The UAE has witnessed an epic transformation since it was formed 45 years ago. Dubai and Abu Dhabi, which were once sleepy fishing villages, inhabited by Bedouins, pearl divers and traders, have rapidly evolved into global economic powerhouses, home to some of the world’s busiest airports and attracting a growing number of international tourists.
Never a country to rest on its laurels, the UAE is forging ahead with plans to diversify its tourism offering in a bid to hit ambitious visitor targets and by the end of the decade, is set to become one of the world’s leading theme park destinations.
Dubai is leading the way with a number of world-class attractions now open to the public.
Most recently, Dubai Parks and Resorts has opened the doors to four of its hotly-anticipated attractions – LEGOLAND Dubai, LEGOLAND Water Park, Bollywood Parks Dubai, and Riverland Dubai, the multi-themed dining and retail destination that includes the Polynesian-themed resort, Lapita. This month a fifth attraction, MOTIONGATE Dubai, will open its doors (December 16) and in late 2019, the region’s first Six Flags will debut at the destination.
The roll out of Dubai Parks and Resorts follows hot off the heels of the August opening of IMG Worlds of Adventure, the world’s largest indoor themed destination, featuring four themed zones: Marvel, Cartoon Network, Lost Valley – Dinosaur Adventure, and IMG Boulevard. It complements Dubai’s already prominent theme park offering, which includes Aquaventure Waterpark, Wild Wadi and Global Village, to name a few.
In neighbouring Abu Dhabi, Yas Island, the UAE capital’s dedicated leisure and entertainment destination, Ferrari World Abu Dhabi and Yas Waterworld have witnessed phenomenal success, but there’s more to come. The region’s first Warner Bros theme park is currently being built on the island by Abu Dhabi developer Miral Asset Management, with a mooted opening date of 2018. The new indoor theme park, which is being built to the tune of $1 billion, will also feature a Warner Bros-themed hotel.
According PwC, the UAE has all the credentials to become a world-class leisure and entertainment destination to rival cities such as Orlando, Singapore and Hong Kong if it takes a holistic approach to exploit its unique geographical location, high quality attractions and investment in infrastructure.
The research firm’s report entitled ‘The UAE’s transformation into a world-class Leisure and Entertainment destination’ estimates the country’s total L&E market potential is set to almost double to 45 million visitors by 2021. International tourists will account for 30 million of that total, while residents and friends and relatives of residents, will contribute the remaining 15 million.
PwC believes the UAE’s theme parks alone will attract 18 million visits by 2021. “The UAE has come a long way to realise its global ambition of becoming a Leisure and Entertainment hub to rival Orlando, which is the current market leader,” confirms PwC partner Philip Shepherd.
“The country has recognised that it needs to continue investment and focus on the quality of attractions, as well as appealing to a diverse visitor base from across the world.” Shepherd says the UAE compares well to Orlando in terms of scale, transport links and its F&B offering. In addition, its central location, within an eight-hour flying time of six billion people, provides an unrivalled advantage to further transform the industry.
In 2015, Orlando International Airport reported a record 38.8 million passengers. This was vastly overshadowed by Dubai International, the busiest airport in the world for international passenger traffic, which reported more than 78 million passengers and expects to attract 80 million plus in 2016. Shepherd estimates about 11 million of these passengers actually visit Dubai, “so there is an enormous opportunity to encourage more people to break their trip and stay in Dubai”.
“We believe that developing attractive ‘must visit’ attractions will encourage more stopovers,” he adds. However, the UAE’s theme park industry must ensure all the necessary infrastructure is in place to capitalise on passenger traffic, notes Shepherd. “The key to a consistently successful destination is enabling visitors to enjoy multiple attractions. Offering multi-park tickets, all-inclusive packages and coordinated visitor management from booking through inbound and local transportation, hotels and attractions will be crucial,” he says.
Shepherd believes the projected hotel supply will be enough to meet growing tourist demand as more theme parks open.
“Currently, growth of supply is slightly exceeding growth of demand, but over the long term the development [of hotel rooms] and demand appear to be in balance. We don’t see there being a huge surge in visitors due to the theme parks alone although of course, the Expo 2020 Dubai period will create a surge in 2020-2021, over and above the steady per annum growth being experienced to date,” he says. “However, there is a need for more mid-market and budget hotels as much of the growth in tourism numbers will be driven by [price-sensitive] families and customer segments that cannot afford five-star hotels.
“The theme parks will be addressing some of the demand with the development of their own-site hotels.” Shepherd says the theme park boom will definitely attract a new breed of visitors who are “specifically attracted by the new leisure and entertainment attractions” and will also “encourage more people to break their stay while transiting through the UAE”. Tourists are also likely to increase in their length of stay as there are more activities for them to experience destination wide, he adds.
The guest profile
Another research firm, Colliers International, agrees the family segment is likely to drive an increase in average length of stay across the UAE as new theme parks open their doors. “We expect the largest growth of visitors from the GCC and Indian sub-continent regions,” says Filippo Sona, the company’s head of hotels, MENA.
He says properties located close to theme park locations can expect to achieve higher Average Daily Rates (ADRs) and occupancies than the city average, as witnessed in other theme park destinations such as Singapore. In 2015, Resort World Sentosa reported 92% occupancy compared to the city average of 85%, he notes.
Sona also agrees that more midscale properties are needed to cater to families and young adults.
“Luxury hotels are rarely part of theme parks since visitors prefer spending more on entertainment and shopping, and less on accommodation,” he says. “A key characteristic sought out in theme park hotels is family rooms or apartments, which tend to be a larger size than rooms offered at hotels in the city.” Room sizes and price points aside, Sona says the proximity to the park plays a significant role in a visitor’s choice of accommodation.
“Price-sensitive travellers are more likely to stay further away, in the outskirts of the city, to pay a lower rate, and then commute to and from the park,” he says, whereas guests with more disposable income will opt for the upscale themed properties on site. He adds that while close proximity to theme parks generally boosts hotel occupancy, the distance to the city centre should not be neglected either.
“Proximity to the city centre means easy accessibility, which is a key decision-making factor for corporate and MICE groups,” he says. All major theme parks are MICE draw cards because they offer “new unique venues and experiences”, Sona continues.
MICE business also diversifies the segment mix and softens the impact of seasonality from both the theme park and hotel industry perspective, he adds. Given the theme parks Dubai has developed are located in the east and the south of the city, in districts currently underserved by the hotel sector, development opportunities for family- and MICE-friendly accommodation are abundant, according to Sona.
Meanwhile, existing hotels should have strategies in place to target prime source markets in order to gain competitive advantage – “for instance, shuttle transportation to the parks and packages with access to more than one theme park, etc”.
There are also opportunities for hoteliers to offer twin-centre stays across Abu Dhabi, Dubai and neighbouring emirates, in order to make the most of the UAE’s collective leisure and entertainment offering, adds Sona.
Julien Munoz, vice president – sales for Dubai Parks and Resorts, says the multi-themed attraction is looking to Dubai’s traditional international source markets for growth.
The UK is a “critical market for Dubai as a destination” and is therefore “critical for Dubai Parks and Resorts”, he stresses.
“The UK also has a strong affinity with the parks so we expect British tourists holidaying in Dubai to visit Dubai Parks and Resorts.”
Dubai Parks and Resorts signalled its commitment to the European market by commanding a strong presence at last month’s World Travel Market London.
Munoz says Dubai Parks and Resorts is currently in talks with several major UK tour operators, travel firms, and consolidators with a view to promoting holiday packages that include tickets to the destination.
They include Emirates Holidays, Gold Medal, Travel 2, Thomas Cook, Travel Republic and Attraction World, to name a few.
“We don’t expect people to visit Dubai just for the theme parks at first, but it will change their behaviour while they visit Dubai – it will definitely encourage visitors to extend their length of stay for a few nights,” confirms Munoz.
Around 6.7 million visitors are expected at Dubai Parks and Resorts during its first year of operation, 70% of whom will be international tourists.
Other than the UK, the destination’s biggest source markets are countries within a five-hour flight time of Dubai, such as the GCC (particularly Saudi and Kuwait), as well as India, because there is “no other proposition like this within that radius”, says Munoz.
“This has been a long-anticipated attraction for Emiratis, Saudis and also Indians,” he adds.
In the longer term, Dubai Parks and Resorts will help establish Dubai and the UAE as a theme park capital of the world, Munoz continues.
“Our offering and planned expansion will make the UAE a strong contender in this field,” he says.
Munoz says hoteliers in Dubai have demonstrated a “big appetite” for forging partnerships with Dubai Parks and Resorts.
“They understand the value a theme park can bring, particularly in driving business from the family segment and driving length of stay,” he says.
IMG Worlds of Adventure, which opened in August, has the capacity to host more than 30,000 park-goers daily and anticipates around 4.5 million visitors within its first full year of operation, providing yet another source of family business for the emirate’s hoteliers and perhaps fill in seasonal gaps.
“By offering a fully immersive indoor theme park experience in a temperature controlled environment this enables IMG Worlds of Adventure to be open all-year round,” say Mr Ilyas Galadari and Mr Mustafa Galadari, executive co-chairmen and owners of the Ilyas and Mustafa Galadari Group, which wholly owns the indoor theme park located at Dubailand.
They say IMG is a “must see” destination for international tourists, encouraging visitors to “extend their length of stay in the emirate”.
“It will put Dubai on the map as a family entertainment hot spot,” they add.
Evolving the offering
In Abu Dhabi, “theme parks are at the heart of the entertainment offering and have significantly contributed to the growth of leisure tourism in the capital and its leisure hub, Yas Island, over the past few years, especially among families”, according to Bruno Wiley, vice president – sales, Farah Experiences, which currently manages and operates Ferrari World Abu Dhabi and Yas Waterworld. “The growth we’re witnessing in this sector is also a result of the constant introduction of new experiences at our operating parks on Yas Island,” he says.
“For example, this year at Ferrari World Abu Dhabi we launched a host of new attractions such as the latest record-breaking rollercoaster Flying Aces, and we are bringing a brand new seasonal experience at Yas Waterworld this December – the first of its kind in the UAE – based on Live Action Role Play (LARP), where guests become players in a live adventure game inspired from the ancient tribes of Arabia.
“There’s always more to see and experience within the entertainment landscape in Abu Dhabi, and this diversity will ensure significant growth in visitation and an increase in the length of stay, benefiting all tourism stakeholders.”
The long-term vision is for Yas Island to become one of the top 10 family destinations globally, notes Wiley. The destination is well on its way to achieving that goal, consistently reporting strong growth from every key segment – families, FIT groups and MICE – and from top feeder markets such as India, the GCC and China.
“Yas Island is planning on hosting more than 100,000 corporate travellers annually by 2022, with a continuously evolving MICE offering designed to impress and inspire,” he adds.
An advocate of stakeholder partnerships, Wiley says “much can be achieved through closer collaboration between hotels and key destination players”. “At Farah Experiences we’ve been working closely with hoteliers to develop tactical packages that include entry to Ferrari World Abu Dhabi and Yas Waterworld, in addition to solutions to improve on the services we can offer to visitors of Abu Dhabi,” he reveals.
“For example, we’re developing better tools to enable hotel concierges to place bookings for their guests; a service we’re planning to launch soon.
“Over the past couple of years we also introduced special offers for local hotel staff in acknowledgement of the role they play as ambassadors of Yas Island attractions to UAE visitors. “We’re always open for suggestions and welcome ideas from all our tourism stakeholders.”
In recognition of the important role hotel groups play in promoting theme park destinations to key international tourism markets, Farah Experiences recently signed a strategic partnership with Abu Dhabi-based Rotana, with a view to both parties promoting the emirate’s unique leisure offering globally. The agreement has seen Rotana named Farah Experiences’ ‘Preferred Hotel Partner’. Under partnership terms, Rotana and Farah Experiences will jointly promote the capital’s top leisure and entertainment offerings abroad to drive increased traffic to Abu Dhabi, via tactical marketing campaigns and FAM trips targeting the travel trade in cities that count as major source markets for Abu Dhabi’s tourism industry.
“Our strategic partnership with Rotana gives us a stronger voice and wider reach through our collective marketing and sales channels, to the benefit of our mutual guests who get a great set of exclusive benefits at our venues,” says Wiley.
“We’re invested in this partnership, and we both have the products, the experience and the resources to help showcase the quality and distinction of the leisure offering in Abu Dhabi.”
Rotana and Farah Experiences are “actively promoting each other’s brands by offering an attractive package of discounts, savings and privileges that create unrivalled value for their respective guests; the focus being to deliver significant incentives that will encourage customers to visit and patronise the other’s products and offerings”, explains Guy Hutchinson, COO, Rotana.
Guests staying at any of Rotana’s hotels in the UAE will be offered host of exclusive benefits when visiting Ferrari World Abu Dhabi and Yas Waterworld. These include special discounts on entry tickets (15% off for adults and 20% off for children 12 years and under), a 10% discount on F&B and park merchandise, as well as a complimentary concierge service for luggage and locker usage at both parks.
Similar benefits are available to all members of the Rotana Rewards loyalty programme. Likewise, all Ferrari World Abu Dhabi and Yas Waterworld ticket holders will receive a 10% discount at Rotana’s dining outlets across the UAE, while annual pass-holders will receive an exclusive 15% discount on all Rotana F&B, as well as complimentary breakfast and free Internet when staying at any Rotana hotel anywhere in the region.
Rotana has also put together exclusive Rotana Escape packages offering further benefits to guests staying at any of the group’s hotels in Abu Dhabi. They include one night’s stay, complimentary buffet breakfast, 15% off on F&B, free tickets to Ferrari World Abu Dhabi and Yas Waterworld and 10% off meals and park merchandise.
Hutchinson says the UAE’s rising reputation as a global leisure and entertainment hub augurs well for the hospitality industry “as it will certainly attract more tourists to the destination”.
“The good news is that the list of attractions continues to grow bigger and better, with as many as four theme parks set to open in Dubai by the end of 2016, and the first phase of the Warner Bros. World Abu Dhabi theme park set to open in 2018,” he says.
He cites the UAE Real Estate 2016 mid-year market review by UK-based consultancy Knight Frank, which highlights the opening of theme parks and new tourist attractions as one of the main factors that will drive future demand for Dubai and Abu Dhabi.
In addition to the theme parks, a number of major retail destinations are set to open in Dubai within the next few years. This, coupled with the fact Abu Dhabi is developing entertainment and cultural districts of its own, will “stimulate visitation and maintain the competitive positioning of both cities”, the report states. Hutchinson says “accelerating investments in the mid-market hotel segment” could further fuel tourism growth, reiterating Shepherd’s point that both Dubai and Abu Dhabi remain “underserved in terms of mid-market hotel offerings”.
“[But] the situation is evolving quickly, and greater availability of affordable accommodation in the two cities can help widen the tourist base and attract a new breed of travellers to the UAE – especially those from the millennial generation who are emerging as a major driving force for hospitality industry growth,” he continues.
“As for Rotana, we take great care to ensure that our hotels are developed in strategic locations that provide multiple offerings, such as beaches, theme parks, cultural centres, retail and entertainment destinations. The properties therefore appeal to a wide range of holidaymakers.”
Hutchinson adds: “A successful leisure and entertainment destination creates a seamless, convenient and consistent experience for its visitors. The leisure and entertainment assets themselves become drivers of footfall and tourist growth, and increase the length of stay, rather than being isolated and independent attractions without critical mass.”
Back in Dubai and the opening of Dubai Parks and Resorts is a “hugely exciting and positive prospect for JA Resorts and Hotels”, according to the hotel group’s COO, David Thomson.
He says the new attraction, which is located just 10 minutes by car from its flagship property, JA Jebel Ali Golf Resort, offers repeat international guests “a new experience” that complements the hotel’s “family-friendly accommodation offering”. “The parks will appeal to our key source markets – UK, Germany and the GCC – and grow newer feeder markets like India and China,” confirms Thomson.
“We are confident that as the closest five-star property to the new attraction, we will witness strong growth in family leisure business.
“We have also recently engaged with a dedicated MICE provider focused on the European and the US markets to support us with tailored offerings for this segment, which will, if requested, tie in with the new attraction and drive business to all our portfolio.”
As a recently-signed ‘preferred partner’ for Dubai Parks and Resorts, JA Resorts and Hotels can offer guests preferential ticket rates and availability.
“We have also committed to run a daily complimentary return shuttle bus service for our guests to ensure ease of access to the parks,” notes Thomson.
“Ticketing portals will also be located within the property for guests to purchase and print tickets for their trip through our concierge service.”
Thomson says Dubai now offers a well-rounded mix of activities, attractions and events across the city, beach and desert, which will “attract more visitors and increase the average length of stay”.
“Theme parks boost the emirate’s appeal and at JA, we offer the wholesome family accommodation required to meet this increased demand,” he adds.