Prepared remarks of Charlie Bray, President & CEO Intl. Assoc. of Amusement Parks and Attractions,for a panel on the “State of the Industry Worldwide and in the Middle East” at Tourism Development Projects & Investment Market (TDIM) '08 Sunday, January 20, 2008 Dubai, United Arab Emirates.
Thank you for that generous welcome, and to the organizers of TDIM ’08 for having us here. It is indeed a pleasure to be with you this afternoon to participate in this impressive and important event. I fully appreciate the various demands on your time, so I hope you’ll find our discussion on the state of today’s attractions industry both interesting and beneficial.
I want to begin by introducing our panelists, all of whom are leaders in the global attractions business. First, we have Bob Masterson, Chairman of Ripley Entertainment and current Chair of IAAPA. Next is Darrell Metzger, CEO of Ruwaad Destinations here in Dubai and First Vice Chair of IAAPA. And then Keith James, President of the renowned attractions design firm Jack Rouse Associates. We appreciate you sharing your time and expertise with us today, gentlemen.
Now, before we get into our panel discussion, I want to set the stage with a few comments about IAAPA and some brief observations on the state of the attractions industry today, both worldwide and in the Middle East region.
Founded in 1918, IAAPA is the largest international trade association for attractions and their suppliers. Over 40 percent of our facility members are from outside the U.S., and our Global Alliance partnerships help us to further grow and professionalize the industry around the world. IAAPA is also leading the way in industry safety, and in bringing buyers and sellers together at our three premier trade shows. These efforts are as essential and timely as ever, if not more so.
Worldwide Outlook is Strong
In the past few years, the international travel and tourism sector has faced several major challenges, from the Iraq war to health scares to high fuel prices to security concerns. Fortunately, the fundamentals of the global leisure business remain strong and full of promise, with many significant new projects ongoing around the world. In the amusement and theme park sector alone, hundreds of new rides and other attractions are opening this year worldwide.
As the number of people with both leisure time and discretionary income seems poised to continue rising globally in the future, the World Travel & Tourism Council expects substantial growth worldwide in 2008 and beyond, at 4.3 percent annually over the next 10 years, as you just heard from Mr. Baumgarten. And tourism in some countries in Asia and the Middle East has been expanding at nearly twice the rate (6% to 8%) of the world average. In fact, tourism is the fastest growing economic sector worldwide today!
Within this expanding sector, the amusement and attractions segment is expected to contribute its own steady increase. Fueled by vibrant expansion in nations throughout the Middle East, Asia, and elsewhere, the global attractions and leisure business is expected to grow significantly. Worldwide visitation was up again in 2007, and consumer spending on theme parks is slated to rise by nearly five percent annually through 2011 – resulting in a $28.5 billion industry.
This increase will be led by the two fastest-growing attractions markets today: the Middle East and Asia. According to PricewaterhouseCoopers, the annual growth rate for the amusement sector in the Middle East – Europe – Africa region is slated to be over 5 percent through 2011, raising yearly attendance to 154 million in just four years, with much of that growth coming in the Middle East. Construction of new facilities across the region, particularly in the United Arab Emirates and Eastern Europe, will provide the fresh experiences that lead to this expected rise in attendance and guest spending. These investments range from the Dubailand mega-project here in Dubai to the World Gardens theme complex in Qatar to a host of new family recreation centers in Saudi Arabia.
In the Asia Pacific region, a 5.5 percent yearly growth rate over the next half-decade will push its share of the industry’s global revenues to more than $8 billion. Much of this regional growth will be driven by the continued rapid development of the amusement and leisure segment in China, which is predicted to expand nearly 7 percent a year through 2011. Over the next five years, a host of Asian projects financed by both local and overseas investors – such as the Fanta Wild Adventure theme park in China – are scheduled to be joined by Universal Studios parks in Singapore and South Korea, as well as a Paramount Pictures-themed park in South Korea.
The U.S. attractions sector will increase its revenue by nearly 4 percent a year during this period, and will remain the world’s largest leisure market, worth $14 billion by 2011. Regular infusions of capital investment for new rides and attractions will fuel both attendance and visitor spending, along with entire new facilities like Hard Rock Park in Myrtle Beach, SeaWorld Orlando’s Aquatica waterpark, and Schlitterbahn Vacation Village in Kansas City.
In Latin America, the attractions segment is slated to grow by nearly 5 percent annually over the next five years, based on steadily rising disposable income across the region and new small-park openings like Divercity and Vertigo Park, both in Colombia, and Aventura Selvagem in Brazil.
Equally important, industry manufacturers and suppliers have been generally pleased with the amount of work they’ve obtained during IAAPA’s three trade shows over the past year, and business is increasing in the service sectors that do the initial work in developing facilities.
Strong Industry Growth Predicted for the Middle East
The upward trend in industry growth globally mirrors that which continues to charge ahead here in the Middle East, one of the most dynamic leisure and attractions markets today.
At the broadest level, some regional analysts are projecting upwards of $3 trillion in spending on leisure & tourism projects and supporting infrastructure over the next twenty years.
Within this overall tourism sector, current estimates put the region’s attractions, entertainment, and leisure segment at $10 billion in annual revenues already, with yearly growth at 20-25 percent. These projections are bolstered by reports from our industry of 5-10 percent of all new retail space being dedicated to family entertainment and amusement offerings, and by the several billions of dollars in investment already committed to building Middle East parks and attractions.
In fact, the potential for more and more visitors to this region’s attractions is so great that PricewaterhouseCoopers anticipates the $50 million in guest spending at parks and attractions in the Middle East in 2009 will swiftly quadruple to over $200 million a year by 2011. The reason, clearly, is the sheer number of exciting and incredible projects on the horizon.
In addition to Dubailand and all its dazzling elements, including Restless Planet and Universal Studios Dubailand, here is just a sample of the region’s many other parks and attractions that are scheduled to open in the next few years:
- Ferrari World in Abu Dhabi;
- Entertainment City in Qatar;
- Aquaventure waterpark at Atlantis – The Palm in Dubai;
- a Warner Brothers-themed park in Abu Dhabi;
- the WOW RAK theme park complex in Ras Al Khaimah; and
- a Paramount Pictures-branded theme park here in Dubai.
Not to mention the recent openings of the Lost Paradise of Dilmun waterpark in Bahrain, and the E-Zone entertainment center at the CityStars Cairo complex in Egypt.
Most, if not all, of these projects are part of super-destinations and mega-resorts, whose rise within our industry have taken themed immersion to a whole new level and will likely influence its development for years to come. Combining rides, shopping, water activities, entertainment, dining, and hotels all in one site is a great way to satisfy many vacationers’ desires for some variety in their stay, and thus extend that stay into a complete escape of 3, 4, 5, even 7 days.
Now, I mentioned earlier that tourism growth in some countries in Asia and the Middle East has averaged nearly twice that of the world average. And certainly the number of exciting projects I have just described suggests a wonderland of leisure and entertainment. But just how successful will the Middle East leisure sector really be in capitalizing on this disproportionate growth? Will the quality of these products and experiences be at a level that will promote sustainable growth?
The key is ensuring that the necessary conditions are in place to take full advantage of this flood of interest and investment. Last year, the World Economic Forum’s first annual Travel and Tourism Competitiveness Report placed the UAE 18th out of 124 nations, the highest ranking for any Middle East country, with a tourism sector that represents more than 12 percent of its gross domestic product and is expected to grow over 5 percent a year for the next decade. And yet, the only other regional state to score in the top half was Bahrain at 47, while all other Middle Eastern nations ranked in the bottom half of the table.
So how does the UAE move into the top 10, and others of this region move into the upper half or third? With tourism growth twice that of the rest of the world, how does this region provide a competitive destination experience? Factors to consider include government support, foreign ownership & investment, environmental issues, intellectual property rights, safety, and health & human resources challenges … some of which our panelists will address in just a moment.
I encourage you to seize the opportunities, for it is indeed an exciting time to be a part of the booming attractions and leisure business in this region. The vast potential of this market is evident in the added number of manufacturers establishing dedicated representatives here, the introduction of new industry trade shows such as this one, and coming events like IAAPA’s first Middle East Safety Conference next month and the World Waterpark Association’s Middle Eastern Symposium in April, both taking place here in Dubai. Clearly, there is a lot happening.
So let’s jump right into our discussion now, with the first topic for our panelists. …
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