Gulf Cooperation Council (GCC) governments can generate an incremental of $3.4 billion annually by aligning investments in the leisure and entertainment sector (L&E) with consumers’ needs, according to a new insight by the Ideation Centre, the leading think-tank for Strategy&, part of the PwC network. GCC countries are investing significantly to develop leisure and entertainment sectors to improve quality of life, celebrate national identities and diversify national economies.
Bahjat el Darwiche, partner with Strategy& Middle East, said: “L&E activities impact society’s well-being positively in a number of ways, through engaging nationally relevant culture and art activities, increasing citizen’s participation in recreational events and affirming belonging among diverse groups of people — which all leads to a higher quality of life. However, to get the most from their L&E initiatives, GCC governments have to prioritize investments to match the specific needs of the sector’s consumers.”
According to the report, Saudi Arabia is investing heavily and introducing major changes with the aim of building a thriving L&E sector and a comprehensive offering across segments, in line with Saudi Vision 2030, the national development programme and quality of life programme. As part of this effort, the government has created new entities such as the Ministry of Culture, the General Entertainment Authority, and the General Sport Authority — and there will soon be 11 more culture subsector bodies that will focus on developing areas such as visual arts, performing arts, film and music.
The United Arab Emirates, Qatar and Bahrain, all include L&E in their national visions and plans, with a primary focus on celebrating culture, heritage and national values by investing and promoting their arts and culture ecosystem. Kuwait and Oman, however, consider the economic impact of these activities, indirectly.
To understand what the public’s current consumption levels and preferences are, the Ideation Centre surveyed 1,200 consumers in the six GCC countries, and included nationals, as well as Arab, South Asian and Western expatriates. For this purpose, the L&E sector was defined as comprising of six categories of activities, namely: home recreation, visual arts, live entertainment, neighbourhood recreation, mega parks and sports. The survey highlighted key findings in relation to L&E consumption preferences and levels:
n GCC citizens and residents place a premium on access to L&E options. Two-thirds of respondents see L&E as a “must” for quality of life and prosperity.
n Moreover, respondents see value in improving the quality and selection of L&E offerings. Among the primary benefits they perceive are a better lifestyle and increased happiness (69 per cent of respondents), stronger family ties (50 per cent of respondents), and stronger social connections (39 per cent of respondents).
n Interestingly, GCC consumers reported generous spending on L&E activities, and that they are willing to spend more.
n Overall, GCC consumers claim to spend an average of 6.2 per cent of income on L&E. By comparison, the average household in the UK spent around 4.2 per cent of its income on the same L&E categories in 2018, according to government reporting.
Karim Sarkis, Senior Executive Advisor with Strategy& Middle East added: “Based on consumers’ self-reporting, an improvement in L&E offerings could potentially lead to an increase in spending by over $3.4 billion a year across the GCC. More than 78 per cent of respondents showed willingness to increase their spending on L&E if the offerings were more aligned with their needs. This would correspond to an average increase in spending on L&E activities of 8.5 per cent per household.”
An assessment of the current and planned supply of offerings (in absolute and in proportional values) across visual arts, live entertainment, neighbourhood recreation, sports, and theme parks was conducted, providing an understanding of the value proposition of each country.
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