Are you an entrepreneur with a wanderlust for fun, but aren’t sure how to turn your love of amusement parks into a reality?
Do you work for a real estate firm that is dipping its toes into the tourist and themed entertainment business?
Or, do you represent a government that is longing to increase tourist demand in your region through development of new and exciting attractions?
No matter the reason you may be considering venturing into the theme park and amusement industry, it is important for you to understand one single and vitally important necessity. And that necessity is a solid and detailed feasibility analysis.
Quite honestly, I don’t say this because our company, International Theme Park Services, Inc. (ITPS) has performed hundreds of such studies around the world and has produced high-quality analyses with strong supporting background (though it is true!). I say it because, too many times, we have been involved with companies, individuals, or agencies that skip this all-important first step. They believe their market surely will support a new theme park. They believe their site will absolutely be the best for a water park. How could it not work, after all?
Maybe your market has strong resident numbers, but those residents don’t have enough disposable income to spend money at your shiny new amusement park.
Maybe your market has strong tourist numbers, but those tourists don’t stay in your market area long enough for you to capture their attention.
Maybe your site is located in the center of town, but suddenly you learn (too late) that the trend shows residents moving more into the suburbs and away from downtown.
Maybe you want to build a mega-theme park, only to discover that your market would only support a medium-sized family entertainment center (but could have strongly supported that
Maybe you did your demographic research quite well, but failed to consider other competitive leisure options or other fun things to do in the market that people would prefer to spend their hard-owned money on.
These are just a few reasons that forging ahead with an amusement endeavor without a feasibility study is much too risky.
Think about it. Why would you start any type of journey without a proper roadmap? You have to know not only where you are heading, but as important, how to get there. Why start on your journey without a proven method to reach your destination and, once you’re there, to have properly planned so that you can have the time of your life?
Our company has been involved in many projects globally where the developer failed to see the need for a feasibility study. Once the project gets underway and into design, there are simply too many unknowns – no certainty over the project size, no clarification on the project budget, and no solid idea about how many people will come or, as important, when they will come. Projects without this proper foundation sadly face a much higher possibility of failure.
Here are my top 10 reasons:
1. It will identify your project’s supportable market and will qualify it based on income, age, and other important demographics.
2. It will make sure your project is the right concept to fit the market and the target audience. It will also provide information on types of concepts, attractions, and components you will need to include.
3. It will make sure your site is right for the concept and for developing your attraction. If you aren’t sure which site to choose, a study will help you determine which would work best.
4. It will take a hard look at the amusement industry, including historical and current trends and forecasts, to see how this impacts your project’s potential.
5. It will provide reasonable attendance projections based on industry standards and adjustments to your market.
6. It will let you know not only how many people might come, but when they will likely come so you can properly plan on accommodating them.
7. It will give you all financial projections you might expect for the first few operating years, to include pricing, revenues, expenses, and overall cash flow.
8. It will set forth the physical planning parameters based on attendance demand so your project will be properly sized to fit the market.
9. In the end, a feasibility study will let you know how much to spend on your project so that you can receive a proper rate of return on your investment.
10. Many developers also use a reputable feasibility study from an outside and experienced company as a marketing tool to help generate funding and to draw potential investors.
So, if a study will provide all of the above wonderful assets to a developer, why ever consider skipping it? There simply is no valid reason. True, it is upfront seed money that may not be recouped if your project turns out not to be feasible or you never receive funding to move forward. But, honestly, if you are serious about your dream, having a feasibility study done is the best use of your upfront seed money.
After all, wouldn’t you want to risk $100,000 or even less, rather than millions of dollars only to realize you built the wrong type of facility for your market or that you over or under capitalized your attraction?
A feasibility study, done right by an experienced firm, makes all the difference in your project’s potential.
International Theme Park Services, Inc.
2195 Victory Parkway
Cincinnati, Ohio 45206
United States of America