Middle East：Crisis! What crisis?

There is a list circulating many of the amusement location operators in the Middle East.  It contains a run-down of about 50 major construction projects in the region which have been pushed back from their former start-date.

 

They are not being permanently delayed, but rather held off from starting work, by perhaps a year, maybe two years. And many of those projects will inevitably include investments within the amusement industry, in giant family entertainment centres or dry/water parks. 

 

The reason, of course, is the current economic climate and the stalling of the projects is seen as nothing more than prudence in light of what is happening elsewhere. In a nutshell, where the world grinds to a halt, the Middle East merely pauses. 

As one of the main amusement equipment suppliers to the region pointed out:

 

 

Travelling the region it is hard to believe that there is any kind of recession in the offing. The cranes are still there, perched on top of the new buildings like nesting storks. The glittering high rises of Dubai aren’t the only construction projects going on – visit the harbourside region of Bahrain, or the reconstructed parts of Kuwait, see the levels of investment going on in Qatar and the shopping malls of Saudi.

 

It is true that the biggest complex of them all, the multi-faceted, multi-billion-dollar Dubailand, is not free of the financial constraints. Concerns over foreign investment in the project has seen some of the individual components, almost cities within a city, cut back, stalled or scaled down to more modest levels. And every part of the development, every individual “city” has its wealth of leisure and entertainment projects. Elsewhere, Universal Studios has been put back a year; Worlds of Discovery, the Busch development, has been delayed. 

 

As another local operator put it: “The individual governments here in the Middle East hate to see abandoned shells of new buildings. They insist that every project which is started should be finished and opened. It is the projects which are currently on the drawing board which are being placed temporarily on the back burner.”

 

That means that for the next couple of years there will be no sign of an economic downturn on the construction of entertainment and leisure facilities in the Middle East, but the pause of 2009/10 may manifest itself in reduced activity in 2012/13.  

Quite apart from that, there continues to be activity in the “green field” territories where entertainment previously hardly existed. Countries like Syria, Iraq and Iran – major population destinations – which are only now getting into the shopping mall-entertainment psyche honed to perfection in the United Arab Emirates and the Kingdom of Saudi Arabia, will show no slowdown at all. 

 

Iraq? Yes. Despite it supposed instability there are large areas of settled security where confidence has reached the point where investment has started.  Talk to the suppliers of rides and games in the region and they will all admit that they are sending people into countries like Iraq and Iran to work on FEC and park projects. “But keep it quiet – we don’t want our competitors to know….” they say. But as we discovered that they are ALL doing it, the secrecy becomes amusing. 

 

Jordan is looking a strong new market, there is considerable “in-filling” within the major driver of the region, Saudi, in areas where entertainment was previously unknown, and the industry is spreading west into Egypt, Libya and Morocco, south into Ethiopia, north to the Lebanon, Iraq and Syria, and east to Iran, Azerbaijan, Kazakhstan, as well as into Pakistan and India. 

 

So what is it with the Middle East in general, or perhaps the Arab countries in particular, that creates this enriched territory for amusement equipment, even against a background of economic depression?

 

The reasons are actually fairly straightforward. Most of these countries have a tradition of cultural conservatism. In some places cinemas are forbidden, music frowned upon and entertainment in its broadest form generally regarded as highly suspect. After careful inspection, however, even the most conservative of the cultures, Saudi Arabia, recognised that leisure, if properly controlled, was an acceptable channel for light relief for its people. Shopping was acceptable and the growth of shopping malls to provide a controlled environment for that leisure – controlled particularly in terms of the climate – was seen in the late 1990s as a safe concession to modernism. 

 

Indeed, it was Saudi Arabia which was to be the driver, building some outdoor amusement parks which continue to operate, although the harsh climate forces them to close at the height of the summer. Shopping malls and family entertainment centres within them as “anchor” leisure offerings, became the chosen outlet for this paternal benevolence.  

 

And of course Saudi Arabia had the resources to do it in a grand style, coming from oil revenues. It had a large population, with plenty of disposable income but no locally accessible outlet for frustrated leisure time. Hence the shopping malls. 

 

The pattern was quickly picked up elsewhere. The more aggressive emirate of Dubai in the UAE became the world’s playground as the most liberal of the Middle East destinations. While Al Hokair with its (now) 60-plus indoor and outdoor FEC/park locations led the way in Saudi, Majid Al Futtaim (MAF) with its Magic Planet FECs in Deira City Centre set off the Dubai boom. Kuwait was quick to follow, then Bahrain and now Qatar is getting in on the act. 

 

Why the FEC? Because it is covered and therefore protected from the heat of the day, air conditioned, within shopping facilities, provides food and beverages, party rooms and even, in the more sophisticated locations, children’s hair stylists. In reality, the FECs of the Middle East are not just following the pattern of this type of amusement in the US – they are leading it. 

 

And now the second phase is under way. 

 

The blueprint – rides, games, food – is still there and forms the backdrop to thinking. But there are those who are taking it all a stage further. MAF did it with its Sky Dubai project at its Mall of the Emirates. Upstairs there is the biggest Magic Planet of them all, with its rides and games, but on the ground floor there is a “real snow” experience where the locals can don ski suits and ski, toboggan and bounce about on inflated tyres. 

 

The notion of surrounding a central entertainment theme with games and rides was taken a stage further. The tenpin bowling centre, ice skating, go-karts focus for an indoor park or FEC has become common-place. Ski Dubai took concepts in entertainment to a new level. 

 

Now MAF has added the Middle East’s biggest waterpark Wahooo! to its new Magic Planet FEC in Bahrain’s City Centre Mall, which is due to open about now. This US$50m investment is a 70 per cent indoor, 30 per cent outdoor water park (see separate report) and illustrates again a desire to go one stage further than the traditional park or FEC. 

 

But it isn’t all MAF. The expansionist ideals of some of the national companies, well ensconced in their own countries, is seeing them invest elsewhere. Future Kid in Kuwait, now a public company, is setting up subsidiary companies in Saudi Arabia and the UAE with a view to spreading its own concepts in entertainment more widely within the region. The same can be said of Magic Island in Bahrain, while the grand-scale investment seen from MAF can be matched by Playland at Qatar, where one of the biggest FECs in the region is now close to completion at Gondolania Entertainment City, within the Villaggio Mall. 

 

The suppliers are having a field-day in the Middle East. Zamperla has developed a series of “bug” rides for MAF which is exclusive to the operator; IE Park has rides in nearly all of the developing indoor parks; and Westech is more often seen to be pulling all the disparate parts of a rides installation together than anyone else. The games are coming in from the likes of Sega, ICE, Elaut, UDC, LAI, Qubica and Jolly Roger, all channelled into position by local suppliers such as Amusement Services International, Warehouse of Games and Magna Amusements.  

 

And all of the equipment in a Middle East location – whether rides or machines – tends to be linked by a debit card payment system. And that means a dog-fight between the three main suppliers of systems, Intercard from the US, Sacoa from Argentina and Embed from Australia. 

 

The Middle East remains an encapsulation of the amusement industry the way it used to be – vital, energetic, sharp-edged and above all, enthusiastic. The doom and gloom merchants with which the industry currently abounds have no place in the Middle East, for although the economic climate may cause a slowdown, it won’t stop what is unquestionably the world’s best market. 

 

Damien Latham considered himself a “fixture” at Center Parcs in the UK after 15 years there – until an offer came from the Majid Al Futtaim Group….

 

He is now general manager at Wahooo!, the first indoor waterpark in the Middle East at Bahrain, and among the 10 largest indoor waterparks in the world. 

 

He moved out to Bahrain last year to oversee the construction, equipping and opening of the location – due to begin operations in summer 2009 – and has never regretted the decision.

 

“It is an incredible project,” he said. “MAF has gone for something which is completely out of this world.”

 

Latham’s enthusiasm is infectious. He is heading up a US$50m. investment which takes MAF Leisure into new territories. The group is a multi-faceted investment corporation spread right across the Middle East from its Dubai base, but it is best known in the international market for its family entertainment centres. It runs the iconic Magic Planet chain of locations, all as integral parts of up-market shopping malls in a number of countries. 

 

In the case of Wahooo!, the waterpark is within the same mall as a Magic Planet which opened in October, in the Bahrain City Centre shopping mall. Latham was brought in to head up the enterprise because of his considerable experience with indoor waterparks.

 

“Every Center Parc facility in the UK has as its central point an indoor waterpark. They are not huge of course, nothing on this scale, but the procedures and management methods are the same.

 

“The great difference is that a Center Parc has a captive audience – a mix of accommodation and entertainment within a specially-built, countryside community.  Wahooo! has to compete for its clientele. It is interesting that in the month when we set up the Wahooo! website we had no fewer than 140,000 hits!” 

 

Bahrain has about 750,000 residents and about another 20,000 tourists. The region has its waterparks, of course, but they are all outdoor locations, such as Wild Wadi, Lost Paradise and Dreamland. The problem for open-air waterparks in the Middle East, says Latham, is the weather. 

 

“It gets too hot in the summer months and that means that outdoor parks must close for three or four of the hottest months.”  

 

Wahooo! has an entirely different outlook; it is 70 per cent indoor and 30 per cent outdoor. And what happens to the outdoor part when the weather is unkind?

“During the winter, when the temperature can go down to 16-18 degrees, we use heated water. We have four massive heating/cooling systems for the climate and water control built into the park. We can cool water outside, or heat it inside – and then switch it around.”

 

Like any Middle East waterpark, Wahooo! will observe carefully local culture. There will be a ladies’ day when only women and children – with boys up to 10 years old – will be permitted and even all of the male supervising staff at the park (Latham included) will be banned from the premises. At other times women can still attend and the park will supply what it calls a ‘burqini,’ a Lycra-made bathing suit which observes the modesty laws in the region. 

 

Wahooo! covers 15,000 sq. m and takes the art of indoor waterparks to a new level.

“Indoor parks actually began in Europe – Center Parcs has had them since the 1980s – but during 2002 there began a trend towards indoor waterparks in the US which saw rapid expansion. The Great Wolf Lodge chain is a good example and now other companies such as Nickelodeon have come into the business.”

 

Wahooo! has a Sidewinder, a 190 degree Master Blaster, Black Hole, Lazy River and a wave pool, children’s interactive play area, a Matt Racer and a Flow Rider which is one of the largest anywhere with a three-metre curling wave. There is also an outdoor lagoon pool. The location has plenty of food and beverage facilities and a central schooner construction where parents can sit and watch their children play. There is a wide range of shops, party rooms and all of the expected features of a modern waterpark. 

 

The consultant for the project was Water Play and MAF’s main consultant, Bill Taylor, of Team Leisure (who was responsible for MAF’s Sky Dubai) put the project together. The problems they faced were immense, as the park is situated on the third floor of a shopping mall and the sheer weight of the 2.5m litres of water alone would place enormous pressure on the structure of the building unless it was designed to withstand it. The rides were supplied and installed by Aqualeisure International from the UK. 

 

The park has a capacity of 1200 at any one time and it is anticipated that daily attendance will be somewhere between 3,000 and 4,000. 

In June of this year, Gondolania Entertainment City is due to open at the Villaggio Mall in Doha, Qatar. The handful of games currently in operation behind the Fun Fair Company’s ice rink in the mall will be swept away and the screens removed to reveal a jaw-dropping 20,000 sq. m area of concentrated entertainment, surmounted by a roller coaster.

 

At the sharp end of the Gondolania exercise is one-time TV producer Michel Koborsi, general manager of the venture, who came out of a high profile television career nine years ago to set up the nearby Circusland FEC at the Landmark Mall for operators Playland Company.

 

“There are actually marked similarities between producing television programmes and producing FECs,” said Koborsi. “They are both in the entertainment industry and our FECs often include shows.”  

Playland is the parent company of Circusland at one mall and Gondolania and Fun Fair Co. at the 130,000 sq. m Villaggio. Gondolania is named because the Villaggio has a 250m network of artificial canals with gondolas offering rides at 15 riyals (US$4.11) a time to a constant stream of shoppers and their families. 

 

The Fun Fair Co. also has an Imax theatre going into the new FEC – it has one already at the other end of the mall in a cinema complex – but it is the rest of the make-up of the US$20m FEC that is stunning.  

 

The roller-coaster is installed and testing will begin shortly. Shipped in by Westech, the Swiss suppliers, the roller-coaster is one of a number of major rides going into the location. Project manager Joseph ‘Jo-jo’ Romero, pointed out where the flume ride would go and the ferris wheel, the 10m Panorama ride, the Mad House, dark ride, carousel, Red Baron and where the concessions would be installed, the Costa Coffee, Johnny Rocketws, Haagen Dazs, Burger King, 1,000 sq. m toy shop, mobile phone shop, then the softplay area, the bungee jump, the wall climbing and the go-kart track. 

 

“The spinning roller-coaster will climb nearly to the ceiling of the 20m we have available and there is a 19m drop at one stage underground and through water,” he noted.

 

There will be two party rooms each accommodating 150 guests, a billiards hall and internet café and of course, 200-plus games. Most of them will be the latest models of redemption games and videos, all connected to an Intercard debit card system. 

“The pre-loaded card will work any of the rides and games,” said Romero. “Not the food and beverage facilities, however, as most of them will operate as a franchise.”

There will also be a 12-lane tenpin bowling installation, bumper cars, trampolines…the list of attractions is almost endless.  

 

Despite the attention which Koborsi and his team have to give to their huge project at Villaggio, they are still looking beyond that to a future in operating generally in the region. Indeed, they have already concluded a contract to open an FEC at a new shopping centre, the Gulf Mall, which is due to be completed in 18 months’ time. The FEC inside the mall, which will be close to the Landmark, will cover 4,500 sq.m. 

The global economic recession is not affecting the ambitions of Future Kid Entertainment, the Kuwaiti company which entered the Stock Market on December 18 of last year. The resources which became available to the group as a result of that float have seen Future Kid expand rapidly, taking advantage of the more hesitant market to establish its confidence in the FEC business in the region. 

 

Under Chief Executive Rasha Al Ghunaim, Future Kid flourished from late 2005, when she took control. From a base of one waterpark and one FEC, Future Kid is now consolidating its business in its home territory and has expanded its operations into other countries. 

 

The company’s headquarters are located in the Free Trade Zone area of Kuwait City, where two of the immediate products of Al Ghunaim’s expansion plans took up the story.  Faisal Khalid Al-Mutawa has come in as deputy managing director and Nouria Al Fadhel as senior director, marketing and public relations. They reflect Al Ghunaim’s determination to build a highly-qualified team to take her new public company onto fresh levels. 

 

The Future Kid Entertainment and Real Estate Company, to give it the full name, is now the parent company of a succession of projects within the amusement industry. It already had its Aqua Park, a waterpark acquired in 2007 and one of two under the company’s control (the other is in Kuwait’s Aquatic Mesilla Village). Also within its portfolio prior to the floating of the company, was the Dave and Busters franchise for the Middle East and some businesses which could be described as associated activities, running Kids Sports, a nursery and a Tutoring Club.  FECs were also in the portfolio, in 12 shopping mall and retail centres in Kuwait. 

 

Also in Kuwait, Future Kid opened an FEC in Al Jahra, a high-density population area close to the Iraqi border. 

 

“It is a popular resort area,” said Al-Mutawa, “where people go to camp out in the desert. It is close to the famous Slayil resort which has many hotels and a big shopping mall. There were no amusement facilities there before.” 

 

The Future Kid operation at Al Jahra (1,250 sq. m) was opened in 2007 and was followed by another FEC at Al Manar, a commercial complex and another location close to the border, smaller than the Slayil location and opened in 2008.

That was only the tip of the iceberg, however. Future Kid’s rise has been little short of meteoric since the float. Two branches have now been opened in the Kingdom of Saudi Arabia, at Al Medina City in the west of the country, where Happy Land is the new brand name for Future Kid operations in Saudi. The launch of Happy Land Entertainment as a separate company was seen by Future Kid as a necessary step to establish separate branding. The Saudi company has its head office in Al Medina. The second FEC there is at Yanbu’. 

 

Each of those locations covers 4,000 sq. m and contain major rides and small amusements for children and families. They have a space theme which is heavily accented in the accompanying party rooms. 

 

Said Faisal Khalid Al-Mutawa: “Our long term strategy for the company is to expand within the Middle East – and that can mean anywhere within the region. It will be mostly within the Gulf region and mainly in FECs and mainly in shopping malls, but we are not limiting ourselves to that pattern.”

 

He said that the company would develop some stand-alone locations, probably in joint ventures. That includes two major projects under way in Saudi Arabia, planned for completion and opening in 2009, plus one in Kuwait, all FECs. In Saudi, the developments are in Jeddah and Jubail under the Happy Land brand and another future Kid in Kuwait. Happy Land has also been registered in the United Arab Emirates which signals that the group has aspirations in that country too. 

 

“It does not necessarily follow that our plans are located in Dubai,” said Nouria Al Fadhel. “Dubai is just one of seven emirates and there is already a great deal of entertainment in Dubai. There are other emirates which have very little entertainment and are therefore considered to have excellent potential.”

 

All of the Future Kid projects utilise the Intercard debit card system, except one which was previously only part-owned by the company. Only rides and machines are covered by the system as many of the supporting food and beverage installations are supplied by concessionaires.   

 

The current Future Kid projects include the Cartoon Network indoor theme park in Kuwait, the biggest currently in the Middle East, which is now close to opening and at the time of writing was undergoing testing of its facilities. The location has a wide range of rides along with areas which are both indoor and outdoor and includes a roller coaster.

BAHRAIN  

Saudi Arabia  has seen a rash of family entertainment centres open up within its luxury shopping malls. Nevertheless, Bahrain – just across a causeway – has remained a very popular day out for Saudis, particularly at weekends, which in the Middle East region tends to be Friday and Saturday.

 

Over the past 12 years, the favourite destination has been the Seef Mall, owned by Seef Properties B.S.C, which built the high-class shopping location 12 years ago and installed in it (in 1999) Magic Island, the first, largest and most attractive indoor family entertainment centre in Bahrain, yet still among the top and most notable in the Middle East.

 

The facility is managed by Mr. Sami Abi Chahine, well-known in the Middle East as an exponent of the art of running successful family entertainment centres. Seef Mall is one of 28 different properties and businesses in Bahrain which come under the  umbrella of Seef Properties B.S.C.

 

Another outlet for Magic Island was launched in 2004 at the Marina Mall, covering 860 sq. m, while the prime location at the Seef Mall is a much larger venture at 4,500 sq. m.

 

Next up for Seef Properties’ FEC division will be a new location in the Isa Town City, particularly at Isa Town Mall. That FEC project within the mall – which is already operational – is now expected to open around the middle of next year. It will cover around 1,000 sq. m of serious fun.

 

That will be another in a chain of Magic Islands which the company plans to develop, while it has plans to take the well established brand name of Magic Island outside of Bahrain. 

 

“Currently we are studying some business proposals for expanding within the GCC and the Middle East, said Abi Chahine.”

 

At the Marina Mall there is a heavy accent on children, especially those 16-years-old and below. At the Seef Mall the offering is spread to higher age groups right up to adults.  There are 19 manned attractions and five of them are the first indoor attractions of their type in the Gulf. Among the most thrilling attractions are those rides from Moser, MaxFlight, Zamperla and Preston.

 

The Magic Island brand name is clearly something readily recognised for quality and the group is keen to have that recognition transferred to various locations both inside and out of Bahrain .Those plans may have been affected by the global economic situation at present, but it won’t be long before they are brought to the front burner again.