Before we can conduct a Feasibility Study, we need to develop a concept. The questions to ask at this stage are:

1. What kind of attraction is to be built? Amusement park, theme park, water park, family entertainment center? Indoor or outdoor?
2. What is the philosophy or corporate mission statement? It must be created at this point not after the park is built. This is not simply a plaque that sits on the wall. It is important that each and every employee understand and LIVE it. Usually the mission of the park is the set of goals that every employee should strive for in the operation of the park.
3. How do you determine what's fun? How do you determine what excitement is? It depends on where you are in the world. Every market defines fun and excitement differently, BUT everyone wants to experience these feelings, whatever they may be.

Three things can help determine what "fun" is defined as: Feasibility Study input, Cultural understanding of the market's likes and dislikes, and Qualitative Research. What are the latest industry trends? How much should they be incorporated into the concept development?

How essential is qualitative and quantitative Market Research to the success of the plan? Do we gather informal or formal market research? Is the gut feeling enough to go on to attract the investment capital needed to develop the park? Quantitative research occurs in the Feasibility Study and requires focus groups and concept testing.

Now, with the concept defined, a Feasibility Study is conducted. In a Feasibility Study, we take the general park concept and make projections on how the park will be developed, designed, built, operated, marketed, and expanded. We begin to ask the crucial questions that will determine the design parameters of the park. The Feasibility Study is your roadmap. And it is the best money spent up front. Without this roadmap, you run a GREAT risk of needlessly spending vast amounts of time and money.

Site Identification

The first element, Site Identification, is based on client input and requires several items.

• Proximity to resident and tourist markets.
• What is the compatibility of adjacent land uses?
• Accessibility - both existing and potential?
• What is the area's climate?
• What will be the impact of the local population, climate (considering both seasonal changes and possibility of natural disasters), economic shocks, location, transportation, adjunct businesses and environment on the proposed park's design and operation?
• Is this the optimum site or location for this park?

Concept Evaluation

When evaluating the chosen concept, additional items must also be considered.

• Evaluated relative to potential elements
• Sizing
• Basic configuration applicability of the concept in the local market
• Operational characteristics and considerations

Local Market

The Local Market must be completely defined and analyzed:

• Proximity and commuting time to major population centers
• Current and projected population of this market area: size, income, age composition
• Leisure spending patterns

Tourist Market

Estimation of Potential Tourist Support including:

• Historical patterns; and
• Tourist data: total number of non-resident visitors, seasonality, purpose of visit, expected length of stay, and visitor expenditure patterns.

Generally, major theme parks attract 65% or more of total attendance from the resident market, or those living within a 150 mile radius.

Characteristics of Comparable Industry

The complementary nature, attendance characteristics and trends of public and private cultural, historical and entertainment facilities. Although any existing or proposed attraction is a competitor, they may also serve to compliment the planned attraction.

Entertainment scope and market drawing power of existing and proposed competitive attractions in the region

Expenditure patterns and operating characteristics for area recreational and cultural activities

Industry Trends

There are a few trends which have been identified for our industry. The first trend is Diversification. More diverse mix of elements within the parks - animals, culture, child-specific, water park, shopping, and resorts being placed within the same entertainment complex.

The next trend is Consolidation. There are fewer smaller, unpopular amusement parks and stronger, larger parks in existence today than at any other point during the industry's history.

The final trend is the increasing role of Commercialization. There is greater interest in building to the market, and a greater understanding of market needs and aspirations.

As the population becomes more globally aware and world-wide travel increases, the level of guest sophistication and expectation rises. Disney and EPCOT are the world standard for quality and entertainment value. Consumers will be interested in higher quality and a safe, clean and attractive environment.

Determination of Potential Market Penetration

• Penetration of the available markets will be projected
• Regional competitive and complementary facilities
• Scope and nature of the proposed attraction
• Size and characteristics of the available markets
• Proposed pricing policies

Next, we want to get an accurate Estimation of Attendance for our project. This is always based on the foregoing research and analysis. Attendance will be projected for five year period.

Preliminary Physical Planning Parameters

• Expected distribution of attendance by month, week, day, and hour
• Determine required crowd handling capabilities and peaking characteristics
• Design day attendance
• What is the projected attendance for the park? How does that break down monthly, weekly and daily?
• What is the financial impact to the park?

Design Day

How do we define the Design Day? Here’s the answer.

Annual attendance: The number of persons visiting the project during a specified one-year period (calendar or fiscal).

Seasonal attendance: The total number of persons visiting during a specific segment of the project's calendar or operating year. This may be divided by seasons, months, or any other factor which can be applied to the specific project.

Peak daily attendance: The maximum number of persons visiting during a single operating day, or average of several such days. This is also called the Design Day.

Thus we find that “Design Day” is: The day, or days, for which the project support facilities are planned. Normally based on an average peak day, which generally occurs 10 -15 times a year. Facilities planned for this level of activity will provide adequate services and conveniences for visitors without undue personal inconvenience.

An "absolute" peak day's volume, which might occur 3-4 times per year, may exceed the established design day parameters. However, the design day facilities would be adequate to accommodate this increased demand, but waiting times may increase, visitor satisfaction decline and per capita revenues decrease on those "absolute" peak days.

Financial Analysis

Next we want to perform a revenue analysis. This can include:

• Preliminary per capita expenditures
• Expenditures will then be applied to previously determined attendance potential to derive total operating revenues expected for the project.

Pro Forma Cash Flow Financial Analysis. Employing the above operating revenues, costs and income, as well as the estimated warranted investment, cash flow and return on investment calculations will be performed. Basically, we need to reach a bottom line number to base our project in reality.

Here are some other things to consider that can be answered with a Feasibility Study: Should you actually purchase the land? Pros and cons of long term leases and purchases.

What will be the economic and community impacts of your development, such as:

• What will the sales and employment taxes be?
• How can the multiplier effect be calculated?
• What kind of a demand will your facility place on the local fire and police departments?

Now that we have a rough concept and finalized the Feasibility Study, we need to revisit the original concept and determine its viability. At this stage, we begin asking more detailed market research questions and revising the concept.

How is a Master Plan developed for the project? What is the difference between a Master Plan and a Feasibility Study? How do we use the road map and master plan?

Based on the Feasibility Study, what kind of changes need to be made to the concept? What has been learned from the Market Research? What kind of local market preferences will impact the concept and design? Will the market support the proposed expenditures? What are the benefits of creating synergistic designs which incorporate traditional parks with hotels, retail facilities and educational attractions? What kinds of food, retailing, merchandising and other services should be included in the design?

The Feasibility Study is essential to securing financing. And proper financing is essential to the creation of a successful park. A developer doesn’t want to be three-fourths of the way through construction and realize a shortfall. On the other hand, the developer should not be so over-leveraged that operating income cannot service the debt.

From the information gathered in the Feasibility Study, we are able to determine the target market's acceptable admission price and projected attendance levels. Now we can compare the purchase and maintenance costs of the facility's rides and attractions with admissions price and design attendance to calculate ride / attraction profitability.

The next step is the actual Design phase. During this time, assistance of architects, engineers, operational planners and many other consultants in the creation of the park will be engaged. Remember, information gathered in the Feasibility Study will impact the park's design in terms of entertainment, attendance and cultural influences.

Information gathered in the Feasibility Study regarding attendance levels and cultural influences will help design the facility to accommodate the specific market. 

Operations Planners will also confirm the admission pricing structure. Research will tell what the primary market will support and whether Pay-one-Price admission or individual ticketing is preferred. 

Now construction can begin. The person in control of construction must be qualified to oversee a project of this magnitude. This person will be responsible for overseeing that the construction fits the design. By hiring an individual who has this exact experience and knows the right steps to take, may seem expensive, but money will be saved in the long run.

Finally, any profitable park must stay informed about the industry, consumer and market trends that will affect the park and provide insight as expansion planning is required.

By thinking of the above elements and asking all of these questions, the potential developers of leisure attractions are on their way to creating a successful theme park, water park or family entertainment center!

Feasibility Analysis

When you decide to go to college, you formulate a PLAN.

When you want to buy a home, you develop a PLAN.

When you decide to start a family, you establish a PLAN.

Why then, would you invest millions of dollars in a project without a PLAN?

A Feasibility Analysis is just that...a PLAN used by:

• Potential investors

• Planners

• Designers

• Marketing

• Financial

• Government relations

It becomes the road map for your project.  An effective feasibility analysis will provide the client with a solid foundation upon which a project is built.  A feasibility study provides concept identification, estimates of supportable market, design parameters, attendance estimates, revenue projections, and net warranted investment.

The first step in any project should be determining the viability of the idea.

ITPS has provided feasibility studies for numerous projects throughout the world.   Projects of all types, sizes and investment levels. Included are: aquariums, theme parks, waterparks, family entertainment centers (FEC's), location based entertainment centers (LBE'S), and mixed use attractions.

ITPS KNOWS from our experience in the industry that the feasibility study is critical to the success of any project. 

ITPS PROVIDES you with a detailed analysis of the market, concept and financial projections.

OUR EXPERT ANALYSIS can save you time and money in the long run and assist in getting bureaucratic as well as financial support for the project. 

ITPS PROVIDES PRATICAL EXPERIENCE in all of our services.  We are not theorists.  We know what works within a project based on our experience in the industry.  Our staff has over 350 years of experience in all areas of the industry ranging from attractions, maintenance, safety, marketing, retail, and finance.

ITPS WANTS TO ENSURE the validity of each project and a feasibility analysis provides that path to project verification.

Start and finish your project with the most important step you will take...a feasibility analysis.

For more information on how ITPS can assist you with your project or further information, please contact ITPS.