• Thank you.

• My name is Andreas Andersen. Been in the industry for almost 20 years.

• Started out as a young lawyer with a keen interests in rollercoasters, and

since I got my first job at TIVOLI Gardens in Copenhagen, I have not

looked back.

• I absolutely LOVE the attractions industry, although my mother still from

time to time asks me, when I will get a real job.

• This coming presentation will build further on the presentation that my

colleague Karen Staley did at last years conference, and it really have 3

parts:

• I will start with (an attempt of) drawing up a picture of the global

attractions industry.

• Thereafter I will present some of the primary drivers growing – but

also changing – this global world map.

• Lastly I will summarize some of the learnings I have made,

navigating this industry of rapid change. Totally subjective, but

universal as they apply to both Sweden and South Africa.

• But before I do so, I will shortly present the two organizations I represent

here today: Liseberg and IAAPA.

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• If we start with Liseberg, this is one of the oldest amusement parks in

Europe.

• The modern Liseberg amusement park was founded in connection with a

large industrial exhibition in 1923, but the park itself has its origins in a

manor, Liseberg, meaning Lises Mountain, built in 1753.

• Since 1923, the park has developed from being a fairground, to becoming

an amusement- or theme park.

• And on the same journey, the park has gone from being a rather regional

event, to be the biggest tourist attraction in Sweden, and a destination in its

own right with more than 3 million visitors, 3000 employees and a turnover

of 140 million Euros.

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• I am also here representing IAAPA. The International Association of

Amusement Parks and Attractions.

• IAAPA was founded in 1918 in Chicago, and the aim was to ’form a true

business association for the amusement park industry dedicated to

cooperation, mutual welfare, educational objectives, and protection against

unjust taxation’ as it was written in the first set of bylaws.

• To begin with, the association was entirely american. But in the 1930’ies, the

first international members came on board, and in 1972, the ‘I’ was added to

the Association of Amusement Parks and Attractions, making IAAPA the first

global association representing the attactions industry.

• Today IAAPA represents more than 5000 members worldwide (1300 from

Europe, Middle East and Africa)

• The association represents all types of attractions, although fixed-site

amusement and theme parks are still the core of the membership.

• This is also why a lot of today’s presentation is centered around these

types of facilities, but it has the simple explanation, that we simply know the

most about this constituency.

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• IAAPA’s activities are quite simply to ’serve the membership by promoting

safe operations, global development, professional growth, and commercial

success of the attractions industry’ as it is formulated in the mission

statement.

• This is done through gathering and distribution of data, education and

training, creating meeting places for the industry at expos and events and

promoting the industry’s interests to legislators and media.

• ‘What is the attractions industry?’ you might ask. That’s a good question,

and not entirely simple to answer.

• As with most sub-industries within the tourism sector, the attractions

industry is characterized by being very diversified, and somewhat

dispersed. This also means, that the industry – in general – is not very

data-driven.

• In its turn, this has the consequences, that it is actually very difficult to paint

a global picture of the attractions industry as a whole. However, we do

know some things …

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• For example we know, that there are approximately 2 000 amusement

parks around the world. How to define amusement parks becomes more

and more tricky, I will come back to this, but the 2 000 number is a pretty

good estimate.

• Here I have listed the top 10 parks on a global scale, which illustrates, that

we know a ton about the bigger parks, but not very much about all the

smaller players.

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• The same applies to water parks. This is a growing industry, but very poorly

organized.

• The world water park association does a great job in North America, while

the European Water Park Association is organizing most German

operators.

• But again, there is very little global data available.

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• The same can be said about the museum constituency. According to

Museums of the World there are about 55 000 museums worldwide.

• And the international council of museums comprises 30 000 members in

137 countries.

• But again, very little data to illustrate the economic and cultural importance

of this sector.

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• The same is the case with zoos and aquariums.

• We have fantastic associations representing this constituency on both

global, regional and national scales.

• WAZA, EAZA, AZA etc all do an amazing job when it comes to animal

preservation and education, but they are less focused on the business side

of things.

• This means we have very, very little data on animal attractions in general.

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• To summarize, there is a lot of things we don’t know, when it comes to the

global attractions industry.

• We don’t know the number of attractions, annual visitation, revenue or

employees. And, this is a huge issue, we don’t know what the economic

impact is, of the attractions industry.

• And – first and foremost – we know almost NOTHING about emerging

markets. For example the South African one.

• This is NOT good, when we talk to legislators around the world. Because

the attractions industry is a huge industry, of vast importance to tourism in

general.

• People do not travel to travel. They travel to experience. And as such, you

can say that attractions in many ways are the engine of the overall tourism

industry.

• Even though there are a lot of things we don’t know, there are also things

we DO know. Especially when it comes to amusement and theme parks.

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• We do for example know, that the global growth is very uneven, and that

market shares are shifting.

• We see rather limited growth in North America and Europe, while we see

an expanding industry in Middle East, Africa and Asia.

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• We also see a general consolidation and professionalization of the

attractions industry.

• The corporate groups are leading the pack when it comes to growth, and

we see new groups being set up every year.

• At the same time we also see the market shares shift between the groups.

Disney has lost a little traction, with for example Universal and the Chinese

Wanda Group growing a lot the last few years.

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• If we take a closer look at amusement and theme parks, and the latest

forecasts from IAAPA; you will see this uneven growth globally, with Asia

and MENA really seeing the highest – forecasted – growth rates the coming

years.

• But again; we only have the north part of the African continent covered by

these reports; not central or the southern part of Africa., which is where we

expect t see a lot of growth in the years to come.

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• If we zoom in on one region, which we actually know a lot about, a few

figures can illustrate my point about how valuable data can be, when

communicating with government officials or media.

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• We know that we in Europe have about 300 amusement parks, with about

150 million visitors. These parks represents 5 billion Euros in turnover,

and employ more than 50 000 people.

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• The economic impact of the attractions industry is huge, as Donald Trump

would say.

• About 10 billion Euros in total, with 600 million Euros in Capex every year,

and more than 1,2 billion in paid taxes.

• If we add other types of commercial attractions – zoos & aquariums, water

parks, museums, midway attractions, etc – we can more than double these

numbers.

• But what drives these numbers? And what drives the overall growth of the

global attractions industry?

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• This is of course a complex question to answer, but in this second part of

the presentation, I will try to present some of the most important drivers of

this change – and of the growth of the industry in general.

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• First of all, we all have to understand, that we are operating in a global

market. This is of course more apparent in some regions rather than

others, but still:

• We do no longer just compete with attractions up the road, but attractions

all over the place.

• A transparent marketplace through www and social media, and increased

mobility through low cost airlines, has changed the attractions industry from

being almost solely regional or locally focused, to becoming a much more

dynamic, global industry.

• The roller coasters we build are compared with what guests can experience

in Orlando. The animal exhibits we present will be compared with exhibits

in Singapore. And the service we provide will be compared what the guest

experience in Dubai.

• You can say, that the marketplace is merging into a giant, integral web of

heightened expectations.

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• An example of this globalized market place is TIVOLI in Copenhagen, the

park where I started my career. In 1996, about 15% of the guests did not

have a Danish passport. Last year the same number was 29%.

• Sweden and Norway are of course big markets, but North America, and

especially Asia and Middle East are increasingly important.

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• If we stay in Denmark, we can take a look at one of the other trends

shaping the attractions industry these years. And that is resort-building.

• In other words, the facts that typically amusement parks – but also to some

extend now zoos – are building accommodation, and packaging their

products to accommodate the growing short breaks market.

• This is example is Legoland in Billund, home of the LEGO brick, and the

first LEGOLAND. Over the last 15 years they have almost doubled their

attendance, by building accommodation in and near the park, and today

they have more than 9 000 beds, which is quite impressive given the fact

that less than 25 000 people live in this city.

• LEGOLAND has in other words created on of Europe’s leading family

destinations, in a place which might very well be the most boring city in

Scandinavia.

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• Another well known example is of course the Disney parks around the

globe. This one is Disneyland Paris, with more than 6 000 hotel rooms on

site, now adding another 1800 units next year with what they call Vilage

Nature.

• The dynamic of adding accomodation was once explained to me by a

Disney executive:

• He explained what we all know, that when you add a big attraction to your

line-up, you will experience increased attendance in year one (statistically

about 10%), which will then drop off with 2-3% every year in the years to

come. Which means, that you will have to start a new investment cycle

after 4-5 years.

• This formula does, however not apply to accommodation: When you invest

in accommodation, your revenues increase in year one. And they tend NOT

to drop off. It is therefore a much more consistent investment for the parks

moving down this particular road.

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• One of the parks that has taken this road, and refined it more than anyone

else, is Europa Park in Rust, Germany.

• The park opened in 1975 as a showcase for the MACK Company, building

amusement rides.

• Today the park has more than 5 million visitors, making it the second best

visited park in Europe after the just mentioned Disneyland in Paris.

• But what is even more impressive, is that Europa Park is by far one of the

most profitable parks in the industry. Not at least due to the 6 onsite hotels

and camp sites.

• A resort that in 2018/19 will be expanded with additional 4 hotels, and a

large indoor water park.

• To give you an idea of the quality of this place, I have a short film

presenting the park (very American narration, but pretty pictures).

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• Another very important trend shaping our industry these years is the use of

IP.

• In other words, the use of brands – whether licensed in or the attractions

own developments – to enhance and expand the experience.

• We all know Disney’s ability to move IP from platform to platform. Films

becoming rides (or rides becoming films), rides becoming merchandise,

merchandise being the focal point of communication efforts, etc.

• Disney has the unofficial world championship in this exercise.

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• But Disney is getting rivalled in this sport.

• You have probably all read what Harry Potter did to Universal Studios in

Orlando: 40% more guests in 2011, when the Harry Potter experience

opened.

• Now opening in Universal Studios Hollywood, this park could rival the

neighbouring Disney resort.

• But it is not just amusement or theme parks that use IP.

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• A fun little example is Skånes Djurpark, a small animal park in southern

Sweden, which in a few weeks will open a Shawn the Sheep Land. Very

clever. And a bit of cross over for a park, that traditionally has had more

focus on animals than entertainment.

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• Another fun example is the new Louvre Museum, designed by Jean

Nouvel, in Abu Dhabi, opening later this year.

• The City of Abu Dhabi paid 400 million Euros for the Louvre brand

• And an additional 600 million will be paid in exchange for loans of artwork

from the museum.

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• Another trend, which we have touched upon earlier, is consolidation. In

other words, corporate groups that buy or build parks, zoos, aquariums as

well as midway attractions, and operate these within corporate structures.

• This example is Merlin: With more than 110 attractions around the world,

this is one of the more prominent corporate players in the industry.

• These corporate groups are global players. With global brands. And global,

financial muscles.

• They very often change the market situation, where they operate.

• This because a corporate group has a different perspective than a privately

owned attraction. A capital fund, buying up attractions, will – the minute

they buy – also start thinking about when to sell.

• This means that short term cash flow and volume growth becomes more

important than long term value. In its turn, it means that discounting,

marketing and other initiatives that drives the gate becomes very important.

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• Staying with Merlin, one of the brands they own is Madame Tussauds.

• This has been rolled out with venues all over the world. So called midway

attractions – smaller, indoor attractions on high streets, with 1-2h average

stay.

• The same strategy has been applied with the LEGOLAND brand,

transitioning these into LEGOLAND Discovery Centres in shopping malls

and on high streets.

• It is quite interesting, that most of Merlin’s growth has actually come from

these smaller midway attractions – not from their bigger theme- or

amusement parks.

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• This diversified approach to growth leads into the next trend, namely the

fact that attractions becomes hybrids. We all borrow from each other.

• Museums use theming and storytelling. Theme parks includes animals.

Zoos adds rides. And so on.

• This example is Chimelong Ocean Kingdom. You can really not tell whether

this park is theme park, an aquarium or a zoo.

• Another example is SeaWorld, that includes rides, animal exhibits and

shows, and has been doing so for 30 years.

• This hybridization makes it troublesome for nerds like me to really

categorize and set the attractions apart, but can also create identity

problems, as in the case of SeaWorld.

• But that’s a different story.

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• Another trend driving the industry is growth in tourism and travel.

• Governments in most countries actively promote tourism, and in a number

of countries, particularly in Asia and the Middle East, theme parks are

viewed as a key element in national plans.

• In Malaysia, for example, the government established a fund to attract and

even directly invest in theme parks to develop the tourism industry.

• In China, the government in 2013 removed the ban of approvals for new

parks, which is leading to a surge in new projects with more than 50 parks

currently in the pipeline.

• With Disney Shanghai Resort grand opening just two weeks out.

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• A key to growth is of course also investments. And the

attractions industry is a capital intensive industry.

• If you look at the general benchmarks, amusement and theme

parks has to reinvest approximately 12% of their turnover,

EVERY YEAR, just to stay in business.

• This example is Kolmården, a medium sized zoo operating

outside Stockholm, is opening a new roller coaster next week.

This is part of a 30 million Euros investment over a two year

period, and this in a park with approximately 500 000 visitors.

And, BTW, an example of the crossover and hybridization

trend, I just mentioned.

• I have with me a film showing some of the investments done in

2015 around Europe (as our 2016 what’s new film is in

development), illustrating the diversity and scope of

investments made in our industry.

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• Another trend shaping our industry these years is digitalization. We all

operate in a marketplace, which becomes more and more digital. It

influences all aspects of our business.

• The digital world influences how we communicate with our guests. The

times when it was enough to buy print ads and TV commercials are long

gone. What happens on social media is equally as important, as what is

taking place on the traditional platforms.

• The digital world influences how we develop our product. Even though the

base product is an analogue one, the digital integrates into aps, tracking

solutions, and queue entertainment. At a speed that is increasing all the

time.

• The digital world influences the competitive environment. A few years ago,

a survey was done by German parks, where they asked teenager, what the

primary competition to amusement park is. And the answer was not, as

expected, cinemas, restaurants or shopping malls, but mobile phones. We

are competing on a completely different arena today.

• The digital world influences how we sell and distribute our product. More

and more is moving over to digital platforms.

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• In general you can say, that the new digital world has the characteristics of

being fast, transparent, agile, complex, customer driven, collaborative and

– unfortunately – unpredictable.

• And it is this unpredictability which can sometimes make us freak out.

Because the fact is, that all our business models can – and will be

challenged – in this new digital age. It affects us all. And we are all looking

for these game changers, than can wipe away an entire industry in just a

few years.

• A few examples can illustrate.

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• If we look at digital sales, this is exploding these years, at least at Liseberg.

We are looking at almost exponential growth in what we sell in our

webshop – a trend that has continued in 2016.

• Another dimension of the digitalization of sales is the introduction of

dynamic pricing.

• We all know how we pay different prices for hotels, train tickets and

airfares, depending on demand.

• This will most likely also be implemented in the attractions industry in the

years to come.

• This example is Slagharen in the Netherlands, that has been applying

dynamic pricing for a couple of years.

• Another example is Disney World in Orlando, which has actually just

started June 1st to yield their prices, depending on demand.

• This can of course be a tool to maximize profit, but it can actually also be a

tool to adhere to different visitor groups, with different price elasticity's.

• You can for example have regional visitors, that are far more price sensitive

than tourists, and with dynamic pricing you an cater to both.

• Digitalization is also affecting the actual product.

• Example: Disney Magic Bands. Planning tool. You can pay with your band.

Etc. 800 million USD investment in soft –and hardware.

• But it is also an example of how fast things move. The day Disney Magic

Bands were introduced, were also the day it was technologically dated.

• At Shanghai Disney Resort opening next week, the Disney Magic Band is

replaced by Mobile Phones. With a much smaller investment in

infrastructure.

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• Another example of how the digital is implemented in the actual product

design is taken from my home park, Liseberg.

• I have a small film to illustrate.

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• Last week, we launched a new app, supporting an attraction which was

opened in April.

• Queue entertainment, and a powerful social media too.

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• This brings me to the next trend, shaping our industry; conceptualization,

storytelling and theming.

• It is no longer enough to place a ride on a piece of asphalt, and then expect

people to come. You have to package it. Tell a story. Create emotions.

• This example is AeroSpin, the mentioned new ride at Liseberg this year.

Text is in Swedish, but you will get the point …

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• It is a pretty basic ride. But the packaging – the story about the first

Swedish flight pioneers and the link to Liseberg history – is quite refined.

• And, quite frankly, necessary to build interest.

• Another way of packaging an existing product, is the last trend I am going

to mention today; new seasons.

• In 1996 the first European Christmas Market at an amusement park was

opened at TIVOLI in Copenhagen. Five years later, the Christmas Market

had more than 1 million visitors, and has been copied all over the world.

• The last few years Halloween has been the craze all over the world. Also at

Liseberg. A short video, not for the faint of hearted.

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• We tested Halloween for the first time in 2015. Expected 80 000 guests over a week. Got more than 200 000.

• It’s an example of how to take an existing infrastructure, packaging it in a

new way and reaching new target groups. • I think we will see a lot more of these seasonal events in the years to come.

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• This summarizes some of the primary drivers of growth, at least from my

perspective.

• Much has been left out, but the list gives a pretty good overview of some of

the trends changing the world map of the attractions industry these years.

• But how do you navigate this changing world map?

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• Well, from perspective there are a few golden rules, that will help.

• It is sort of a summary of the learnings I have made, the last 20 years.

• Again, totally subjective, but applicable to all types of attractions and

regions.

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• First of all, learn from your piers.

• Attend conferences like this one. Be part of networks. Use the resources at

hand.

• IAAPA has huge amounts of resources and industry data and benchmarks

you as a member can tap into, and you should.

• The reason why I say this, is because we all run businesses in a very

specialized industry.

• You can’t just drive up the road and benchmark against another plumber or

another retail store. It’s a tad more complicated for us.

• Therefore; use networks like this one to learn. Learn from your colleagues

success, and from your colleagues missteps.

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• Second: Be your self. And be authentic.

• Joe Pine, the inventor of the modern day notion of ‘Experience Economy’

wrote a book about brand called ‘Authenticity’ a few years ago. Can be

recommended.

• He used this quote from Shakespeare’s Hamlet as a starting point for his

analysis.

• There is one part in this play where the most fake of all the characters in

Hamlet, Polonius, says something profoundly real.

• At the end of a laundry list of advice he's giving to his son, Laertes, he says

this: And this above all: to thine own self be true. And it doth follow, as night

the day, that thou canst not then be false to any man.

• According to Joe Pine, these verses are the core of authenticity.

• There are two dimensions to authenticity: one, being true to yourself, which

is very self-directed.

• Two, is other-directed: being what you say you are to others.

• And I think it is very, very true. Be who you are. Be original. Be aware of

your companies DNA. And build on this.

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• And speaking of this DNA, you need to be consistent. It is important to know you are. And

let that be expressed in your strategies.

• Strong brands are consistent. They know why they exist.

• They have defined there DNA.

• They are successful in describing this in a strategy, and translating it into en experience,

communication and … first and foremost …

• They are able to turn there staff into brand ambassadors.

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• Walt Disney once said; you need to treat your employees the way you want

them to treat your guests.

• This is very true. As service companies, employees are the key to our

success.

• In the late 90’ies a management model called the service profit chain was

developed.

• According to this, successful service companies have one characteristics in

common; they all have happy and content employees.

• Based on this observation, a link was established: If you want profitability

and growth, you need loyal customers. Customer loyalty is always a result

of customer satisfaction, which in its turn is a result of the quality of the

service you provide.

• Service quality is always a product of employee productivity and retention,

which in its turn is a result of employee satisfaction.

• In other words; if you want to make money, you need happy guests, and to

get there, you need happy employees.

• This employee focus is super important, but can never override the fact,

that we always have to remember WHY we are here.

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• And that is because of the guests.

• Last year I read a book, which I can recommend, by a guy writer called

Mike Hohnen. He writes about successful service companies, and when I

read this quote, I had a moment of clarity. Because what he describes in

this quote, is exactly the situation we, at Liseberg, were in.

• We at Liseberg had been market leader so long, that we had lost our focus

on the guests. And we had forgotten one fundamental characteristic about

our business model:

• What we are selling, is not what the guest is buying. …

• We are selling entrance tickets, merchandise and candy floss. But the

guests are buying expectations, experiences and memories. Emotions.

• We always (!) have to remember this. That what we are selling, is really an

emotional product. And we always need to have this outside-in perspective

on our industry.

• If we forget that, we are lost, to quote Mike Hohnen.

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• This brings me to the second last point on my navigation list. Think long

term.

• Why do say this? Well, because this has become a bit of a rarity in our

industry. Which is very weird. Because successful attractions ALWAYS

think long term.

• I talked earlier about the consolidation of the industry, and how the capital

fund owned attractions are forced to focus more on the next quarter

earnings than the long term success of the business.

• This is HUGELY damaging, in my opinion. Because the success of

tomorrow is determined by our actions today.

• At Liseberg we try to never think short term, because we know we have

Liseberg on loan from future generations.

• For me this is very powerful. And one of the reasons why I work at a

medium sized regional park in Western Sweden, and not in a big corporate

group.

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• The last point on my navigation list is: Be Brave.

• This may be a bit high-flying, but I really think that when you work with

consumer products (or experiences) in a highly volatile and ever changing

market, you need to be brave enough to change. To develop. To invest.

• A famous Danish philosopher Sören Kirkegaard once wrote: To be brave, is

to loose your footings a short moment. To not be brave, is to loose youself.

• And I believe this very much. If we are not agile, adaptable and willing to

take risks, there is a risk that we will not be relevant tomorrow.

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• Learn from your piers, Be yourself, Be consistent, Think outside-in, Create

ambassadors, Plan long term and Be brave

• I know I am painting with very broad strokes. But I think it can be a good

think to take the helicopter view once in a while.

• And I know you will dive into much more details today and tomorrow on

some of the subjects I have mentioned here – from pricing strategies, over

digital storytelling to soft programming and revenue management.

• Thank you so much for your attention – and thank you so much for inviting

me.

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