Middle East Lacks Adequate Theme Park Hotels – Report

There are close to 45 attractions and waterparks operating in the GCC region at present, according to a report by Colliers, with plans for several more, including the world’s largest indoor theme park, which is coming up in the Mall of the World development in Dubai.

However, while the Middle East region doesn’t lack amusement and entertainment centres, the concept of having lodging facilities within or close to the destination is still underdeveloped, the report found.

“A limited number of attractions have a dedicated hotel catering to visitor demand, i.e. Dreamland Aqua Park in Umm Al Quwain, UAE, provides cabins and tents within the park for overnight guests, primarily catering to families,” it said.

Traditionally, leisure attractions have been developed to support existing hotel resorts in the region, such as the Aquaventure waterpark in Atlantis, Dubai. This is done to enhance a guest’s resort experience and increase their length of stay in the specific resort.

However, with a number of large-scale major theme parks under construction, developers and investors should look to build hotels in and around these developments to support the destination and capitalise on the constant flow of tourists, the report recommended.

Filippo Sona, head of Hotels at Colliers International MENA said: “Having visitors stay within the vicinity can extend their length of stay and increase the tendency of repeat visits, which generates significantly larger returns than from theme parks alone.”

According to global research, theme park hotels located within the theme park (inner-circle theme park hotels) trade at an average occupancy level of two to 10 percentage points higher than city hotels.

Although targeting leisure and family guests, these hotels can also attract large MICE groups if their offer is segmented effectively, the report added.

“The ability to target the MICE segment will play an important role in the long-term success of theme park hotels… This would soften the seasonality impact and diversify the target markets once leisure demand matures,” Sona said.

Colliers also recommended four guidelines for theme park hotel operators –

Proximity and access are key: As well as proximity to the theme park, accessibility to the city centre will also have a direct effect on the overall destination appeal.

Avoid over-theming when unnecessary: It is important to be flexible and use ‘hard’ and ‘soft’ theming to manage costs while creating a destination’s signature experience.

Don’t forget the MICE: Diversifying the segment mix broadens the destination’s appeal and can soften the impact of seasonality.

Target regional tourists: Theme park demand is driven by domestic and regional tourists, and it is crucial to align the design, facilities and theme with Middle Eastern preferences.

“Globally theme park hotels demand is primarily driven by leisure guests, especially families from domestic and regional markets. It is crucial to target them effectively,” said Sona.

“This means larger rooms and more of them, mid and upscale hotels rather than luxury, the right mix of food and beverage outlets and facilities that cater to domestic tastes and preferences and of course, the right brand.”

Also, since developing themed hotels involves higher costs, the report stressed creating a theme that has “the maximum impact on guest experience, and a minimal impact on construction costs.”

“There is a genuinely untapped opportunity in the region. By observing global theme park hotels, and their success factors, we are confident that these developments can thrive in this region,” said Sona.

“However, the real winners will be those that pick the right location, broaden their appeal beyond just leisure guests, and control costs by taking a flexible approach to theming. It is only a matter of time before we see a truly world class destination in this segment in the Middle East.”