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AMUSEMENT AND THEME PARK BUSINESS IN INDIA.Ms. Popsi Pranita DasMBA Finance, Ravenshaw Business School.

ARTICLE INFO

Article HistoryReceived 14th Nov 2018Received in revised form 24th Dec 2018Accepted on 29th Dec 2018

Corresponding author.E-mail : popsi.putuli@gmail.com

Introduction:Presently tourism industryplays a significantrole

in contributing factor to the economy of any country. Themeparks and amusement parks being the part of the tourismindustry also play a vital role to any economy.Amusementparks or the theme parks are there for more than an threedecades. The Disneyland by Walt Disney's in the southernCalifornia is the first theme park in the word which wasstarted in July 17, 1955.

With the increasing demand of the experientialtourism concept, the theme park/ amusement park conceptis picking up.Theme parks are venues that are based on aparticular theme or an idea; and the accompanyingnovelties, rides, shows, attractions, accommodations andother facilities in theme park are also based upon the theme.For instance, in the US there are theme parks that are basedon theme of Harry Potter, Star Wars, etc.

Global theme park market has increased at asignificant CAGR during the years 2012-2016 andprojections are made that the market would rise in thenext four years i.e. 2017-2021 tremendously.Technavio'sanalysts forecast the global amusement park market togrow at a CAGR of 10.16% during the period 2017-2021.Currently there are 1800 plus amusement parks ortheme parks worldwide. Asia has highest number ofamusement parks with 35% followed by North America33%.But North America experience more attendance than

ABSTRACT

KEY WORDSEmerging market, Theme park,Amusement parks, Revenuegeneration, Ambience

Purpose – The purpose of this paper is to study about the theme parkbusiness in India and its impact on the Indian tourism industry.

Design /approach - The data is collected from different journals.

Research limitations/implications – This study is not backed up withthe numericaland direct interaction with the consumers or the end users.

the Asian parks. In terms of revenue North America have49% global share as compared with Asia 32%. Accordingto the World Tourism Organization (WTO) predicted,theme park is one of the three trends of the development ofinternational tourism right now and in the future. Withthe Disneyland settled down in Shanghai,China the themepark become the most talked topic of whole world and theacademic research focus.

The theme park development stage is divided intofour generations. The first generation of relying on naturalresources, the second generation paying attention to urbanentertainment, the third generation is given priority to withsimulation, miniature landscape, and the fourthgeneration which is mainly based on three-dimensional,four-dimensional,7D park in Japan, animation, science andtechnology.

Objective of the study:India is the growing market in the amusement park

and theme park business but very less research is done onthe subject. In the present scenario it is one of the majorcontribution factors to the tourism industry in India. Thisindustry is a capital intensive industry as a small projectalso requires huge capital so a proper research onInvestment and revenue generation ( ROI) can be studied,this sector also requires study on the operational andworking capital structure to meet the daily requirements,with the changing technology the guests expectations are

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also changing , from 3D to virtual reality rides,7D andguests service.So, a research can help for better study inboth project finance and operational aspect of theme andamusement parks. So, it has a huge potential for the futureof tourism industry as it can generate huge jobopportunities, area development and wealthmaximization. Hence, this industry requires theresearchers notice for better study and investments andfinancial models.

Area the study covered:This study will try to analyze how the theme park

or the amusement park industry in India will affect theeconomics and growth of travel and tourism industry inIndia, how to improve the guest services and experienceas compared with the international market and players.With globalization and improved information, technologyand transportation facilities the guests expectation areincreasing day by day and the guests awareness aboutthe international theme park or amusement park are atfinger tips.To meet these changing demands, this studywill help to know target market and existing new productsdevelopments and it will also try to focus on differentaspects like revenue structure, market players, safety,facilities in the parks etc,In every business the bottom lineand the wealth maximization plays a very vital role andthis study will help to know more about the profit marginsof amusement and theme park industry, FlawlessOperations in the park plays a very vital role. Startingfrom the entrance, parking, ticketing, security, rides, shows,ambience, merchandising, food, information all plays avery important role and the study of the future prospect ofthis industry will help the government and the investorsto expand this sector and meet the guests’ expectations.

Key international players- Cedar Fair Entertainment- Merlin Entertainments- SeaWorld Parks & Entertainment- Universal Parks & Resorts- Walk Disney Parks and ResortsOther prominent international players -Beto Carrero World- Chimelong Paradise- Efteling- Europa-Park

- Lotte World- Ocean Park- OCT Parks- Parque Mundo Aventura- Experiencias Xcaret Parque- Samsung C&T Resort Group- Six Flags Entertainment- Tivoli GardensMarket driverWith the growing spending capacity and change

in the customers demand and life style in the market thereis a noticeable increase in the spending on leisure andentertainment. Presently the guests want to spend moreon the experiential tourism where the guests can feel andbe the part of the activity. Today’s guests don’t just wantto see the monuments rather they enjoy having laser or alight show to visualize the history behind the monuments.

Market challengerThe major challenges for theme park and

amusement park industry is the availability of alternativesources of entertainment(Malls, indoor game zones), travelexposer to the international market players, fast changingtechnology and theming etc.

Revenue Structure:The spending trend in theme parks consists of

admission fees (ticketing), food, souvenirs, up chargedattractions & rides and other related purchases (photo)made at the parks. The amount of money people spend onmerchandise, up charged attractions and food is tends torelate closely to attendance and to the amount of timepeople stay at a park. Major proportion of theme parkrevenue is generated from ticket sales.Sale of merchandiseand food & beverages through retail outlets andrestaurants located inside the park are anticipated to bethe key sources of ancillary revenue for amusement parks.For the maxcimum utilization of the infrastructuralresources and to increase the revenue now a days differentparks have started extending the services of events likelive shows, corporate conferances, weddings andcelebrations.

As per IAAPA (International Association ofAmusement Parks and Attractions) the revenuebreakdown for a theme / amusement park:

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As per IAAPA study the ideal revenue structure ofthe theme park can be 53 % from admission fees, 4% frompaid games, 1% from sponsorships, 5% from sales ofmerchandising products, 1% from paid parking, 13% fromother services like clock rooms etc and 28% from F & B (FOOD AND BAVERAGES) :

The park must have enough opportunities for theguests to spend money inside through bettermerchandising, photography; F&B push carts, specialevents, paid games, evening entertainment etc.

Parks also plan for the revenue sharing model byspace sharing with different brand retail outlets andbranded food outlets and few of the parks have also explorethe opportunities of corporate sponsorships.

INDIA AND THEME PARK BUSINESSAmusement Parks in India attract over three crore

visitors annually and contribute nearly 40 percent of thetotal leisure industry turnover which are key drivers ofgrowth among the services sector in India. According tothe report of FICCI & KPMG the Indian theme park industrygrew at 10.25 per cent in 2016 to reach Rs 2930 crore, upfrom Rs 2660 crore in 2015. Increase spending in the leisureindustry, investments expects this industry to grow byINR 69.8 billion by 2021 at CAGR OF 19.1%. This industryis slowly becoming one of the major contributors to theleisure industry. Amusement park industry in India

Source: Global Industry Analysis report

Source: IAAPA EDUCATION CONFERENCE-2010(IAAPA)

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includes Water Park, film based theme park, AdventurePark, Family entertainment center, Snow Park, museum,Eco Park etc. India has 150 theme parks in different statesof India. The domestic amusement park industry isestimated to grow to at least Rs 4,000 crore by 2020,according to Indian Association of Amusement Parks andIndustries. But still the Indian theme park market is in theinfant stage as compared to the International market.

There is a substantial growth in the amusementparks and Family entertainment center business in India.This industry has also contributed to the growth of theamusement park ride manufacturers, infrastructuredevelopers.Amusement Park industry contributes 40% ofthe leisure industry turnover. Currently for a populationof 1.15 billion in the country, there are only 120 amusementparks and 45 Family Entertainment Centers. This indicatesthat the growth potential of Indian amusement and themepark industry is substantial. Transport corridors likeexpressways and the Metro line are bringing an increasingnumber of people closer to entertainment hubs.Growth ofIndia's retail sector had been the main driving force for theamusement industry in India.The shift in the choices ofthe domestic tourist from pilgrimage tourism to leisuretourism. The foreign developers are also stepping into theIndian amusement industry through collaborations withIndian companies for the expansion of the industrythrough capital investments and skill sharing.

Component of the theme parkThe major component of a theme park or amusement

parks which attract the guests is rides , attractions liveshows and entertainment, apart from that guests alsoneeds better facilities inside the park such as parking, food,drinking water , transportation( internal), merchandising,shades. Big parks also have hotels and resorts inside theirproperty to attract the guests to spend more time.

The major players in the Indian market are: Ramojifilm city, Adlabs Imagica, Wonderla, Essel world,Niccopark ,ATAPI, VGP Universal Kingdom .

A basic principle of theme park operation is:GATE REVENUE= F & B + MERCHANDISING +

OTHER UPCHARGE INCOME.The revenue from the sale of the tickets and

admission accounts to 75 % of the total revenues and 25 %from non-ticketing revenue of the Indian theme park butglobally it is 45% and 55 % respectively. We expect a changein this due to increase in the guests spending inmerchandising, f & b and other up charged and attractionsgames etc.

Indian theme park caters more domestic tourist thanthe international tourist.

SWOT ANALYSISA SWOT analysis will help us to know the 4

dimensions of the theme or amusement park business inIndia and its impact to the economy.

STRENTHS–The main strength of this industry are the support

from government in terms of the FDIs, infrastructuraldevelopments, single window clearance for the projectsand the support and introduction of the GST and bycontinuous improvement in the rate by reducing it to 18%from 28%, with the increase in the income opportunitiesthere is a positive trend in the increase in the guest spendingand preference,Constantly innovative in new rides andattractions

WEAKNESSES –Few major weakness are the high capital

investments, high operational cost , most of the parks inIndia is family owned so the investment flow is very lessbut recently two big parks in India ( Wonderla & Imagica)opted for IPO issue, better and competitive technology with

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more theme based, opportunities for the guest spendinginside the parks.

OPPURTUNITIES-This Industry in at its infant stage so the

opportunity of growth is very high as the governmentsupports it, More innovative in theming and rides, specialevents for pulling crowd, the property infrastructure canbe used for weddings and MICE after park hoursand asthe world has become small due to better transportationfacilities the guests can travel to the international parks sothe expectation levels have raised in offerings and services.

THREATS-The threats for this industry are Gaming zones in

Big malls, Competitive business environment ,Theme parkindustry have peak, low and medium seasons, rapidlychanging customer preferences and qualified HRpersonnel in theme park and amusement parkmanagement course (Presently HR qualified in hospitalitymanagement are being preferred)

NEW TRENDS IN INDIAN THEME PARKMARKET

In recent years Indian theme park market is takingsmall steps towards the development of this industry.There are several new trends have emerged. This industryis growing and to be at per with the international standardsthe new innovations like VR games, theme basedattractions, safety standards in the parks and rides, qualityof the rides, edutainment options for the students, betterdesigning and theming aspects, quality of live shows andentertainment, implementation of the new technology inthe ticketing system (RFID) and rides, educative staff, betterguest experience, implementation of new pricing strategies(Differential pricing) and marketing strategies , newpromotional strategies in new platforms like social media,Government support – in regards to the reduction of theGST from 28% to 18% and single window clearance of theproject, real estate players entering the market, re-investment in the existing park, new source of revenuethrough the sponsorship and revenue sharing model, andthe parks operated by corporates (V-Guard- Wonderla,Essel Group- Essel world etc.).

Growth Divers of the Indian Theme park businessThe major growth drivers of the Indian theme park

business are increase in the spending capacity of theconsumers , competitions from the international players,learning about better theming and usage of technologyfrom the international players, with the changes in the

visitors demand there is increase in the new market andbetter promotional strategies like using social media, apps,websites etc, introduction of new and better quality rides,support from government in terms of FIDs, infrastructuredevelopments , single window clearance ,urbanization,and better development of the theme based attractions.

Challenges in the Indian Theme park businessThe challenges in the Indian theme park business

are Government Support in terms of subsidies for Land ,power supply , water supply , finance support and singlewindow clearance for the project, institutions for thequalified Human resource , better safety standards andbetter quality rides and the designing and concept aspects.

Weather Condition: attractions that can be offereddespite unfavorable weather conditions and to makesignificant investments into interior attractions. Forinstance Efteling, a theme park in the Netherlands, spentUSD 35.0 million to establish an indoor attraction knownas Symbolica: Palace of Fantasy and a new concept of nighttourism with lighting, shows, water leaser shows etc.which willhelp the guests to spend more time in the parkand this in turn can affect the in park sales of F&B andmerchandising etc.

Characters:Amusement parks with themes basedon fictional characters make popularity among visitors.These parks are also places where children can meet andgreet costumed characters (Exp: Micky mouse of Disney).

Technology: In the changing modern andtechnological world the amusement park market is alsoneeds to cope up with the changing technological worldwith the implementation of modern technology in ridesand RFID system which involves huge investments.

Investments: This industry involves huge capitalinvestments in land, rides, conceptualization, technologyetc.

Experts: This industry needs lot of experts forconceptualizations, theming, designing etc. But India haschallenges in HR experts. So, development of educationaland vocational institutions in the area of Theme park andAmusement park management studies and study modulesrequired.

Marketing: To cope up with the competitive marketnational and internationally we need to developcompetitive marketing strategies like loyalty program,Differential pricing strategies, special pricing strategiesfor groups like schools and corporates, corporatecollaborations (credit card companies, etc.) , innovative

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advertisement and PR , optimum utilization of the socialmedia platfroms.

Additional Revenue Generation: sponsorships andspace sharing model.

Research and Development: This industry has veryfew researches.

Special events: Park wide special events for specialday’s celebration like Mother’s Day, Valentine’s Day,Diwali, Independence Day, live shows etc. Now a daysparks are also generating revenues by organizingweddings and MICE during there off seasons and nighttime when the park off from their regular operations .

Contribution to the local economyIncrease in number of parks has a benefit to the

locals market. Apart the increase in employment, there isdevelopment to infrastructure. Theme Park andAmusement Park industry play a major role in tourismboost in the area as well. This has been identifiedinternationally, wherein theme parks enjoy strongregulatory support, with governments putting updedicated infrastructure for connectivity, equity and taxsubsidies. This in turn helps the industry to develop itspotential to enhance the consumer experiences for evenbetter output. While in India, the industry is still at anascent stage, it is reeling under tax pressure with 18%tax applicable.

Major markets for Amusement parkAlthough India is still an emerging marking for

theme park and amusement parks but major market sharefor theme parks and amusement parks are basically thetire one and tire two metro cities like Mumbai, Pune,Hyderabad, Bangalore and Delhi.

Amusement parks in mall conceptThe traditional shopping mall that only contains

shops seems to be an ending story. Now more than ever,visitors are seeking multiple experiences apart fromshopping.Entertainment offerings at malls have generallybeen limited to dining and maybe a multiscreen movietheater alongside the main draw of traditionalretailers.Experiences with entertainment-focused tenantsmore likely to be found in an amusement park than ashopping center. So, a new emerging trend is emergingwhere the amusement park experience are also providedin the malls. Go-kart racing, indoor rope climbing andlaser tag are the activities which are now a part of theshopping malls.

Conclusions:The most encouraging aspect of a study revel that

70% of the audiences agree that Theme/Amusement parkssuccessfully deliver on the key attributes of entertainment.It significantly adds value to local economy as well astourism while giving new avenues of entertainment ofInternational standards to Indians right here in India.

References• KPMG- FICCI report-INDIAN Media &

Entertainment Industry Report-2016, 2017• IAAPA reports- T H E I N T E R N AT I O N A L A S S

O C I AT I O N O FA M U S E M E N T PA R K S A N DAT T R A C T I O N S - 2017 ANNUAL REPORT-THEME PARKS, AMUSEMENT PARKS ANDWATER PARKS

• The TEA / AECOM Theme Index Museum-GlobalAttendance report-2016,2017