Dubai amusement park to add $454M Six Flags
DUBAI, UNITED ARAB EMIRATES >> A massive Dubai amusement park project still under construction plans a $454-million addition to include a Six Flags, the company said Monday, yet another major bet on tourism by the attraction backed by the city-state's ruler.
The new spending by Dubai Parks & Resorts, which already includes Bollywood and movie-themed parks, as well as a Legoland, will put the cost of the entire project in the sprawling desert southwest of the city at well over $3 billion.
And by adding the Six Flags, it appears the company hopes to exorcise the lingering memory of another massive amusement park planned here to include it before the emirate's 2008 property crash.
Dubai Parks & Resorts said its board of directors agreed to issue shares worth 1.67 billion dirhams ($454 million) to raise money for the Six Flags Dubai park. Shareholders will vote on the deal in April, it said.
It offered no other details about what will be planned for the park, though a mock-up on display earlier this month at the resort's main office showed a possible addition to the park on its eastern corner.
In a statement, Dubai Parks & Resorts' CEO Raed Kajoor al-Nuaimi said the addition of the Six Flags park would "further establish Dubai Parks and Resorts' position as the Middle East's largest leisure and entertainment destination."
"This means we will be able to strengthen the appeal of our destination, attracting thrill seekers of all ages," he said. Officials hope to open the Six Flags park by late 2019.
Approval of the plan by shareholders appears likely. The park's majority owner, with 60 percent of the company, is Meraas Holding, a firm backed by Dubai's ruler, Sheikh Mohammed bin Rashid Al Maktoum. Previous listings on the Dubai Financial Market showed the Kuwait Investment Authority, that country's sovereign wealth fund, owned a 5-percent stake, as did Bahrain's Mubasher Financial Services, though that information was no longer listed the exchange's website Monday.
Shares in Dubai Parks & Resorts closed at 1.21 dirhams ($0.33) in Monday trading.
Six Flags Entertainment Corp. "will be heavily involved in managing" the Dubai park, said Nancy Krejsa, a spokeswoman for the Grand Prairie, Texas-based company. She declined to discuss the financial terms of the deal. Annual reports for over the last two years for Six Flags included mentions of it making licensing deals overseas that don't require it "to make any capital investments," while reaping fees while any park is under development or opened.
Six Flags signed a 2014 deal with Meraas to build a theme park on Dubai's outskirts, and the Dubai Parks & Resorts' announcement is "the next stage of the agreement," Krejsa said in an email. It also announced a partnership last week with private firm NaVi Entertainment to lend its name to a theme and water park in Vietnam, without disclosing financial terms of the deal.
While still mostly desert, the site of Dubai Parks & Resorts is close to where Dubai plans to host the 2020 World Expo, or world's fair, as well as Al Maktoum International Airport at Dubai World Central, which officials hope someday will handle over 200 million passengers a year.
Investors hope to gain from the growing number of tourists visiting Dubai, home to the long-haul airline Emirates, the world's tallest building, luxury malls and other attractions. In 2015, Dubai saw 14.2 million overnight visitors, up from 13.2 million the year before, according to the emirate's Department of Tourism and Commerce Marketing.
But challenges remain for the park, which is scheduled to open its other attractions this October. Low global oil prices have pinched the United Arab Emirates and other neighboring Gulf countries, which supply a ready stream of tourists to Dubai.
Meanwhile, the memory still remains of a massive planned amusement park known as Dubailand, which collapsed when property values in the emirate crashed and Dubai had to accept multibillion-dollar emergency aid packages from Abu Dhabi to stay afloat.
Stefan Zwanzger, a German amusement park enthusiast who blogs about the industry and has lived in the Emirates, said that while amusement parks likely would do good business in the UAE, adding so many of them at once through this project and others could prove problematic.
"I have no idea who's writing the feasibility study for the UAE to build so many theme parks at the same time," Zwanzger said. "It's as if you go in a Lamborghini and you accelerate from zero to 100 in four seconds. It's probably fun, but you can hit a lamp post."
Dubai Parks & Resorts: www.dubaiparksandresorts.com
Six Flags Entertainment Corp.: www.sixflags.com
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.