Dubai Parks and Resorts on track to profit in 2018: CEO

The vision behind the launch of Dubai Parks and Resorts is now starting to come to fruition. Nearly 90 percent of the construction work has been completed on the company’s AED 10 billion mega-theme parks complex, which will be home to Motiongate, Bollywood Parks, and Legoland when it opens later this year. The company’s chief executive Raed Al Nuaimi recently spoke to Argaam about the firm’s journey since listing on the Dubai Financial Market (DFM) in 2014, as well as the challenges of doing business in a relatively untapped industry.

Q: What were the main objectives behind the company's rights issue on DFM? How will the funds support your existing projects and expansion plans?

A: Dubai Parks and Resorts has successfully raised AED 2.67 billion to primarily fund the development of its fourth theme park, Six Flags Dubai, within the existing Dubai Parks and Resorts destination. The addition of a Six Flags branded theme park will further establish Dubai Parks and Resorts’ position as the region’s largest integrated theme park destination.

Six Flags is one of the world’s largest amusement park corporations and when it opens in Q4 2019, Six Flags Dubai will be the first of its kind in the region and have close to 27 rides and attractions. This means we will be able to strengthen the appeal of our destination, attracting thrill seekers of all ages, to complement our existing offering.

None of the funds raised will be used to fund the existing Dubai Parks and Resorts development expected to open in October this year.

Q: How much revenue do you expect the mega theme parks project to generate after it's fully completed, and when do you expect it to break even?

A: Dubai Parks and Resorts is projecting 6.7 million visits in its full year of operations in 2017, generating AED 2.4 billion in revenue. We expect to be net income positive in 2018.

Q: What are the biggest challenges associated with building such a massive project in a largely untapped industry?

A: Of course any development of this size will face challenges, but we have a very experienced team of professionals with over 500 years of combined theme park experience on board, spearheading the project. One challenge we faced were delays to other global theme park projects, causing a knock-on effect to Dubai Parks and Resorts as in some instances we work with a relatively small pool of qualified suppliers in our highly specialised industry. 

Q: How much will Dubai Parks and Resorts rely on tourist traffic from within the GCC, and specifically visitors from Saudi Arabia?

A: Dubai is ideally located within a four hour flight radius of three billion people and many countries within this radius do not have convenient access to world-class entertainment options.

We know Dubai is a popular destination for tourists from Saudi Arabia. We hope to appeal to regular Saudi visitors as well as encouraging more leisure travellers from the country to choose Dubai for their family vacation.

Q: How do you see the tourism sector in Dubai moving over 2016-17, in light of lower tourist numbers from China and Russia?

A: Despite global economic pressure, the number of international visitors reaching Dubai continues to increase. Dubai’s Tourism Vision 2020 is a blueprint for Dubai to double its double its annual visitor numbers from 10 million a year in 2012 to 20 million a year in 2020. Since announcing the vision, Dubai has achieved its targets consistently with international visitors to Dubai reaching 14.2 million in 2015, an increase of 7.5 percent on 2014, despite the challenging global economic environment.

Write to Joumana Saad at joumana.saad@argaamplus.com