“We will bounce back and expand,” says Mohamed Attia, CEO, SALA (Salman Al Hokair Leisure & Attractions) Entertainment, commenting on the preparedness to reopen its entertainment centres in Saudi Arabia. “We are ambitious about our growth plans for 2020 and beyond. We will continue to open our entertainment centres within Arabian Centres Company’s (ACC) shopping malls.”
SALA Entertainment is a subsidiary of the Salman Al Hokair Holding in Saudi Arabia. Its portfolio of entertainment concepts includes Billy Beez, KidZania, Strike 10 and the Octo brands – including Octo City, Octo Karting, Octo Snowpark and Octo Lasertag.
SALA Entertainment’s expansion plans remain firm despite the on-going pandemic. The company plans to open over 22 new facilities across the Kingdom in 2020, including all its brands. “We have signed up about 861,000 sqft of space within the ACC properties to open different entertainment concepts under our portfolio,” Attia shares.
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Optimistic amidst challenges
The current situation is challenging as entertainment centres remain closed in the Kingdom, but Attia is optimistic.
“We had to close our facilities in the Kingdom temporarily. But we continued paying salaries to our people. At the same time, we are continuing with the design and construction of our new concepts, which involves huge investment. At another level, we are preparing ourselves to reopen the existing facilities when the restrictions are lifted by the government, which also involves cost, as we have to sanitise the facilities and operate at reduced capacity. So, challenges are many but there is optimism too,” he adds.
Is there any support from the government entities and landlords to partially overcome losses?
“We are not able to generate revenues; that’s the loss we are incurring,” Attia points out. “On the other hand, the government in Saudi Arabia has been incredibly proactive in offering support to businesses. For instance, 70% of our employees are Saudi nationals, who are being paid by the government. It is part of its social support policy in response to COVID-19. That is a huge support for us, as it immediately reduced our payroll costs. In turn, as a company, we will stay committed to increasing the Saudisation of our workforce to create more employment opportunities for the local population.”
“Concerning landlords, our facilities are located within ACC, as of now. And they have been incredibly supportive by announcing rent reduction,” he continues.
Preparedness for reopening
Turning the focus to footfall, once the entertainment centres can reopen in Saudi Arabia, what will be the correct approach towards resuming operations?
“We will follow a gradual and responsible approach towards reopening our facilities, irrespective of the footfall. It is still not clear if entertainment centres will be allowed to reopen in Saudi Arabia on June 21. Still, on our part, we are undertaking adequate measures – thorough sanitisation and making provisions to operate at a reduced capacity of possibly 50% – to be prepared to welcome our guests,” Attia states.
Commenting on operating cost versus reduced capacity, he reasons that this will be specific to each entertainment concept. “A high capacity concept like Octo Snowpark will not justify the operating cost, as long as we operate at a reduced capacity. On the other hand, with a gate pass concept at Billy Beez, the operating cost can be controlled as the number will be limited. So, in the case of FECs, depending on the size and number of employees, the operating costs will vary.”
What the future holds
In summation, Attia comments on the future of leisure and entertainment. “Like every sector around the world, the leisure and entertainment industry will also change. A lot of that change will vary from one concept to another and its ability to adapt. Overall, I think, the demand for leisure and entertainment will increase, as consumers will be more willing to spend on entertainment and F&B over other segments within retail. We are working extremely hard along with our manufacturers, suppliers and landlords to ensure we have the highest quality products within a safe environment.”
Finally, is a country like Saudi Arabia – boasting a sizeable local population – expected to recover quicker than expatriate-driven countries, like the UAE? Especially in case of a segment like leisure and entertainment that involves discretionary spending.
“A country like Saudi Arabia can recover quicker than other countries that are more expatriate-driven,” Attia responds. “If Saudi Arabia is financially supporting its local population; in turn, the people will also spend money as soon as various activities restart, therein strengthening the local economy.”