Mena leisure industry faces $80.5B Covid hit, seeks help
Issac John dubai — The leisure, entertainment and attractions sector of the Middle East and North Africa region, a major contributor to Mena’s $237 billion aviation, tourism and leisure industry, is losing an average of $6.71 billion per month ($80.58 billion a year) in business due to the impact of Coronavirus outbreak, according to the World Travel and Tourism Council.
The lockdown of theme parks, amusement parks and family entertainment centres since the second week of March 2020 is likely to cost not only billions of dollars in revenues but also millions of jobs if the crisis continues for a longer than expected period of time, says Middle East and North Africa Leisure Attractions Council (Menalac).
The industry body, representing the Middle East’s growing leisure attractions sector, has asked its members to assess their losses in order to seek remedies from the respective governments to help the industry minimise the financial impact of the lockdown.
“With the complete shutdown, our industry is currently in an extremely difficult position and if this crisis lingers for a prolonged period of time, many leisure entertainment attractions may find it very difficult to operate in a sustainable way and will have to reassess their business models and viabilities,” said Silvio Liedtke, vice-president of Menalac and CEO of Landmark Leisure.
Prior to the pandemic crisis, the leisure entertainment attractions industry was the fastest-growing region, powered by the new theme parks that were opened between 2016 and 2018.
Prakash Vivekanand, secretary-general of Menalac, said Mena has one of the most vibrant and fastest-growing leisure entertainment attractions industries in the world with massive investment planned to develop new indoor leisure destinations, mixed use leisure reports as well as theme parks and waterparks across the region in the next few years.
“Our industry is very sensitive to such health-related outbreaks and we had witnessed 50-80 per cent revenue losses from operations since the second week of February before going into full temporary closure in March 2020 as mandated by the authorities. When we eventually re-open, it will take us a period of time before normal cash flow from the business resumes.”
“Given the nature of our industry, the period leading to re-opening itself will require additional investment into sanitisation, PPE, additional staff training and many other such measures to ensure the safety of our guests,” Vivekanand said.
“We urgently need support from our governments in the form of debt relief, repayment waivers, rent waivers, utility rebates and a cash flow support to meet our immediate staff and operating costs, sanitisation and upkeep of our facilities. The governments in the region have already initiated some steps in this direction and we are indeed thankful and grateful to them. Reduction in residence visa costs. a VAT Holiday until the end of the year, import duty rebates will all help our industry to revive and also pass on incentives to the consumer, who is also affected by this crisis.”
In the Middle East, travel and tourism represents 8.7 per cent of the region’s gross domestic product and supports 5.4 million jobs. In North Africa, the sector represents 11.2 per cent of the region’s GDP, and supports 5.6 million or 10.4 per cent of all jobs, WTTC research shows. A report released by WGA, a consultancy that specialises in the entertainment, forecast spending in Mena leisure centres will more than double from $266 million in 2018 to $609 million by 2023.
Our Industry is currently in an extremely difficult position and if this crisis lingers for a prolonged period of time, many leisure entertainment attractions may find it very difficult to operate
Silvio Liedtke, CEO of Landmark Leisure
Mena has one of the most vibrant and fastest-growing leisure entertainment attractions industries in the world
Prakash Vivekanand, Secretary-general of Menalac