DXB Entertainments, which owns Dubai Parks and Resorts, expects 7.5 million visits annually between this year and 2019, or 20,500 daily visits, according to the company.
EFG said that hitting these targets will take longer than the management expects.
“Despite the large size of the park that can easily cater for such numbers, we believe that the theme park market in the UAE is still in its early stages and needs some time to mature,” EFG wrote. “The park’s large size with a number of outdoor rides will not help given the hot summer weather.”
Dubai Parks & Resorts operates Legoland Dubai and its waterpark, Motiongate and Bollywood Parks on the site, which also includes an extensive retail area and hotel.
Aggressive marketing from Ramadan next month and through the summer will help the complex receive 2.6 million visits this year at a net average ticket price of Dh195, EFG said.
The investment bank estimates average daily visits at 10,300 each year until 2019, rising to 22,000 in 2020 after the opening of the Six Flags theme park inside the complex. The average ticket price is forecast at Dh220 in 2018 and 2019. Currently, a non-discounted single adult ticket costs Dh335 for access to up to two of the theme parks.
DXB Entertainments did not respond to requests for comment.
According to EFG, DXB Entertainments will report net losses up until 2019. On total revenue of Dh75.9 million, the company posted a loss of Dh484.8m for last year, when the theme park complex was open only for two months, during which time it received 323,489 visits.
DXB Entertainments’ shares closed at Dh1.03 yesterday, unchanged from Wednesday. The price is down from Dh1.19 a year ago.
EFG Hermes maintained its neutral position on the shares, but cut the target price to Dh1, down from previous Dh1.51.
According to John Podaras, a partner at the hospitality consultancy Hotel Development Resources in Dubai, these types of attractions need time to reach their potential as awareness builds and the necessary transport and support infrastructure matures.
Similar time lags have been experienced by operators of other theme parks around the world, including Disneyland Paris .
“Domestic demand is focused on weekends and holidays and the price point is such that visitation is more of a special occasion, say once or twice a year for most people, rather than a regular thing,” Mr Podaras said, referring to Dubai’s theme parks.
“Optimum revenue yield therefore is very much dependent on the international market, which will build up over the next two to three years as more wholesalers and travel agents create and market packages.”