Grand and ambitious plans for theme parks, destination resorts, huge aquariums and glittering hotels and waterparks are all the talk in Dubai. But how will these schemes work and how will success be measured? The following article appeared in the Themed Entertainment Association's annual report...
When Elizabeth Taylor bumped into Princess Margaret many years ago at a wedding, the royal was rather stunned by Taylor's ring - a great chunk of a diamond, and utterly vulgar in the opinion of the princess. "Why don't you try it on?" Taylor offered coyly. Margaret obliged, and the two stood for a moment, taking in the brilliant, sparkling rock. "Not so vulgar now, is it?" Taylor said.
This favorite celebrity tale sums up how I feel about Dubai. I can sympathize with those who feel it is perhaps a little glitzy and ostentatious... but my, oh my, how it sparkles and beguiles close up!
By Charles Read
Dubai is one of the seven emirates which make up the United Arab Emirates (UAE) and is located along the southern coast of the Persian Gulf on the Arabian Peninsula. Once a small fishing village, it has effected a staggering transformation in as little as 20 years into a bustling, thriving city, working rapidly to establish itself as an international entertainment and cultural capital. Fueled (literally) by its vast oil wealth, the emirate has set out to become the world’s leading leisure destination.
So from the perspective of the themed entertainment business, how is Dubai doing? Billions of dollars’ worth of leisure projects are on the table. By looking at those projects that have made it from concept to completion, we can begin to observe what factors will spell success in bringing about the planned transformation of Dubai and the UAE.
A combination of good business practices and attention to supply and demand stand out for Darrell Metzger (right), Sr. VP - Venetian Resort (Macau). He cites two examples: Ski Dubai, an indoor skiing attraction that opened in 2005, and the $1.5 billion Atlantis Resort, which opened this September. “Both are billion dollar projects and have used experienced consultants and designers, been well financed, professionally designed and built, and have filled a market void,” says Metzger, whose previous position was CEO of Dubai’s Ruwaad Destinations, a UAE-based real estate, hospitality and tourism investment and development company.
John Cussen(left), General Manager of Amusement Whitewater is in no doubt as to why Atlantis looks set to succeed in the long term. “First class management from the client, payments always on time with no disputes, and motivated, co-operating teams,” Cussen explains. AWW is a themed construction company involved in the Atlantis Resort, Dubailand (a gigantic complex of multiple theme parks and attractions, still in development/construction stages) and the Palms (a manmade island resort, still under construction). Indeed, at this writing, according to Atlantis resort Vice president of Marine Activities, Peter Doyle, Atlantis has been consistently exceeding its projected attendance.
Land value is also a primary factor, according to Martin Barratt (right) of Vision XS, a UK-based consultancy working with a number of major clients in the Gulf. “They are making their money from the increasing value of the land rather than from the attractions themselves,” he says. “It is hard to see how most of the attraction developments could be successful as standalones.”
Metzger’s and Cussen’s remarks imply that a solid, professional business culture, evident throughout the construction and design phase of a project, augurs well for success in the operations stage. But operations does usher in new challenges, especially in regard to manpower. Cussen says, in regard to Dubailand, “The biggest problems will come if the contracts all start together. Where will they get the skilled staff from?”
A recent article in the Saudi Gazette indicates that a shortage of skilled professionals is driving area salaries through the roof and may jeopardize some project budgets. Raed S. Haddad, senior vice president of corporate programs for ESI International, a leading business analysis company in the area, told the Gazette that "industry leaders in the Middle East cannot simply 'buy-in' the expertise they need. To sustain the current level of development, talent must be produced from within, through training and development programs.” The Gazette also reported that, according to database company Proleads, the total number of active civil engineering and infrastructure projects taking place in the GCC [Gulf Cooperation Council] countries is close to 2,081 with a combined value of $1.3 trillion and quoted Haddad saying, "The sheer scale of all this activity is putting severe strain on the viability of some projects. For example, ETA Star Group recently announced that their Dubai Lifestyle City project had increased from an initial $2.4 billion to $4 billion. The significant proportion of that was consultancy fees which had risen anywhere from 40% - 70%.”
The situation of the laborers who built and are building the new Dubai also raises questions. Worker’s rights are high on the agenda in a country where 80% of the 1.3 million population are expatriates and tens of thousands work illegally (the UN recently estimated that the UAE was home to over 300,000 illegal immigrants).
It’s reasonable to speculate that not everything on Dubai’s drawing board is going to materialize. A Sept 2008 report in the UAE-based Gulf News estimates that only 44% of development projects due to open last year actually opened. But some of the projects forecast are truly tantalizing in terms of what they will add to the worldwide attractions mix.
Metzger thinks the most exciting projects are “those that have never been built before. We are all quite familiar with parks such as Universal Studios, SeaWorld, Six Flags, etc. But what does a DreamWorks park [projected opening: 2011] look like? A Marvel park , a Ferrari park , a Formula One park ? These should be creative and innovative concepts.”
Cussen is confident that once complete, Dubailand alone (the mega- theme park complex set to be twice the size of Florida’s Disney World, of which some of the above parks will be components) will “compete with Orlando as a main themed tourist attraction.” He is also looking forward to the opening of The Palms in two to three years. “It’s never been done before and many said it couldn’t be done. There are huge technical challenges, but it is almost there.” He is bullish about Dubai’s future, “Seven years ago nobody believed that [these projects] could be done. Now it is taken for granted that if Sheikh Mohammed is behind a project it will fly. He has extraordinary vision and the cash to support it.”
“Legoland [forecast to open in 2011] has the best chance of success,” according to Martin Barratt, “because the Lego development team will make sure it is commercially viable.”
The mood in Dubai seems upbeat despite the recent global economic turmoil. Indeed, the emirate recently announced a project to build the world’s tallest building at the Nakheel port and harbor complex, a tower more than a kilometer high and almost three times higher than the Empire State building. This is a bold and confident statement in these uncertain times. In truth though, no one really knows what will happen. There are simply too many variables. But, like the diamond on Liz Taylor’s finger, Dubai and its extravagant plans continue to entice and beguile.
Charles Read (Charles.Read@blooloop.com) is Managing Director of Blooloop.com, a web-based publication serving the attractions industry.
This article originally appeared in the 2009 TEA Annual & Directory, published by the Themed Entertainment Association
Image: Jeffrey Katzenberg shakes hands with Saeed al Muntafiq as their two companies arrange to build a Dream Works theme park in the UAE.
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