Family Entertainment Centres Grow in the UAE

Family Entertainment Centres (FECs) continue to generate high cash flows in the United Arab Emirates, according to Prakash Vivekanand, Director of Amusement Services International (ASI).

ASI is one of the largest suppliers of arcade games in the Arabian Gulf and India-continent.

Vivekanand (pictured) explained "by number of players it's a small industry but by money generated it's huge and very cash-flow driven."

Due to the hot climate which draws people indoors, FECs in the Middle East enjoy a higher frequency than in other parts of the world. In the USA, people go to an entertainment facility on an average once every two months while in the region, frequency doubles.

The region also enjoys a higher price per play compared to global markets. The international average of game prices are between 30 cents (Dihram1.10) and 50 cents while the average in the Middle East is $1-$1.30.

"We don't have a lot of outdoor entertainment avenues available to the majority segment of the market. This form of entertainment and amusement has almost become a part of the culture," Vivekanand explains.

According to the International Association of Amusement Parks and Attractions (IAAPA), FECs host an average of 381,000 guests annually, with the larger facilities hosting up to 622,000 guest. FECs also experience comparatively high levels of repeat visitation - more than three visits per season.

The United Arab Emirates (UAE) is considered by industry players as the most developed FEC market in the Arabian Gulf region. However, like any other industry in the UAE, FEC's suffered during the economic downturn of recent years.

As Vivekanand explains "in 2007 the FEC industry was very similar to the real estate industry; everything was so hot it would sell in an instant. With the downturn we saw a lull, manufacturers all went into a shell and weren't willing to come up with any new technology."

Now industry players are saying the demand is steady but instead of new projects, new orders are coming from current clients and other markets.

Nabeel Qasim, General Manager of Warehouse Games, a major supplier to FECs in the region explains "in the UAE the business is stable but it's a bit saturated. We are looking for other markets." Qasim sees these new markets are as including Iraq, Syria, Jordan and Azerbaijan.

While new projects are slowing, Vivekanand says the industry isn't, adding "we're working on a very exciting new project with Landmark Group. It's a very unique concept, something totally different in terms of entertainment value. We're targeting the second quarter of 2012." 

Landmark Group, which owns the FEC Fun City is looking to open seven new outlets in the next seven-eight months.

Landmark's Head of Food and Leisure Era Malek explains "business is doing well for us. We've grown almost 15% in same store sales and the business has grown 30% over the last year with new openings."

Among challenges the industry faces include development of new technology. Here Vivekanand explains "today we have a problem. Every house with a child which is my target market has either a computer or some form of gaming device, so I'm always competing against them. Because of that, we aim to ensure everything we put in an arcade offers superior entertainment compared to what they get at home."

The other big challenge in the industry is that it is not well recognised by the banks. While they're quick to finance a real estate project, they are not quick to finance an entertainment project.

Concludes Vivekanand "banks need to understand what kind of cash flow drives this industry."

11th April 2011 - NEW WAVE OF WATER ATTRACTIONS UNVEILED AT DEAL

12th May 2010 - GO KARTS SET TO BE THE NEXT HOT FEC DEVELOPMENT TREND