Theme park prospects up
SEES REVENUE, VISITOR NUMBER GAINS FROM RIDES OPENING AND REVISED TICKET RATES
Dubai Parks operator eyes breakthrough run this year |
Arevised ticket pricing strategy and peak seasonal demand during December ensured DXB Entertainments, the theme park operator, close 2017 on a relative high. The fourth-quarter visits to Dubai Parks totalled 795,746, up 66 per cent on third quarter 2017, while revenues were Dh157 million.
This brought total visitors for 2017 to 2.3 million and revenues of Dh552 million. Net loss for the year was Dh1.116 billion, in part due to a Dh478 million “non-cash depreciation expense”. According to the operator, such a depreciation charge is “normal for a largescale project of this nature”.
“What we did with the ticket changes was simplify it for consumers and bring in consistency on the pricing to avoid confusion,” said Mohammad Al Mulla, CEO and Managing Director, DXB Entertainments. “We’ve got the annual pass programme going to build up awareness. And when you create more engagements with the product, the number of visits will increase.
“In many ways, 2018 will be the first full year of operations because for the better part of 2017, not all parts of the park were fully operational. Now that they are, we can start focusing on [marketing more aggressively] to the international markets.”
Last year, of the overall visitor count, 70 per cent were from within the UAE. In the theme park industry, destinations tend to make money when overseas visitor numbers are on par or even higher than the domestic.
Ahead of Dubai Parks’ opening in late 2016, projections were for 2017 to pull in more than 6 million visitors.
The ticketing changes — signed off in September last — impact was most directly felt in the December figures.
That month had the “highest daily visitation to date, with an average of over 20,000 visits in the last 10 days (of the year) and peak daily visits approaching 27,000”, the operator said in a statement. In the second and third quarters visitor numbers were 414,000 and 479,000 respectively.
Another boost
Another boost was provided by the completion of all rides within Phase 1 during the fourth quarter. “In 2017 we focused on revising our pricing and marketing strategy to ensure we continue to drive footfall and are well positioned to generate long-term returns,” said Al Mulla in a statement. “Simultaneously, we optimised our cost structure and delivered operational synergies.”
But the change to ticket prices also brought on “marginally” lower theme park revenues on a per capita basis — Dh138 in the fourth quarter compared to the third quarter’s Dh142.
On the expenses side, the operator is incurring costs related to the Dh4.2 billion debt it has on the books. These funds were taken for constructing and delivering Phase I.
“To accurately measure the operational performance of the business, we continue to focus on improving our operational EBITDA (earnings before interest, taxes, depreciation and amortisation),” the company said. The EBITDA loss in 2017 was Dh422 million, and there was some improvement from a 33 per cent gain in the fourth quarter compared to the third.
“Our operating costs have been steadily decreasing each quarter from Dh284 million in first quarter 2017 to Dh211 million in the fourth quarter,” said Al Mulla.