A tectonic shift in consumer behavior is currently underway in the MENA region, with residents increasingly preferring experiences over products, triggering a massive surge in footfalls at theme and water parks, public attractions and high adrenaline-raising motor sports such as racing, catapulting the region’s leisure and entertainment industry to hit a projected $14 billion market by 2028, a new research revealed.
The post-pandemic surge in tourist arrivals in the region, with Saudi Arabia said to be seeing the highest number of international travellers in 2023 at an estimated 30 million – double than the 2018 figures – closely followed by the UAE at about 25 million, is further fuelling the rising trend of a consumer shift towards experiences over that of the age-old obsessions with products, driven by the much-publicised shopping festivals and global discount sales events such as Black Friday sales, the study by the Middle East arm of RedSeer, a global consultancy specialising in digital sectors, said.
Saudi Arabia’s leisure and entertainment sector is poised to power the strong growth trajectory of the industry in the region, with as many as 10 high-end leisure and entertainment destinations, including SEVEN Theme Park and Six Flags Qiddya, are set to open over the next 12 months, helping the country to account for the significant share of the $14 billion market over the next five years, the study said.
“MENA leisure and entertainment sector is expected to see about 250 million visitors contributing $14 billion to the [region’s] economy by 2028,” RedSeer said.
Saudi Arabia will be one of the fastest-growing leisure and entertainment markets in the region, with around 85 million visitors contributing $5 billion to the country’s economy during the period, it said.
“All this is driven by consumers’ wish to go after experiences over products,” said the RedSeer study.
Sandeep Ganediwalla, Dubai-based Partner at RedSeer Strategy Consultants, said the expected surge in the leisure and entertainment sector in Saudi Arabia is due to the massive drive initiated by the Saudi authorities to diversify the country’s economy.
“The Saudi [non-oil] sector economy is currently at an accelerated pace never seen in any other part of the world,” Ganediwalla said.
He said there are more than 10 new large leisure and entertainment destinations in Saudi that will open in the next 12 months alone.
Consumers showing strong inclination onwards experiences
The RedSeer research revealed a high percentage of MENA consumers – 76 percent and 75 percent respectively – preferring visiting public places and theme parks and public attractions such as entertainment zones and iconic creations such as Burj Khalifa over mall or retail shopping.
Performing sports activities or watching adrenaline shooting sports events such as Formula Racing and Tyson-Fury fights also figure high on the consumer wish list, with as high as 76 percent of MENA respondents affirming their desire for them.
Eating out and ordering food is another ‘rising experience’ MENA consumers are longing for, with as many as 66 percent of respondents expressing their rising inclination to them.
Compared to these, the closest in product preference is the fashion products purchasing, with 72 percent of MENA consumers participating in the RedSeer study, listing this as their highest preferred activity.
Electronics purchasing figure second highest among their preferences in the product category, scoring 66 percent responses.
Consumer preference for asset acquisitions such as buying automobiles or real estate fall way behind, with only 46 percent and 37 percent, respectively, listing them as their preferred activities.
Surge in leisure and entertainment sector aiding business of several ancillary players
The rising trend is also triggering creation of niche opportunities and surge in business for a whole lot of ancillary industry and tech-driven players associated with the leisure and entertainment sector, including souvenir imaging, in the UAE, Saudi Arabia and other countries in the region, creating a $1 billion market opportunity.
Dubai-based Digiphoto Entertainment Imaging (DEI), Photogenic and Cashman are among the leading and emerging companies, hitching on to the rising leisure and entertainment sector, contributing to the sector’s growth in their own way.
“Our story started when Dubai was moving from product-driven (shopping festivals) to experience-driven. We now serve Burj Khalifa, Atlantis, and Aquaventure, amongst others, and are fortunate to build a global enterprise now with some of the well-known players in the leisure and entertainment sector such as Disney Shanghai as our client,” K.S. Ramakrishnan, MD and CEO of Digiphoto Entertainment Imaging (DEI), told Arabian Business.
“[Of late], Saudi Arabian leaders have also realised the need for [setting up] experience projects to drive their economy. This will create many new opportunities for entrepreneurs like us,” said Ramakrishnan, whose company is billed as the world’s leading souvenir imaging provider to theme parks, water parks, resorts and leisure attractions.
The RedSeer study also listed souvenir imaging as a large part of the niche opportunity, projected to emerge as a $300 million market from the current surge in MENA’s leisure and entertainment industry.
Ganediwalla said the existing and new leisure and entertainment destinations in Saudi Arabia will provide significant niche opportunities for players.
“For example, while food and beverages is the largest opportunity after ticketing, souvenir merchandise itself will become a $350 million opportunity,” he said.
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