11 Feb 2020
DXB records US$232.8m loss as company implements cost-cutting measures at theme parks
BY Andy Knaggs
DXB Entertainments, which runs the Legoland, Bollywood and Motiongate theme parks in Dubai, says it sees encouraging signs in its latest financial results, despite reduced attendances in 2019 compared to 2018.
The fourth quarter of 2019 saw the company make its first-ever quarterly profit before earnings of AED2m (US$540,000, €500,000, £420,000), while earnings for the full year were a loss of AED149m (US$40.6m, €37.2m, £31.4m) – a 38 per cent improvement on 2018.
DXB has put the improved numbers down to an efficiency and cost optimisation programme, which was implemented following previous troubling results, with the company saying that it expects to realise further gains from these measures in 2020. While visitor numbers were down by 7 per cent on the year to just under 2.6 million people, average hotel occupancy rates increased by 3 per cent to 62 per cent.
Adjusted net loss for the complete year was AED855m (US$232.8m, €213.3m, £180m), an improvement of 15 per cent on 2018's figures.
2020 is shaping up to be an important year for DXB, with an enhancement plan for Motiongate and Bollywood Parks Dubai bringing in a dozen new rides by the second half of the year. A 250-bedroom Legoland Hotel is on target for delivery in the first half. DXB implemented a new pricing strategy in October 2019 to encourage multi-park visitation, improve yields and target new market segments. 2020 is also the year of the Dubai Expo, which is expected to significantly boost tourism across the region when it opens on 20 October.
"Our efficiency programme is delivering good results, with year-on-year savings in operating costs of AED172m (US$46.8m, €42.9m, £36.2m) in Financial Year 2019, with further savings to be realised in 2020," said Mohamed Almulla, CEO and managing director of DXB Entertainments.
"Our focus is now on delivering EBITDA profitability on a full-year basis by achieving revenue growth, specifically through initiatives to drive visitation from our core international markets and through hotel strategy."
The completion of the Legoland Hotel will give DXB an on-site room inventory of 1,300 keys, and Almulla said the introduction of further hotel rooms to the destination will be a "key driver of growth in international visitation, facilitating the bundling of our theme park tickets with hotel stays and ultimately increasing length of stay, visitation and dwell times".
Given the seasonal nature of its business, Almulla said the business expects profitability in Q1 and Q4 2020, but losses in Q2 and Q3.
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