{"id":845,"date":"2020-05-14T16:27:13","date_gmt":"2020-05-14T16:27:13","guid":{"rendered":"http:\/\/www.theparkdb.com\/blog\/?p=845"},"modified":"2024-09-03T21:48:37","modified_gmt":"2024-09-03T21:48:37","slug":"case-study-panama-adventure-park","status":"publish","type":"post","link":"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/","title":{"rendered":"Panama Adventure Park"},"content":{"rendered":"<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\"><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_63 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/#Mandate\" title=\"Mandate:\">Mandate:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/#Market_Context\" title=\"Market Context\">Market Context<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/#Conceptualization\" title=\"Conceptualization\">Conceptualization<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/#Concept_1_Adventure_Park\" title=\"Concept 1: Adventure Park\">Concept 1: Adventure Park<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.theparkdb.com\/blog\/case-study-panama-adventure-park\/#Concept_2_Waterpark_Hotel\" title=\"Concept 2: Waterpark Hotel\">Concept 2: Waterpark Hotel<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<\/span><\/p>\n<h1><span class=\"ez-toc-section\" id=\"Mandate\"><\/span><span style=\"font-size: 56px; font-family: 'EB Garamond';\"><strong>Mandate:<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">Evaluate the high-level economics of an adventure park and waterpark in Panama for Isthmians Development Advisers\/NSB Caribe, a local promoter.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">What follows is an extended preview of a\u00a0<a href=\"https:\/\/store.theparkdb.com\/products\/case-study-panama-attraction-concepts\">full-length report<\/a>, available in <a href=\"http:\/\/store.theparkdb.com\">our store<\/a>.\u00a0\u00a0<\/span><\/p>\n<h1><span class=\"ez-toc-section\" id=\"Market_Context\"><\/span><span style=\"font-size: 56px; font-family: 'EB Garamond';\"><strong>Market Context<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">Panama is a small country in Central America, but the economy is dollarized, with the currency pegged effectively at a 1:1 rate with the USD.\u00a0 You might have heard of the Panama Canal, the waterway crucial to world trade.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">The canal drives GDP directly and also indirectly, facilitating the development of a regulatory environment, political &amp; monetary stability, and financial and other trade services that make Panama a favored location for investment in Latin America.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture9.png\"><img fetchpriority=\"high\" decoding=\"async\" class=\"aligncenter wp-image-864 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture9.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">1.\u00a0 The result of these conditions is an economy with relatively high per capita expenditures, with over 80% of the population earning more than $20,000 USD.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">2.\u00a0 Despite their number, however, the resident population is <span style=\"text-decoration: underline;\">not<\/span> the target market.\u00a0 Tourists are, which have increased in\u00a0number at a low (&lt;=2%) but stable rate during the past decade and now\u00a0total over 2 million annually.\u00a0 In total, the qualified market size is approximately 3-4 million.\u00a0 This places an upper bound on achievable attendance.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture8.png\"><img decoding=\"async\" class=\"aligncenter wp-image-865 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture8.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">3.\u00a0 The\u00a0main attractions in Panama are indoor attractions (FECs)\u00a0and\u00a0waterpark-based ones, whether in a standalone format or\u00a0resort-adjacent. \u00a0The Panama Canal, the primary attraction in the country, receives just under a million visitors a year.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture5.png\"><img decoding=\"async\" class=\"aligncenter wp-image-866 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture5.png\" width=\"974\" height=\"729\" \/><\/a> <a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture6.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-867 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture6.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">4.\u00a0 The last major factor that cannot be ignored is Panama&#8217;s climate.\u00a0 Precipitation is high, with probabilities of rain of between 45-50% for the majority of the year.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture7.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-870 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture7.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<h1><span class=\"ez-toc-section\" id=\"Conceptualization\"><\/span><strong>Conceptualization<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">Given the market size, competitive context, and climate, we determined two potential land uses that would represent the highest probability of success for the project.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">1.\u00a0 An adventure park drawing on the climate, topography, and history of Panama.\u00a0 Such attractions are light on the hardware, minimizing\u00a0the huge investment costs of typical theme parks.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">2. An attraction-driven resort targeting tourists.\u00a0 Such attractions derive their revenues from higher-than-average occupancies and average room rates, which justify the investment in a larger than normal amenity, most typically in the form of a waterpark.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture4.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-868 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture4.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Concept_1_Adventure_Park\"><\/span><strong>Concept 1: Adventure Park<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">1.\u00a0 To reiterate, the market is quite limited in Panama.\u00a0 The overnight tourist population outnumbers qualified residents.\u00a0 At moderate penetration rates, the market likely would not support a theme park of over 1.5 million in annual visitation.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture2-9.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-851 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture2-9.png\" width=\"974\" height=\"679\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">2.\u00a0 We use weighted average penetration rates to derive this figure.\u00a0 Xcaret (due to concept similarity) and Parque Nacional del Cafe (due to market size similarity) are\u00a0the concepts with the highest degree of comparability.\u00a0 For more details on the analysis, please refer to the\u00a0<a href=\"https:\/\/store.theparkdb.com\/products\/case-study-panama-attraction-concepts\">in-depth report<\/a>.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture34.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-887 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture34.png\" width=\"974\" height=\"741\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">3.\u00a0\u00a0The key comparable for an adventure park in Latin America\u00a0is Xcaret.\u00a0 Developed by the Grupo Xcaret over a period of 30 years, the master plan includes several attractions and resort accommodations, and\u00a0 clearly demonstrates how a phased, sustained vision can play out over time, both complementing and benefitting from the development of Cancun in general.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">Panama&#8217;s current market situation\u00a0is analogous to Cancun&#8217;s when Xcaret was developed; such long-term thinking and the execution of a vision over time\u00a0would be required in Panama&#8217;s case.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture1-13.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-853 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture1-13.png\" width=\"974\" height=\"735\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">4.\u00a0 To conclude, the key question\u00a0is whether an attraction of some scale could be constructed for $200 million or less, which represented the maximum investment to achieve the targeted return figure of 10%.\u00a0 As the financing required rates of return, and status of potential government funding was uncertain, we advised Isthmian Development Advisers\/NSB Caribe to use this figure as a planning number.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">A scenario analysis is available in <a href=\"https:\/\/store.theparkdb.com\/products\/case-study-panama-attraction-concepts\">the full report<\/a>.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Concept_2_Waterpark_Hotel\"><\/span><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture3.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-874 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture3.png\" width=\"974\" height=\"729\" \/><\/a><strong>Concept 2: Waterpark Hotel<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">1.\u00a0 First, for some context.\u00a0 The hotel market is Panama is defined by the huge boom that took place in the 2011 period, and which to a certain extent is still playing out.\u00a0 This has depressed occupancies, although room rates have crept up over time.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/hotelmkt.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-872 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/hotelmkt.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">2.\u00a0\u00a0While there are 10,000 hotel rooms in Panama, very few were present in and around the site.\u00a0 Moreover, listed room rates averaged $70.\u00a0 For the hotels that we believed to be the closest in comparability to the project, occupancies averaged a barely break-even 50%,\u00a0 with\u00a0room rates in the $80 range.<strong>\u00a0<\/strong><\/span><\/p>\n<p><strong><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture10.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-869 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture10.png\" width=\"974\" height=\"729\" \/><\/a><\/strong><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture23.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-878 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture23.png\" width=\"974\" height=\"729\" \/><\/a><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">3.\u00a0 The best comps for waterpark &amp; themed hotels are the Great Wolf Lodge, Centerparcs, and Legoland operations.\u00a0 These imply that <strong>occupancies need to be much higher than the local average, as do ADRs<\/strong>.<\/span><\/p>\n<p><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture2-10.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-854 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/Picture2-10.png\" width=\"974\" height=\"752\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">4.\u00a0\u00a0Given the state of the market, the investment cost of the resort hotel would need to be less than $100 million to make economic sense.\u00a0 Financing options, including those from the government, were also discussed with NSB Caribe.<\/span><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">A base case scenario as seen below, which is a 250 room operation at an 80% occupancy rate, and $200 ADR is in line with international comparables, but far exceeds the average performance of local ones.\u00a0 Sizing and pricing the project this large\/high would represent a risk, and this was further detailed in the scenario analysis (available in <a href=\"https:\/\/store.theparkdb.com\/products\/case-study-panama-attraction-concepts\">the full report<\/a>).<\/span><\/p>\n<p><strong><a href=\"http:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/model1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-876 size-full\" src=\"https:\/\/www.theparkdb.com\/blog\/wp-content\/uploads\/2020\/05\/model1.png\" width=\"974\" height=\"729\" \/><\/a><\/strong><\/p>\n<p><span style=\"font-size: 20px; font-family: 'EB Garamond';\">The full report is available for download <a href=\"https:\/\/store.theparkdb.com\/products\/case-study-panama-attraction-concepts\">here<\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Mandate: Evaluate the high-level economics of an adventure park and waterpark in Panama for Isthmians Development Advisers\/NSB Caribe, a local promoter. What follows is an extended preview of a\u00a0full-length report, available in our store.\u00a0\u00a0 Market Context Panama is a small country in Central America, but the economy is dollarized, with the currency pegged effectively at [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2004,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[55],"tags":[94,97,98,146],"class_list":["post-845","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-case-studies","tag-adventure-park","tag-panama","tag-resort","tag-waterpark"],"acf":{"":"","bfi_title":"","bfi_title_2":"","bfi_description":"","chart_image":"","chart_title":"","chart_description":"","bc_title":"","bc_sub_title":"","bc_content":"","bc_right_side_content":"","highlighted_image":"","highlighted_sub_title":"","highlighted_title":"","highlighted_bottom_text":"","highlighted_button_text":"","highlighted_button_link":"","below_highlighted_title":"","below_highlighted_sub_title":"","below_highlighted_content":"","below_highlighted_right_side_title":"","below_highlighted_list":""},"_links":{"self":[{"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/posts\/845","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/comments?post=845"}],"version-history":[{"count":0,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/posts\/845\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/media\/2004"}],"wp:attachment":[{"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/media?parent=845"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/categories?post=845"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theparkdb.com\/blog\/wp-json\/wp\/v2\/tags?post=845"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}