Aquarium
Business Plan: Begin with the Feasibility Study
The
feasibility study is the first step in starting a new aquarium,
and should be prepared before the business plan. Leisure Business
Advisors LLC (LBA) specializes in conducting this study, which is
generally required by financing institutions. The study
provides market and financial analysis and projections
that will be used in the developer's business plan.
The study also provides critical physical planning recommendations
for the aquarium business plan. It is critical that design plans
are in line with market needs and expected cash flow. These
planning guidelines need to be in place before the construction
and building can start. Designers, planners, and managers can all
benefit from the guidance provided in the study.
The following paragraphs outline the major tasks typically
involved in conducting feasibility studies.
Task
1: Orientation Meeting
An
initial meeting would be held to discuss the project in more
detail and to see the prospective site if one has been chosen.
Task
2: Site and Area Evaluation
The
site and local area would be evaluated to determine its effect on
potential usage. Factors include:
- Market
proximity
- Physical
limitations or constraints
- Access
routes
- Traffic
patterns
- Surrounding
development
- Potential
complementary and competitive facilities
Task
3: Concept Description and Industry Trends
The
aquarium concept would be described and industry trends discussed.
Readers of the feasibility study may be unfamiliar with the
concept and this section of the report provides an introduction
before specific project-related issues are examined.
Task
4: Market Analysis
The
market areas would be defined based on distance from the site.
Demographic characteristics for the resident market would be
analyzed to provide an indication of support. This would typically
include:
- Population
growth
- Age
distribution
- Income
distribution
The
tourist market would be defined and analyzed. Based on available
information, this analysis would likely examine:
- Current
size
- Historic
growth
- Other
characteristics
Task
5: Evaluation of Comparable Facilities
Selected
comparable aquariums would be examined. Available reported
information would be provided on individual characteristics,
including:
- Name
and location
- Physical
description
- Financial
performance
- Development
costs
Task
6: Annual Usage
Potential
annual usage for the proposed aquarium would be estimated for the
first five years of operation based on a number of factors,
including:
- Planned
components
- Size
of the available markets
- Qualitative
market characteristics
- Market
performance achieved by comparable facilities
- Location
and potential competition
Task
7: Physical Planning and Concept Development
LBA
would make physical planning recommendations needed to service
expected market demand. The specific parameters vary from one
leisure attraction to another. Physical planning parameters may
include:
- Recommended
types of activities
- Recommended
mix and sizing
- Recommended
visitor service space
- Minimum
land area or building space needed
Initial
conceptual efforts may also be provided. These could include:
- Functional
layout diagram for the new aquarium
- Narrative
description of a typical visit from the perspective of a typical
family
- 3D
computer graphics visualizations of selected activities
The
final report could also include a video presenting the results of
the feasibility study with a "fly-through" or "walk through"
computer animation of part of the new aquarium.
Task
8: Financial Analysis
The
financial analysis for the proposed aquarium would be based on the
selected concept and potential usage. Financial estimates for the
first five years of operations would include:
- Revenues
by category
- Operating
expenses
- Operating
profit or surplus
- Return-on-investment
for equity investors, if applicable
Task
9: Warranted and Typical Development Cost
LBA
would determine the warranted development cost or investment based
on potential profitability. This is the recommended maximum amount
that should be spent to effectively develop the aquarium and
return a reasonable return-on-investment to equity investors. This
warranted amount would be compared to the actual development costs
for other comparable facilities. Relative size would be taken into
consideration. This comparison would provide guidance as to
whether the proposed aquarium could be developed for its warranted
investment. If it can be, the project is considered financially
feasible.
Past
Aquarium Projects
Selected
past consulting projects are described below. All involved John
Gerner, LBA's managing director.
Ripley's Aquarium (Myrtle Beach and
Gatlinburg USA)
As a subcontractor to International Theme Park Services
(ITPS), LBA prepared valuations of the Ripley's Aquarium in
both Myrtle Beach and Gatlinburg in 2003, 2006, and 2009.
This effort involved an on-site review of each aquarium and
its operation. Past annual attendance and financial
performance were also analyzed.
Downtown Aquarium (Denver,
Colorado USA)
In 2002, Gerner Consulting (LBA's previous name) conducted
a valuation of Colorado's Ocean Journey as a subcontractor
to ITPS. This aquarium was later renamed the "Downtown
Aquarium - Denver" by Landry's Restaurants, Inc. The
analysis included an evaluation of past market and financial
performance.
Adventure Aquarium (Camden, New
Jersey USA)
As a subcontractor to ITPS in 2000, Gerner Consulting
(LBA's previous name) evaluated the future potential
performance of expanding the Adventure Aquarium. The
consulting effort analyzed past annual attendance and
provided projections based on three scenarios.
Virginia Aquarium Expansion (Virginia
Beach, Virginia USA)
As a subcontractor to Economics Research Associates (ERA)
in 1991, Gerner Consulting (LBA's previous name) prepared
market and financial projections for this $35 million
expansion of the Virginia Aquarium that tripled the
aquarium's size in 1996. It has been named the Travel
Attraction of the Year by the Southeast Tourism Association.
New York Aquarium (Brooklyn, New
York USA)
ERA was retained by the New York Zoological Society in 1985
to evaluate the potential performance from significantly
expanding the New York Aquarium. John Gerner (LBA's managing
director) was a consultant with ERA. He provided the market
and financial analysis for this consulting effort.
National Aquarium in Baltimore
(Baltimore, Marylandnbsp; USA)
The National Aquarium in Baltimore is a
nationally-recognized tourist attraction and an anchor of
Baltimore's successful Inner Harbor urban revitalization
project. ERA was retained by the aquarium in 1984 to conduct
an evaluation of expansion alternatives. John Gerner (LBA's
managing director) was a consultant with ERA. He provided
market and financial analysis for the consulting effort.
Proposed Indoor Zoo (New York City,
New York USA)
The Wildlife Conservation Society operates the the Bronx
Zoo, Central Park Zoo, Queens Zoo, Prospect Park Zoo, and
the New York Aquarium. During the mid 1980s, it explored the
possibility of developing an indoor zoo in Manhattan and
retained Economics Research Associates to conduct the
analysis. John Gerner (LBA's managing director) was a
consultant with ERA and evaluated market demand and
financial performance.