Dubai: Back before the economic crisis punched a hole in just about everything, some 10 theme parks were being planned in Dubai. The emirate already had the sparkling aviation and hospitality infrastructure in place.
The missing part was some mass market leisure attractions that would create a theme park hub in the Middle East — an ‘Orlando 2.0’ if you like.
This year, that dream will become a reality. If all goes to plan, in August, IMG Worlds of Adventure will open its doors. Dubai Parks and Resorts, launching in October, will closely follow it.
According to IMG CEO Lennard Otto, the gold rush is about to begin in earnest. “We are the first movers back into this space but there is a long line of parks coming up again,” he says.
“There is an appetite in this market place. The infrastructure here is far superior to that of Orlando. Within the next five years, we will have the same amount of large-scale theme parks. There will be eight parks in the UAE by 2019.”
And he is not being gung-ho. The oil price may still be low and regional conflict at the doorstep may unsettle some global investors.
But the macroeconomic picture in the UAE is pretty strong. Disposable incomes are still high, unemployment is low and a large youth population are looking for new ways to get their kicks. Add to that already healthy mix, the millions of tourists arriving every year and a bonanza would seem to be just around the corner.
Estimates from trade show organiser International Expo Consults suggest the new parks could bring in $5 billion a year in annual revenue by 2020. Dubai Parks and Resorts alone is expecting 6.7 million visitors next year. And IMG suggests 4.5 million people will visit in the first year of opening.
Meanwhile, consultancy firm PwC projects that the parks will hit 18 million combined annual visitors by 2021. Quite something when you factor in that the emirate had a target to reach only 20 million visitors by 2020 (today the figure is around 12 million). If PwC is correct, it will surpass that by some margin.
The numbers are mouth-watering for hoteliers, malls and airlines. No more low occupancy rates. No more empty shops. No more light-load flights.
This new epoch could be game changing. It is certainly another major step forward in the diversification away from an oil-based economy. It is potentially as significant as the dredging of Dubai Creek, the opening of Dubai International Airport or the launch of Emirates airline.
We are all bored of hearing how Dubai is located within a four-hour flight of three billion people and six billion global citizens are within eight hours. But with no other major theme parks until you reach Germany in the West and China in the East, the UAE could not be better positioned — geographically and economically — to take advantage of this untapped market.
The raw numbers tell you all you need to know. Today, the UAE has 120,000 hotel rooms. That is forecast to grow to 220,000 by 2020 (Abu Dhabi having plans of its own too). It does not end there.
Vast tracts of empty land surround both of the Dubai theme parks opening this year. And both admit they plan to expand the large campuses further to include additional theme parks, hotels and residential developments. In short, over time they could eventually become mini cities in their own right.
As Dubai Parks and Resorts CEO Raed Kajoor Al Nuaimi puts it: “Within the existing development, we have enough land to expand for the next 10 years. The sky is the limit in terms of resorts and that’s why we included the ‘s’ at the end of resorts.
“The theme park element was missing in the Middle East. We have seen how other countries like Singapore and Paris have grown after tapping into this.”
The only real fly in the ointment to all of this is that both theme parks seem to have completely ignored the region’s Arabic culture, focusing instead on the likes of Hollywood and Bollywood. Otto acknowledges this. “A key discussion point for us at the moment is bringing in a bit more of the local culture into our future expansion plans,” he says.
“The Arabian history is rich and there are some beautiful stories to tell. We focused on the brands we have today with Marvel and Cartoon Network and our own proprietary things, but there is no reason why we won’t expand the umbrella in the future.”
Al Nuaimi too admits that some hard choices had to be made. “To bring in this new industry to this market, you first of all need to build on something that is already famous and well known across the world including movies from Hollywood and Bollywood,” he admits “Once you create that mass-market magnet for visitors, then you expand by doing Arabic parks. You want to first create critical mass and then move onto other areas.”
So there you have it. Despite the bumbling global economy and the regional strife in the Middle East, Dubai and the UAE seem to be on the cusp of change. If the Americans can turn an unlikely spot like Orlando into a mass tourist destination where theme park mania rules, there is no reason on earth to think that Dubai cannot be the next iteration of this model.
So folks, Orlando 2.0. You heard it here first.
For information on the real estate sector, within the UAE, please visit our sister site, GNProperty.com.