DXB En­ter­tain­ments’ out­look bright­ens on ris­ing theme park vis­i­tors

Arab News - - BUSINESS - RE­BECCA SPONG

LON­DON: The pop­u­lar­ity of the new Dubai Parks and Re­sorts theme parks is pick­ing up, with the num­ber of peo­ple vis­it­ing the at­trac­tion reach­ing its high­est level to date in the fourth quar­ter last year.

The in­crease is likely to bol­ster the out­look for park owner DXB En­ter­tain­ments, which posted a quar­terly loss of $56.3 mil­lion and a year-to-date loss of $234 mil­lion in the third quar­ter of 2017.

Rev­enues in Q3 also slipped to $31 mil­lion in the third quar­ter from $33 mil­lion and $44 mil­lion in the re­spec­tive two pre­ced­ing quar­ters.

The Dubai-based theme parks were first launched in late 2016, with all of the rides and at­trac­tions across four parks — in­clud­ing those themed around the movie fran­chise “The Hunger Games” — fully open to the pub­lic in the fourth quar­ter of last year.

A to­tal of 796,000 vis­i­tors en­tered the park in Q4 2017, mark­ing a 66 per­cent in­crease on the pre­vi­ous quar­ter, ac­cord­ing to a Jan. 30 com­pany state­ment on the Dubai Fi­nan­cial Mar­ket.

“Dur­ing 2017 we recorded close to 2.3 mil­lion vis­its, with the fourth quar­ter de­liv­er­ing our high­est visi­ta­tion to date, a clear sign of progress against our strate­gic plan and a re­flec­tion of the new pric­ing and mar­ket­ing strat­egy im­ple­mented in Septem­ber last year,” said Mo­hamed Al­mulla, CEO and man­ag­ing director, DXB En­ter­tain­ments.

The hike in vis­i­tors ex­ceeded some an­a­lysts’ ex­pec­ta­tions. “The vis­i­tor ar­rival num­ber is 4 per­cent higher than our fourth-quar­ter 2017 es­ti­mate of 765,000,” said Ayub An­sari, senior an­a­lyst at SICO Bahrain, in a re­search note sent to Arab News.

“Bet­ter than ex­pected park ar­rivals could lead to bet­ter sur­prise on the topline num­ber; no ma­te­rial im­pact on the bot­tom line num­ber in our view,” he said.

An­sari said that quar­ter-on­quar­ter growth was ex­pected given the fourth quar­ter was typ­i­cally a high tourist sea­son, and that the growth would be “likely to per­sist” in the first quar­ter of this year.

The com­pany’s cur­rent fourthquar­ter es­ti­mate for rev­enue and net loss stands at $51 mil­lion and $80 mil­lion, re­spec­tively.

A Jan.24 note from Arqaam Cap­i­tal fore­casted that foot­fall would be closer to 2.2 mil­lion vis­i­tors in the full-year 2017. While it es­ti­mated foot­fall to reach 3.3 mil­lion in full-year 2018, Arqaam an­a­lysts warn the ris­ing vis­i­tor num­bers need to gen­er­ate in­creased rev­enues, too.

“Foot­fall has be­gun to im­prove in third quar­ter 2017, but theme park rev­enues dropped 21 per­cent quar­ter-on-quar­ter, sig­nal­ing that vis­i­tor mon­e­ti­za­tion is a key chal­lenge. This is a re­sult of re­duced pric­ing, ho­tel park­in­cen­tives and growth in an­nual passes,” said the Arqaam Cap­i­tal note.

DXB En­ter­tain­ments said last year it was sim­pli­fy­ing the pric­ing struc­ture to fo­cus on re­peat vis­its from res­i­dents in the Gulf re­gion.

The com­pany owns Dubai Parks and Re­sorts, with five theme parks — the Six Flags Dubai is still un­der de­vel­op­ment; two ho­tels (one un­der de­vel­op­ment) and a re­tail and din­ing fa­cil­ity.

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