GCC consumers spend an average 6.2 per cent of their income on leisure and entertainment (L&E), compared to 4.2 per cent spent by the average UK household, a new study from global consulting firm Strategy& found.
Tailoring investments in the sector by increasing the accessibility and appeal of arts and culture offerings, focusing on neighbourhood-based options and limiting large theme park ventures could generate an additional $3.4 billion (Dh12.5bn) annually, the report said.
Based on survey respondents reporting an average monthly spend of $300 per household multiplied by the number of households in the GCC, the market size is estimated at $35bn to $40bn, according to Strategy&, a subsidiary of PwC.
“L&E activities impact society’s well-being positively in a number of ways, through engaging nationally relevant culture and art activities, increasing citizens’ participation in recreational events and affirming belonging among diverse groups of people – which all leads to a higher quality of life,” said Bahjat El-Darwiche, partner with Strategy& Middle East, and one of the report’s authors. “However, to get the most from their L&E initiatives, GCC governments have to prioritise investments to match the specific needs of the sector’s consumers.”
While two-thirds of survey respondents see L&E as a “must” for quality of life and prosperity, more than 78 per cent showed a willingness to increase their L&E spending if the offerings were more aligned with their needs.
Several GCC governments have made investment in the L&E sector a priority in recent years. In line with its Vision 2030, Saudi Arabia has created new entities such as the Ministry of Culture, the General Entertainment Authority and the General Sport Authority.
The kingdom has already hosted concerts by Western entertainers, announced plans for an opera house and lifted a 30-year ban on cinemas. Saudi Entertainment Ventures is planning a one million square metre theme park and a string of other leisure schemes.
The UAE opened the Dubai Opera in 2016, Louvre Abu Dhabi in 2017 and the Coca-Cola arena in June. A slew of theme parks have also cropped up, including Motiongate, Legoland and IMG Worlds of Adventure in Dubai, and Warner Brothers World in Abu Dhabi.
However, the report cautions against investment in additional theme parks, except in the case of Saudi Arabia, which still has “a limited supply of L&E offerings relative to its population size”. As for arts and culture, the report says activities should be more relevant and engaging to consumers to increase demand.
"We're seeing a huge push for cultural activities and opera and theatre performances with a lot of investment from the government, but when we measure the demand and what people look for, we see that there is a bit of disconnect," Alice Klat, director of the Ideation Centre and one of the report's authors, told The National. "People are more geared towards the lighter, fun type of activities — neighbourhood events, playgrounds, family entertainment centres."
The Ideation Centre, the think tank for Strategy& in the Middle East, surveyed 1,200 consumers in the six GCC countries, and included nationals, as well as Arab, South Asian and Western expatriates. The L&E sector was defined as comprising of six activities: home recreation, visual arts, live entertainment, neighbourhood recreation, mega parks and sports.
Nearly 70 per cent of respondents said they engage in leisure and entertainment activities to “increase happiness,” while half said to “strengthen family ties” and 39 per cent to “strengthen social circle”. Only 37 per cent were motivated to “increase culture” and a quarter to “increase national pride”.
“It’s very important to highlight to governments that in order to benefit from the investments and the focus that they are putting on culture, it’s not only by providing the supply, it’s also by creating the demand,” Ms Klat said.
The report's recommendations include making arts and culture offerings more accessible and creating immersive and engaging experiences. For example, Europeana, the European Union’s online cultural heritage platform, deploys pop-up and digital booths that showcase art pieces from leading European museums during events and festivals. Adopting emerging technology is another way to engage users.
Neighbourhood activities, such as going to the cinema and visiting urban parks, were mapped as “frequent” in the study. GCC consumers also reported moderate frequency in visiting family entertainment centres, zoos, aquariums, gardens and casual events. Live entertainment options, such as concerts and performances, and visual arts, such as museums and libraries, were moderate to occasional activities.
Theme parks and water parks were also occasional options, mainly due to the cost. More than half of respondents said the high price of such offerings prevent them from visiting, or visiting more often.
“GCC governments should judiciously respond to their citizens’ demand for theme parks, given the considerable utilisation required to make these large investments profitable,” the report said.
Family entertainment centres such as Magic Planet and KidZania are typically more profitable than large theme parks, with a return on investment of 20 per cent or more, the study found.
Ms Klat said the study also targeted investors who might be interested in the region's lucrative opportunities.
“People [in the region] spend a good amount of their income on entertainment," she said. "And family entertainment centres would be a very profitable play for them.”
