parks in the first three months of the year. That would put the parks on pace to attract about two million visitors among them for the year — a mediocre attendance figure for just a single park, much less than a multi-park resort with aspirations of becoming a global destination needs to attract. DXB reported Dh214 [US$58.26] in average daily revenue per visitor, which is less than the parks’ posted daily ticket prices. That suggests that most visitors are coming into the park on deeply discounted tickets or annual passes… and that they’re not spending a lot of money while there.

The resort also reports that the majority of its visitors were from the United Arab Emirates, with just 40 percent of visitors coming from abroad. That might also help explain why the resort’s Lapita Hotel posted a dismal 21 percent occupancy rate for the quarter. Overall foreign tourism to Dubai is strong and growing, up 11 percent to 4.57 million visitors in the period, according to Dubai officials. But not many of those visitors are making the trip to the Dubai Parks and Resort complex, which is located about 40 minutes south of the heart of the city, near the Abu Dhabi border.

DPR isn’t the only theme park operator in the region struggling to attract visitors. As we reported last fall, neighboring IMG Worlds of Adventure in Dubai has seen sparse attendanceand Ferrari World in Abu Dhabi hasn’t yet cracked the Top 20 among European and Middle Eastern theme parks in the annual TEA/AECOM Theme Index report, which puts its attendance at fewer than 1.4 million visitors a year.

As many people who follow the theme park industry feared, the UAE — with a population of just over nine million people — doesn’t have a large enough domestic market to support multiple major theme parks. The Dubai and Abu Dhabi parks — those now operating and those planned and under construction — need robust international appeal to thrive.

That requires a combination of more effective and ambitious marketing as well as putting a better and more complete product out there for visitors. DPR missed a great promotional opportunity with its grand opening celebration in December, when neither the Lapita Hotel nor most of the attractions at Motiongate Dubai and shops and restaurants in the adjacent Riverland district were open. Bollywood Parks Dubai was visually stunning, but I did all the attractions in the park in a couple of hours, making the value a tough sell to the park’s target market of middle-class visitors from India and South Asia.

Most of the indoor Dreamworks section in Motiongate is now open, but the Hunger Games land won’t be complete until later this year. And with the scorching summer months approaching, DPR is entering what always was going to be its slowest period of the year. DXB Entertainments is promising spending cuts to stanch the US$90.9 million loss it took in the first quarter — triple the estimate from analysts.

I would hate to see Dubai Parks and Resorts become the next Hard Rock Park, which closed because it failed to connect with the customer base its developers identified when studying its feasibility. The bones of a great theme park resort are there in Dubai, including the on-site hotel that such a development needs to provide the “captive audience” that drives per-visitor spending in a shopping and dining district like Riverland, as well as enabling extended, multi-day stays in the parks.

But DPR has to find a way to fill that Lapita Hotel, ASAP. And it must ensure that it continues to draw local visitors and entices them to spend more in the interim while it gets all of its attractions open and spreads that word to its international target markets.

My unsolicited advice? Diversify the food service in the parks. I searched in vain for something I would consider a signature item from the parks’ restaurants and food stands. Motiongate Dubai lacks the Butterbeer, Dole Whip, Mickey ice cream bar, or other unique, crave-able snack that brings fans into the park with wallets open. Bollywood Parks offered some tasty Indian selections, but would sell more if the park found a way to get that food out onto the street, where visitors can see and smell it. Then, “relaunch” the fully-open parks with another publicity campaign as weather cools in the fall.

Ultimately, though, DPR’s long-term success requires developing a must-see attraction that will draw fans from around the world, including the European market that national airline Emirates markets to so aggressively. With creative partners Lionsgate, Dreamworks Animation, and Sony at Motiongate, their top available franchise would be James Bond, an enduring movie icon that’s not yet been developed into a compelling theme park attraction. But I can’t imagine DXB Entertainments investing the US$100 million-plus that such an attraction would require until it’s stopped losing so much cash each quarter.

That’s the dilemma facing any business looking to get into the competitive, capital-intensive but potentially lucrative theme park business. You can make big money wowing the public, but half-opened, half-realized, and under-marketed attractions won’t get you there. The UAE has been making a strong move to get into the theme park business. But, as with any business, getting in is the easy part. Winning it is hard.

Robert’s on-site reviews from the grand opening of Dubai Parks and Resorts:

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