Middle East theme park industry: Boom or bust?
ITPS President Dennis Speigel has one word to describe the Middle East’s theme park licensing frenzy years ago: ludicrous. And continuing on the same merits would only restart the vicious cycle.
December 18, 2011 4:55 by kippreport
The theme park industry has marched its way around the world. Emanating from the USA in the mid-1950s, with the launch and opening of Disneyland, the USA saw basic theme park market saturation through the early 1980s.
The movement then went overseas. It went to Europe, with a lot of parks hitting and some missing the mark. Parks developed during this time were Parc Asterix, EuroDisney, Warner Bros, Port Aventura, Le Nouveau Monde Des Schtroumpfs, and Futuroscope. It also continued to march throughout Asia, with parks being built in Japan, Korea, Singapore, Indonesia, Thailand, and the Philippines.
As the pendulum continued to swing, things started heating up in South America. And by the millennium, the movement headed to the Middle East.
Experiencing a development boom at the time, the Middle East drew operators from all over the world. It was a “licensing frenzy” with Sea World, Universal, Warner Bros, Six Flags, Marvel, Paramount, Dreamworks trying to jump on the bandwagon – just to name a few.
In Dubai alone—a city of more than 1.2 million people during the pre-boom—there were over 13 theme parks ranging from $400 million to $3.5 billion planned. Ludicrous.
‘DUBAI WAS NOT ORLANDO’
What was happening was Middle Eastern developers were caught up in the licensing frenzy to tie up theme parks for the eventual boom that was to come. It was unlike anything we have ever seen in our industry. There was no real foundation or reason for the parks to be developed. The market was not there, the infrastructure was not there, and Dubai had not yet been established as a tourism hub. Dubai was not Orlando.
When the economy tanked, so did all of these projects. No surprise. Not much has changed in the market or region to once again launch such development. In fact, with the reports about the dismal attendance at Ferrari World during its first year of operation, one has to wonder about the future of this enormous project.
We have learned in the industry, you cannot force a market. Orlando has literally taken 40 years to reach the proportion it has to date. It has grown on the basis of supply and demand. It has seen both lean and successful times over the last 40 years. One thing the Orlando market has always done is continue an upward trend in infrastructure and tourism. Both of these support the 50 million people who visit Orlando each year.
DEMAND VS SUPPLY DILEMMA
The Middle East certainly has cities and markets that can support their parks. The keys are proper sizing and proper investment levels. It is important not to over-size or over-invest, lest the market cannot support the attraction. There is no need for numerous projects in a developing market. Let demand pave the way for expansion. You cannot force a market to develop, but you can nurture its growth. It would have taken 40 to 50 years of continued tourist development for Dubai to have supported all of these parks initially proposed – and that considers that people could have had all of the necessary amenities to accommodate their stay.
In developing a theme park, a proper feasibility analysis must be conducted – a process and formula which dates back to the early 1950s when Harrison “Buzz” Price did the first theme park project study for Walt Disney. That process is basically the same formula used to study markets today, and it provides the project’s foundation or “roadmap.”
I ask, “what would have ever made the developers during the boom time in Dubai believe that 13 theme parks would be successful?” It was unrealistic on their part. As I stated, it was really just an intellectual licensing roll-up by developers and operators.
When planning a new project, the following are the 12 basic steps of development for leisure project development:
1. Feasibility Analysis
2. Masterplan Programming
3. Preliminary Concept Design
4. Final Concept Design
5. Schematic Design
6. Detail Design
7. Production and Construction Documents
8. Production and Construction
9. Installation and Testing
11. Grand Opening
12. Rehabilitation / Expansion
Simply stated, if this12-step process is followed, it will properly pave the way and act as a guide for the development process. At ITPS, we have successfully followed this approach for 30 years, allowing these 12 steps to guide us through the successful development and opening of many projects.
The Middle East will see development of leisure when markets and economic conditions are proper for development. As mentioned earlier, proper sizing and proper investment levels are keys to the potential success of any planned project.
Dennis Speigel is the President of US-based International Theme Park Services, Inc.
Photo of Universal Studios Dubailand arch taken from themeparkguy.com
Photo of Ferrari World’s Junior Training Camp taken from Ferrari World’s Media Centre