DXB Entertainments’ outlook brightens on rising theme park visitors

Legoland Dubai, part of Dubai Parks and Resorts - the region's largest integrated theme park destination - recently opened Submarine Adventure, an educational underwater journey for families. (DXB Entertainments)

LONDON: The popularity of the new Dubai Parks and Resorts theme parks is picking up with the number of people visiting the attraction reaching its highest level to date in the fourth quarter last year.
The increase is likely to bolster the outlook for park owner DXB Entertainments which posted a quarterly loss of $56.3 million and a year-to-date loss of $234 million in the third quarter of 2017.
Revenues in Q3 also slipped to $31 million in the third quarter from $33 million and $44 million in the respective two preceding quarters.
The Dubai-based theme parks were first launched in late 2016, with all of the rides and attractions across four parks — including those themed around the movie franchise The Hunger Games — fully open to the public in the fourth quarter of last year.
A total of 796,000 visitors entered the park in Q4 2017, marking a 66 percent increase on the previous quarter, according to a 30 Jan. company statement on the Dubai Stock Exchange.
“During 2017 we recorded close to 2.3 million visits, with the fourth quarter delivering our highest visitation to date, a clear sign of progress against our strategic plan and a reflection of the new pricing and marketing strategy implemented in September last year,” said Mohamed Almulla, CEO and managing director, DXB Entertainments in a statement.
The hike in visitors exceeded some analysts’ expectations. “The visitor arrival number is four percent higher than our fourth-quarter 2017 estimate of 765,000,” said Ayub Ansari, senior analyst at SICO Bahrain, in a research note sent to Arab News.
“Better than expected park arrivals could lead to better surprise on the topline number; no material impact on the bottom line number in our view,” he said.
Ansari said that quarter-on-quarter growth was expected given the fourth quarter is typically a high tourist season, and that the growth would be “likely to persist” in the first quarter of this year.
The company’s current fourth-quarter estimate for revenue and net loss stands at $51 million and $80 million respectively.
A Jan.24 note from Arqaam Capital forecasted that footfall would be closer to 2.2 million visitors in the full-year 2017. While it estimated footfall to reach 3.3 million in full-year 2018, Arqaam analysts warn the rising visitor numbers need to generate increased revenues too.
“Footfall has begun to improve in third quarter 2017, but theme park revenues dropped 21 percent quarter-on-quarter, signalling that visitor monetization is a key challenge. This is a result of reduced pricing, hotel park-incentives and growth in annual passes,” said the Arqaam Capital note.
DXE Entertainments said last year it was simplifying the pricing structure to focus on repeat visits from residents in the Gulf region.
DXB Entertainments is the owner of Dubai Parks and Resorts, with five theme parks — the Six Flags Dubai is still under development; two hotels (one under development) and a retail and dining facility.