DXB Entertainments, the operator of Dubai Parks and Resorts, has said it will cut operating costs by 20 per cent this year after posting losses of AED292m (US$79.5m, €73.1m, £61.8m) in the first quarter of 2017.
Compared to a net loss of AED38m (US$10.3m, €9.5m, £8m) when the parks weren’t operational in the same period last year, the result is a blow for DXB, which had been forecast losses of AED110m (US$29.9m, €27.5m, £23.3m) for the first three months of the year.
General, administrative and operating expenses rose by almost 10 times to AED333.9m (US$90.9m, €83.6m, £70.7m) in the first quarter from AED39.6m (US$10.8m, €9.9m, £8.4m) for the same period following the park’s launch,
which was staggered through December last year.
“The first quarter’s financial and operational results reflect the early stages of Dubai Parks and Resort’s operational ramp-up,” said DXB Entertainments CEO, Raed Kajoor Al Nuaimi.
“A key strategic imperative for the business for the year is to reduce our operational cost base by 20 per cent compared to the initial projections. We are well on track to meet this target by year end, having implemented a wide range of cost efficiency programmes.
"Some costs have been lower than our original expectations,” said a spokesperson for DXB. “We have been able to identify efficiencies by streamlining some of the functions across the parks. The cost reductions are in relation to the original costs we had anticipated in our projections."
During the first quarter, the parks welcomed a total of 586,355 visitors, with around 40 per cent of traffic coming from outside the UAE.
According to the UAE’s tourist authority, visitor numbers were up by 11 per cent to 4.57 million during the first quarter compared to the same period last year. Dubai is also experiencing a large increase in Chinese and Russian tourists following the UAE’s decision to grant visas on arrival to citizens of those countries.
“We expect our visitor numbers to stabilise by the fourth quarter of 2017, as we gain further traction with global tour and travel operators,” said Nuaimi.
