A second wave of coronavirus infections is a big threat to the recovery of the leisure entertainment and attractions industry in the UAE and the rest of the Middle East and North Africa (MENA) region, an industry source has warned.
The sector which includes theme parks, amusement parks, cinemas and family entertainment destinations -- some of the economic pillars of the region’s tourism market -- has been crippled by the pandemic, primarily due to a massive slump in domestic and international visitor numbers.
As of today, the majority of the businesses in the industry remain closed despite the easing of restrictions and operators are reporting losses of billions of dollars per month, or a monumental financial cost of more than $80 billion in one year.
“The picture today is that most leisure and entertainment businesses, both indoor and outdoor in the GCC [Gulf Cooperation Council region] remain closed,” Rosa Tahmaseb, secretary general of the Middle East and North Africa Leisure Attractions Council (Menalac), told Zawya.
“The impact of the COVI-19 pandemic [on the industry] has been and still is being felt by operators across MENA region. With some operators closed for five months and others still remaining shut, the impact to revenue generation and ability to retain their employees is a big concern,” she added.
With the region’s attractions and other tourist spots still reeling from the March lockdown and struggling to get people out of their homes, thoughts of recovery seem a long way off. According to Tahmaseb, the industry might need at least two or three years to fully get back on its feet.
And before businesses could even look forward to a recovery, one of the biggest threats the industry is facing today is the resurging of infections. “A second wave and potential subsequent second lockdown will greatly threaten the recovery of the leisure and entertainment industry,” Tahmaseb said.
“This is why it is so crucial for everybody to take responsibility and help ease the impact of the spread of this virus by ensuring they wear their face masks, wash their hands and keep a safe distance from others at all times. We all play a big part in this,” she added.
On Saturday, the UAE saw the number of COVID-19 cases shooting back to more than 1,000, the highest in four months.
Consumer spending
The industry is a major component of the region’s tourism market.
Prior to the pandemic, it was estimated that consumer spending at theme parks, amusement parks and family entertainment centres could potentially grow from $302 million in 2019 to $404 million this year, according to a report by Wilkofsky Gruen Associates.
However, with most tourist spots and attractions now mostly empty or closed, and international visitors virtually absent, the Middle East region could lose some $102 billion (375 billion UAE dirhams) in revenues. Of that amount, some 79 percent or $80.58 billion) in losses could be attributed to the leisure industry, according to the World Travel and Tourism Council (WTTC).
Does the reopening help?
Countries in the region have allowed businesses to reopen, including those in the leisure industry after the March lockdown was lifted.
However, Tahmaseb said that the strict safety protocols that commercial establishments have been mandated to follow are not helping businesses recover quickly.
“There are many new safety measures that have been implemented… While this is a key area of importance for those who have been lucky enough to reopen, the additional resources, costs and time required to implement these added to the loss of revenue over the many months of closure is having a double impact on all our operators with many voicing their concerns about the long-term effects on both their business and the industry as a whole,” said Tahmaseb.
She also indicated that operators have resorted to job cuts and other cost-cutting measures to cope with the slowdown.
“Clearly, when any operation or business must remain shut for five months or longer, they will need to find ways to ensure they have a sustainable business model. It is impractical to think that businesses can carry the full cost of employee salaries on top of all their other responsibilities [particularly] the high cost of overheads to any leisure operation,” she pointed out.
Recovery
Tahmaseb said the industry will not be able to get back on its feet until consumer confidence is restored, adding that it might take at least two or three more years before spending in the sector returns to pre-COVID-19 levels.
“Our industry will not be able to fully recover until 100 percent of the population feel it is safe to go out and visit leisure and entertainment venues. Will the industry return to pre-COVID levels, yes, I think that someday it will. However, today, we are very much in the initial stages of recovery and realistically, we cannot expect to return to pre-COVID levels for at least the next two to three years,” she added.
(Reorting by Cleofe Maceda; editing by Seban Scaria)
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