Dubai theme park operator reviews strategy as losses pile up
(8/10/2017 5:49:00 AM)
Mounting losses at DXB Entertainments (DXBE) have led the theme park operator to reorganize its business less than a year after opening its doors.
The Dubai-listed operator of four theme parks, located in the Jebel Ali district of the city, said it lost 286.2 million dirhams ($77.9 million) in the second quarter, compared with 41.3 million dirhams a year earlier. The stock was trading about 2.5 percent lower Wednesday afternoon. The company offered rent “relief” to tenants at the park during the peak summer months as the hot weather kept visitors away.
Under plans announced on Wednesday, the business will be reorganized in three main segments: Theme parks, family entertainment centers, and retail and hospitality. DXBE said it had also entered into a management agreement with Meraas to manage entertainment assets including Hub Zero, Splash Pad, The Green Planet, Mattel Play Town and Roxy Cinemas.
“We are reorganizing the business into three operating business units, which aligns DXBE with our strategic growth objectives,” said CEO Mohamed Almulla.
Dubai attracted 8.06 million overnight tourists in the first half of the year, up more than 10 percent on the same period a year earlier, according to figures from the emirate’s Department of Tourism and Commerce Marketing.
India was the source of the largest number of visitors in the first half, crossing the 1-million mark for the first time — an increase of more than 21 percent on a year earlier. Visitors from Saudi Arabia were in second place, followed by the UK.
Dubai’s tourism economy has come under pressure from the strong dollar, to which the dirham is pegged, which makes it more expensive for many tourists visiting the emirate. That has had an impact on theme parks, hotels and shopping centers.
DXBE also announced a management shakeup, bringing in Ahmad Hussain bin Essa as its general manager of theme parks. He was previously CEO of Global Village, a seasonal themed attraction located in Dubailand.
DXBE has also hired Hani Soubra as its vice president of marketing as it seeks to boost its profile and attract more visitors. He previously worked for the BBC in commercial development in the region.
The company also revealed the departure of senior executives, including Klaus Assman, Stanford Pinto, Matt Priddy and Paul La France.
Dubai Parks and Resorts attracted more than 1 million visits during the first six months of the year, with about 414,400 visits during the second quarter.
DXBE said it was progressing well toward achieving a 20 percent operational cost reduction compared with initial projections.
“For the remainder of 2017 and into 2018, our primary strategy for Dubai Parks and Resorts is to drive visitor volumes, focusing on repeat visitation from the resident and regional markets,” said Almulla.
“We are in the process of simplifying our pricing structure and revising our annual pass offering to include competitive pricing, special offers and an attractive package of additional discounts and benefits.”