DUBAI: Dubai is using record oil revenues to secure multibillion dollar deals with major US entertainment companies to draw 15mn tourists a year by 2015.
One of the world’s fastest growing tourism hotspots, Dubai will invest almost $350bn on leisure projects over the next 12 years; including a ski resort; a virtual reality time travel amusement park; and a mock Jurassic world populated with more than 100 robotic dinosaurs.
With the US entertainment market largely flat, theme park operators are looking to international ventures in the oil-rich Middle East to grow their business. Dubai is offering deals US companies can’t resist.
“At this initial level, it’s a win, win, for both parties. The timing is right, a perfect storm of sorts,” US-based theme park consultant Garry Goddard told Zawya Dow Jones. “With the US brand companies seeking expansion without risk, and Dubai needing international brands with a willingness to pay the price to have them.”
The emirate, which expects tourism numbers to rise to 10mn by 2010, up from 7mn in 2007, has already signed mega deals with US-based Six Flags Inc, the world’s largest theme park company; Dreamworks Animation SKG; Universal Studios, Busch Entertainment and Marvel Entertainment Inc, to develop amusement parks rivaling those elsewhere.
In each case, Gulf-based developers are spending millions of dollars to build the parks, while the US entertainment firms reap the rewards from licensing, royalty and management deals with minimal financial outlay.
At more than twice the size of Walt Disney World in Orlando, Dubailand will be the pinnacle of the emirate’s tourism draw.
The $110bn, 107-square mile development by state-owned real estate firm Tatweer will include a seven-mile strip of themed hotels and sports facilities such as Music City and Tiger Woods’ first golf course. Visitors, expected to reach 40,000 a day, will also be able to enjoy a range of attractions already found in the US, as well as some that aren’t.
Six Flags Dubailand will be the first Six Flags project to be developed outside of North America. Dreamworks Animation Park, a $50mn development, will be the studio’s first entertainment park and Marvel’s first $900mn Superheroes theme park will feature world renowned Super Heroes such as Spider-Man and The Incredible Hulk.
However, some entertainment experts say the market could quickly become flooded. Orlando, Florida, “took 30-plus years to create a major theme-park destination. It’s critical that the launch of projects in Dubai is phased to make sure that demand is built up,” says Christian Aaen of Economic Research Associates, a US entertainment-consulting firm.
There are also questions over who will fill Dubai’s planned - mostly luxury - 125,000 hotel rooms scheduled to open by 2015.
“Dubai is still a long flight for some regions of the world,” says Aaen. “It also needs to expand its mid-level and budget market to attract a broader tourism base and in particular the family market.”
Dubai is confident of its plans.
“We’re not trying to attract one particular type of tourist from just a specific region of the world. Dubai will offer something for everyone,” says Eyad Ali Abdul Rahman, acting director of business development at Dubai’s department of tourism.
While an initial curiosity may bring first-time visitors, analysts say maintaining high tourist numbers could be harder. “Getting people there the first time is step one, and then getting them to come back again and again is the next, and both are important to long term success,” says Goddard.
As well as facing growing competition from other regions planning major entertainment destinations, such as Macau, Hong Kong, Singapore, Korea, and China; Dubai will have to fight off competition closer to home.
The Gulf region as a whole is set to invest $3.63tn on the leisure industry until 2020, according to London-based research company Global Futures & Foresight.
Just a two-hour drive away, Abu Dhabi - Dubai’s bigger and wealthier brother - is positioning itself as a world-class cultural destination.
The UAE capital’s Saadiyat (or Happiness) Island will be home to an offshoot of Paris’ Louvre museum, a Guggenheim museum, a Tadao Ando Maritime Museum and a Zaha Hadid-designed performing arts center.
But Abu Dhabi’s appeal won’t be limited to the cultural visitor. Like Dubai, it is also looking to attract those in search for some theme park fun.
It has inked deals with Hollywood studio Metro-Goldwyn-Mayer Inc for an entertainment complex based on MGM’s library of 4,100 films, which include The Pink Panther, Rocky and the James Bond franchise.
Warner Brothers Entertainment, a unit of Time Warner Inc, is also planning a theme park, hotel and cinemas across the emirate.
Motor enthusiasts will be able to head to Ferrari Land, a Ferrari-themed park, which will include a Formula One grand-prix race track, a twin rollercoaster ride that allows competitors to race against each other and the only Ferrari driving school in the world outside the automaker’s base in Maranello, Italy.
With so many entertainment developments planned within such a short space of time and close proximity, analysts warn that the quality of the region’s projects could be compromised.
“Some of the new hotel developments have questionable build standards and appear rushed,” says Rohit Talwar, chief executive of Fast Future, a UK-based consultancy firm. “People paying Dubai’s spicy prices expect five star-plus service.” – Dow Jones Newswires
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