By: Dennis Speigel, President / Founder
As the theme park and leisure industry continues to flourish internationally, most specifically, I think it is really interesting to see so many new companies entering the “theme park arena” with little or no indication of what the proper steps and procedures are to adequately pursue the development of a several-hundred-million-dollar theme park project or even a small million--dollar FEC.
History repeats itself time and time again as it relates to new companies starting the process. No matter what it seems, the new entry clients have to go through their own procedures of crawling, walking, falling down, and walking again. It seems no matter how hard we try, this is just the process the “newbies” go through. This is particularly relevant in the Middle East, Mainland China, Russia, and other emerging markets – where the greatest number of new parks is underway with newcomers to the park industry.
The first undertaking a newcomer to the industry should adopt is to hire a consultant who has been through the process – at a minimum – several times. This should be a group who has practical management experience, who can guide the client through the 12 steps of developing a theme park project. These important 12 steps are:
Master Plan Programming
Preliminary Concept Design
Final Concept Design
Production & Construction
Installation & Testing
Following the consultant’s lead and recommendations through these 12 steps will save the client both time and money.
There are many things to consider under each of the 12 steps. The first and most important is the FEASIBILITY STUDY. We find so many companies who do not want to undertake a feasibility study. At ITPS, we tell new clients and explain to them that the Feasibility Study is the most important step in developing the project. It provides the designers with their planning criteria. It provides the management team important financial information, including 5-year attendance forecasts. It also provides critical financial information, such as per capita spend, total revenues, EBITDA, and most importantly, the net warranted investment level (the NWI). This warranted investment level will tell the developer what the project cost is that can be supported by the market in which the project will be located. This study will be used by investors, financial institutions, local governments, and with potential sponsors – just to name a few uses.
Next is the all-important aspect of PRE-OPENING OPERATIONS PLANNING, which normally begins at the outset of the project and continues with and through the project’s opening. This important planning process helps assure that all programs, procedures, and systems are properly in place for the project to operate successfully. Included in the Pre- Opening Operations Planning phase of development are:
• Human Resource Requirements
• Establishment of Product Plans
• Ride & Attractions Procurement
• Design Input
• Operating Budgets
• Development of Finance Programs
• Development of Maintenance Programs
• Development of Rides & Attractions Programs
• Development of Admissions & Ticketing Programs
• Development of Games & Arcades Programs
• Development of Food & Beverage Programs
• Development of Merchandise Programs
• Development of Safety Programs
• Development of Marketing Programs
• Development of Entertainment Programs
• Development of Training Programs
• Development of Standard Operating Procedures and Training Manuals
• Implementation of Training Programs On Site
Through the years of having worked on over 500 projects, some of the largest in the world, we have noted that Pre- Opening Operations consists of approximately 18 to 24 months of time in order to conduct and properly complete. The proper completion of the Pre-Opening Operations Planning program will be one of the key determinants in the success or failure of the project. Not too mention, when followed and properly executed, it will save the project huge sums of money, time – and headaches.
As stated above, many clients – due to their lack of familiarity with the industry - believe that their own business understanding is enough to carry them properly through the feasibility, design, and pre-opening operations planning process. So, the crawl, walk, fall down, crawl, walk process continues. It seems like it has always been this way and on a lot of projects, unfortunately, the cycle never ends. The smart client follows the lead of their paid consultant and avoids a lot of the pitfalls and displeasures that are needlessly encountered.
Our industry is a great industry. We do not want failures – we want successes. So, following the proven practices and procedures successfully pioneered by professionals is the correct path to follow.