Told ya so... Busch dumps Dubai plan
Thanks to TPI reader Jason Jackson for submitting this first.
Busch Entertainment Corp isn't going to build four theme parks on a Shamu-shaped island in Dubai
, after all. Here's the word from Beth Kassab
at the Orlando Sentinel.
I've been telling folks that many of the announced theme park projects for Dubai would turn out to be vaporware, and that even the ones that got started are facing a tough go of it, with falling oil prices and a worldwide credit crunch triggered by still-overpriced U.S. housing.
Most of the theme park companies lured to Dubai weren't drawn by the market's potential. No, they were brought in by fat royalty and consulting checks written by oil-enriched Dubai-based developers, who were to handle and pay for the construction, and in many cases, the operation of the parks.
Perhaps some of these projects may yet see opening day. (I'm told that Universal's is the closest to becoming reality.) Even the Busch deal might be put back on the table at some point, according to Kassab.
But the economics of these projects are tough. To get them built, the developers need expensive oil to fund the construction and licensing. But to attract the tourists that would keep the parks alive and profitable, the operators need cheap oil, to keep airfares low. Anyone see a problem there?
Actually Dubai has very little oil; Abu Dhabi has most of it in the UAE. Dubai has been hit hard like everyone else by the credit and real estate bubbles. Universal's park has been pushed back to early 2012 at the earliest. City of Arabia is being built with the Restless Planet dinosaur park to open in 2010. How good will it be? We'll just have to see. Six Flags will probably get dumped soon since they've made a deal with Qatar. Legoland still has a good chance for 2011 considering the Dubai government owns 20% of Merlin. The Formula-1 theme park has already had a good deal of work done on it, though it's been pushed back to 2010 for opening.
So no Ferrari Park with the annual F1 race? Oh well, sounded like a lot of whip lash anyway! Well, at least they'll still have the only Tiger Woods golf course design in the world (not that it is somewhere where any normal, non-oil baron would play golf...)
As has already been mentioned I don't think the falling price of oil has hit Dubai, only 6% of the Emirates GDP is based on oil.
I chose my words carefully: "oil-enriched." If Dubai's wealth was not coming from the sale of oil, it certainly was coming from providing financial services to those whose wealth, in large part, derived from the sale of oil. It might be secondary oil wealth, but it is undoubtedly oil wealth.
The Ferrari theme park in Abu Dhabi is more than half done so it looks like that one will be completed.
I expect Dubai to diversify in the face of the current economic climate. Up to now Dubai has been very much orientated towards providing services for the wealthy, no more is this noticeable than when looking at Dubai hotels, you'll not find too many hotels less than a four star. If Dubai expects to keep the visitors coming in there is going to have to be something geared towards the budget traveller, i.e. cheaper hotels.
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