By Mohanad Alwadiya
CEO, Harbor Real Estate
Senior Advisor & Instructor, Dubai Real Estate Institute
Well, Dubai has done it again!!
The latest addition to a city already swelling with entertainment and activity alternatives is the IMG Worlds of Adventure. This amusement park took three years to build and cost more than 3.6 billion dirhams. To be labelled “the world’s largest indoor theme park” is no idle boast, with the complex covering over 1.5 million square feet or around 20 times the size of the pitch at Emirates Stadium in London.
And, wait for it… there is more to come…
The next six months should see an even bigger development which, built at a cost approaching 10 billion dirhams, will include such entertainment icons as LEGOLAND and Bollywood, and a giant water park.
Dubai has always considered tourism to be a key, increasingly successful and lucrative pillar to the economy, but -the latest additions to its suite of attractions are taking the emirates’ capability to satisfy the appetite of those who pursue world-class entertainment and amusement to a whole new level.
The new theme parks will play a key role in ensuring the emirates’ target of 20 million visitors will be visiting the emirate annually from 2021 will be achieved. Very impressive stuff!
But the reason why I love these latest theme parks is not because I enjoy rollercoaster rides… I will leave that to the more adventurous. I am excited at the effect these fantastic initiatives will have on the economy and, more specifically, the property industry that is so close to my heart.
From an economic point of view, this is very serious business indeed!
Aside from the obvious direct benefits of tens of billions of dirhams being invested into the economy, few people realize the enormous economic contribution theme parks make to the overall economy post launch. It is a cliché, but the world is a small place and the war for providing entrepreneurial and employment opportunities is waged on a global battleground, and a successful entertainment and amusement industry is just one economic weapon that Dubai can employ to great effect.
And being a global growth industry, participation cannot be ignored. Consider the following figures sourced from the TEA/AECOM 2015 Theme Index and Museum Index:
In 2015, there were…
… 420 million visits to attractions run by the Top 10 global theme park groups, up by 7.2 percent.
… 236 million visits to the Top 25 amusement/theme parks worldwide, up by 5.4 percent.
… 146 million visits to the Top 20 amusement/theme parks in North America, up by 5.9 percent.
… 131 million visits to the Top 20 amusement/theme parks in Asia-Pacific, up by 6.9 percent.
… 61 million visits to the Top 20 amusement/theme parks in Europe, Middle East and Africa, up by 2.8 percent.
… 29 million visits to the Top 20 water parks worldwide, up by 3.7 percent.
In a world that is struggling to generate any form of impressive economic growth, the growth within this industry is truly commendable.
Without a doubt, the current world leader with regard to amusement parks is the southern US state of Florida. It’s a fact that theme parks are a major reason why people visit this American state. Here are the top theme parks in Florida and the number of annual visitors they attracted in 2014 according to the TEA/AECOM Theme and Museum Index:
… Magic Kingdom – 19.3 million
… Epcot -11.5 million
… Disney’s Animal Kingdom – 10.4 million
… Disney Hollywood Studios – 10.3 million
… Universal Studios – 8.2 million
… Islands of Adventure at Universal Studios – 8.1 million
… SeaWorld – 4.7 million
… Busch Gardens Tampa Bay – 4.1 million
Truly impressive numbers which only highlight just how the economic advantages that are created by having such a robust entertainment industry is staggering. The state estimates tourism brings in a whopping $82 billion in visitor spending while the State Department of Economic Opportunity says that of the approximately 9.1 million workers in Florida, 1.1 million of them hold jobs directly attributed to tourism. That’s better than 1 worker in 10!
Obviously, the job creation potential of this industry, both direct and indirect, is staggering… which is why I love amusement parks.
Most commentators would relate to the increased building activity that such projects would create; however, the true long-term value of these projects lies in the long-term economic advantages of employing people and creating commercial activities in order to develop a unique capability to entertain the families and youth of the region and beyond.
The local market offers significant opportunity. The GCC, with a total population of just over 40 million people, has one of the youngest populations in the world. Approximately 50 percent of the population in the Arabian Peninsula is below 25 years of age. What a wonderful opportunity this represents for Dubai! The possibility exists for the construction of the only mega family entertainment destination in over 2,500,000 square kilometres of territory. From an economic point of view, the provision of memorable entertainment experiences for the youth and families of the region will have a multiplier effect on the economy as a whole, including the real estate industry.