Common Mistakes in Opening a Theme Park

Courtesy of Parques Reunidos and IQPC Middle East, the content below is a summarized version of a talk that Jose Maria Letamendia delivered at an IQPC Theme Parks conference.

Mr. Letamendia is VP of Business Development at Parques Reunidos.  Be sure to download the entire presentation here.

 

Common Mistakes in Opening a Theme Park

 

Development Phase

  • Unrealistic Opening Dates – targeting an unrealistic opening because of pressure from politicians, investors, or other stakeholders can potentially set off a vicious cycle of mismanagement.  More on this below, but often these opening dates are unrealistic because developers underestimate the lead times necessary to procure rides from vendors and negotiate terms with IP’s.
  • Construction Problems – 99% of projects are over budget, often in large amounts.  Lack of careful planning and overoptimistic projects can lead to big problems, especially because construction companies are often local enterprises with no previous experience in building theme parks.  Whereas the theming process requires a high level of skill, especially if the terms of IP agreements demand it, and sets up a disconnect between the skill required and skills available in the market.

 

Operational Phase

The list of potential operational issues is lengthy, but a quick summary of some salient points is as follows.

  • Budgets for the opening year are often wildly unrealistic and unachievable, because feasibility and market research reports tend to be overoptimistic about opening year numbers.
  • F&B sizing is often miscalculated, leading to design problems in the kitchen, back of house areas, etc.
  • Ride capacity is similarly often miscalculated.
  • The complexity and duration of staff hiring and training is often underestimated, especially in countries with a limited previous offering in amusement and theme parks.  This leads to developers and owners often overhiring in staff and managers to compensate.

 

Vicious Circle

At all costs, the vicious circle must be avoided.  This is a cascading set of problems that results from the development and operational issues above.

Premature opening dates and operational issues result in poor performance, and can cause the park to come under criticism on social media and elsewhere.

In response to this, owners often undertake drastic decisions such as aggressive discounting.

This further exacerbates underperformance, which may lead to staff reductions and an inability to provide the level of service demanded by guests.  In some cases, a reduction in staff, staff training, and services can lead to accidents and security incidents.

In extreme cases, this cycle can lead to the collapse of a park.


About Parques Reunidos:

One of the leading global operators of regional leisure parks and one of the three truly global leisure park operators.

After 50 years in the sector, we now operate a well-diversified portfolio of more than 60 different assets (theme parks, zoos and marine parks, water parks, indoor entertainment centers and other attractions), spread out over various countries across Europe, North America, the Middle East, and Australia. Our asset diversity has placed us as the second-largest leisure park operator in Europe and the eighth-largest leisure park operator worldwide.

Overall, our parks received a total of approximately 20 million visitors every year, a number that materializes the success of our three-format business model:  operation of fully-owned parks, operation of third-party parks, and consultancy for park developers.

We have a highly experienced and committed management team with a proven track record across different geographical areas and economic cycles.

About IQPC: 

We invite leading executives and academics to share insights, expertise and solutions to today’s escalating challenges. Simply put: Our conferences and communities provide the fundamental and cutting-edge information you can use immediately.

IQPC also ensures our delegates are introduced to inspiring thought leaders and stellar speakers; Raymond “Ray” Kurzweil, American author, computer scientist, inventor and futurist, General Colin Powell, Retired US Secretary od State, Jack Welch, former Mayor of New York, Tony Hsieh, CEO of Zappos, And from ‘Shark Tank fame, both Robert Herjavec, CEO & Founder of Herjavec Group and Barbara Corcoran, Chairman & CEO of Barbara Corcoran Inc are just a few of IQPC’s most recent keynotes.

We conduct exhaustive research into our speaking panels, only inviting domain experts with practical knowledge or peer reviewed research that can solve your current challenges. From Digital Disruption events in Sydney, Oil and Gas events in Dubai, Call Center events in Las Vegas, Autonomous Vehicle events in Germany, Corporate Learning Exchanges in Tampa, Process Excellence conferences in London and CX Summits in Singapore, IQPC transfers expertise around the world, keeping its delegates competitive, profitable and delivering maximum ROI.

View a full list of our upcoming events here.



RELATED BLOG POSTS

In the first part of this series, we evaluated the revenue side of theme park business models.  In this series,

Posted on 27.12.2017