the family attraction opportunity in the middle east: philip shepherd, pwc
TRANSCRIPT
The Family Attraction Opportunity in the Middle East
Strictly private and confidential
March 2017
Advisory Services – Deals Strategy
PwC
March 2017
Family Entertainment Centres (FECs) have been gaining in popularity in the Middle East, with many new types emerging
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The Family Attraction Opportunity in the Middle East •
Entertainment GamingEdutainment Sports
FECs centred around leisure activities and thrill rides
FECs that offer leisure activities with educational
benefits
FECs centred around arcade games and targeting a wide
demographic
FECs offering activities and games that are physically
engaging
Source: PwC analysis
Types of FECs by offering
PwC
March 2017
The Middle East has several favourable demand drivers for FECs…
3
The Family Attraction Opportunity in the Middle East •
Growing Mall supply
Increased Leisure Tourists
Growing Resident Population
• +225 m residents as of 2015, forecast to grow at c.3% p.a.
by 2025
• Predominantly young (c.30% of the population in KSA
and Egypt is below the age of 15)
• +60 m inbound tourist arrivals as of 2015, forecast to grow
at c.6% p.a. by 2025
• +19 m tourists to the UAE, 75% of which are for
leisure
• +150 mn sq.ft of gross leasable area as of 2015
• Gross leasable area is expected to increase by 36% between2016-2019
• c.50% of mall supply in the UAE (+120 malls)
Note: Figures include Bahrain, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen
Source: PwC analysis
PwC
March 2017
UAE and Qatar have the largest attractions pipeline in the near future
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The Family Attraction Opportunity in the Middle East •
EGYPT
Announced upcoming FECs
UAE
Ain Dubai
Saudi Arabia
Qatar
Jordan
Egypt
Source: Press articles
PwC
March 2017
In terms of positioning, there is room for “edutainment-focused” FECs such as Kidzania and KidzMondo…
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The Family Attraction Opportunity in the Middle East •
Siz
e
(Th
ou
san
d s
qft
)
80
50
10
Focus on role-play
FECs in the MENA region based on focus & size*
Edutainment Focus
Low High
Source: PwC Analysis, Company websites
*Note: List indicative and non-exhaustive
Sm
all
La
rge
PwC
March 2017
The Edutainment concept offers a premium differentiated experience
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The Family Attraction Opportunity in the Middle East •
Entrance
KidMondo DohoRoleplaying as surgeons
KidZania Singapore
Roleplaying activities
KidZania London
Entrance
LDC TorontoKids play area
LDC Manchester
Average outlet size 2.5k – 7.5k sqm
Average dwell time 2 – 4 hours
No. visits per outlet
300k – 600kc.65% of visits are from children
Target age group 2-12 years
Average CAPEX
$25m - $35m per outlet
Sponsors pay up to 40% of initial cost
LocationGenerally connected to large
shopping malls
Key facts:
Payback period
4-7 yearsOperates at 20-40% margin
PwC
March 2017
Edutainment concepts enjoys high footfall
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The Family Attraction Opportunity in the Middle East •
500
180 160 130
60
45 46 50
800
600
1,000
20
00
60
80
100
40400
200
100Visits per sqm
Visits per outlet
Av
er
ag
e v
isit
s p
er
o
utl
et
in ,
00
0
Vis
its
pe
r s
qm
Annual visits to select FECs in the UAE, 2016
Source: PwC Analysis, Company websites, New articles
PwC
March 2017
Demand for FECs is expected to continue to outstrip the upcoming supply…
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The Family Attraction Opportunity in the Middle East •
*Based on market benchmarks and assuming 250k visits per outlet per year, and c.4.7x average visits per person per year to paid FECsSource: PwC analysis
UAE30%
Qatar2%
Eqypt8%
Oman5%
Jordan5%
KSA50%
Qatar3%
Jordan7%
Eqypt36%
Oman5%
KSA38%
UAE12%
2015
c.30 mnvisits
+350 outlets
Existing visits to FECs
2020
Potential demand to FECs
Opportunity for:
c.126 mnvisits
130-140 outlets
PwC
March 2017
…with KSA and Egypt providing the largest opportunities
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The Family Attraction Opportunity in the Middle East •
*Based on an average visits per outlet of 250k per yearSource: PwC analysis
+350
Total 2020 supply-demand gap by number
of new outlets*
EGYPTSAUDI
ARABIA
JORDAN
QATAR
Oman
UAE
Focus countries
(Amman, Irbid)
(Alexandria,Cairo)
(Riyadh, Makkah,Madinah,Eastern Province,
Tabouk)
(Muscat, Batinah,Sharqiyah)
+145+5
+140
+20
+25
+15
Supply-demand gap by number of new outlets, 2020
PwC
March 2017
Five regional real estate developers dominate the FEC market across the Middle East given their ability to leverage their mall portfolio
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The Family Attraction Opportunity in the Middle East •
Source: FECs websites and annual reports, PwC analysis *List non-exhaustive
Meraas / Dubai Parks
Miral / Farah Experiences
EmaarEntertainment
Al Hokair Group
Majid Al Futtaim(MAF Leisure)
8 locations in the UAE
PwC
March 2017
Critical success factors
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The Family Attraction Opportunity in the Middle East •
Strong IP
Experienced operators
Partnership with other facilities and DMCs
Strong social media presence
Strategic location (e.g. high footfall malls)
Long dwell time
PwC
March 2017
Thank you
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The Family Attraction Opportunity in the Middle East •
Contact PwC today to learn how we can help you address these challenges and succeed in Leisure & Entertainment
Philip ShepherdPartner, Hospitality & LeisureUnited Kingdom
Direct line: + 44 (0) 20 7804 9366Mobile: + 44 (0) 7770 581 273E-mail: [email protected]
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