Leisure Business Advisors (LBA) specializes in conducting the
feasibility study for a variety of leisure businesses, including
amusement parks. An independent industry expert usually prepares
this detailed study, which is required by potential lenders and
investors.
The feasibility study is the first step of the development process
and provides critical guidance for design, construction, and
operations. It evaluates potential market support and forecasts
usage. It determines potential financial performance and maximum
warranted development costs. It provides detailed physical
planning parameters. It recommends the attraction mix and includes
images for use in initial presentations.
The following paragraphs outline the major tasks typically
involved in conducting a feasibility study.
An initial meeting would be held to discuss the project in more detail and to see the prospective site if one has been chosen.
The site and local area would be evaluated to determine its effect on potential usage. Factors include:
The amusement park 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.
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:
The tourist market would be defined and analyzed. Based on available information, this analysis would likely examine:
Selected comparable amusement parks would be examined. Available reported information would be provided on individual characteristics, including:
Potential annual usage for the proposed amusement park would be estimated for the first five years of operation based on a number of factors, including:
LBA would make physical planning recommendations needed to service expected market demand. The specific parameters vary from one amusement park to another. Physical planning parameters may include:
Initial conceptual efforts may also be provided. These could include:
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 amusement park.
The financial analysis for the proposed amusement park would be based on the selected concept and potential usage. Financial estimates for the first five years of operations would include:
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 project 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 amusement park could be developed for its warranted investment. If it can be, the project is considered financially feasible.
Selected past theme park and amusement park projects are described below. These include past consulting efforts by John Gerner, LBA's managing director.
The Walt Disney Company is the leading theme park developer in the world. Its locations include Disneyland, Walt Disney World, Tokyo Disney Resort, Disneyland Park (Paris), Hong Kong Disneyland, and Shanghai Disneyland. As a senior consultant with Economics Research Associates in the 1980s, John Gerner (LBA's managing director) evaluated locations in Latin America for a proposed Disney theme park.
Universal Studios has theme parks in the USA, Japan, and Singapore. John Gerner, LBA's managing director, served as president of Berkshire Ridefilm during the early 1990s. During that time, the company produced the highly acclaimed simulation film for "Back to the Future - The Ride", which is currently at Universal Studios Japan.
Village Roadshow is Australia's largest amusement park operator and owns Warner Bros. Movie World, Sea World, Wet'n'Wild Water World, and other attractions. In 2011, LBA evaluated the market and financial potential of developing a major new attraction in China for Village Roadshow.
Hopi Hari is one of the largest theme parks in South America, and is located near Sao Paulo in Brazil. It is 76 hectares (188 acres) in size, and cost USD$220 million to develop. As a subcontractor to International Theme Park Services, John Gerner (LBA's managing director) evaluated the market and financial feasibility of Hopi Hari.
Pavilion Nostalgia Park is located within the Broadway at the Beach tourist complex in Myrtle Beach, and opened in 2007. During its planning stage, LBA evaluated Pavilion Nostalgia Park's potential financial performance for Burroughs & Chapin Co, Inc.
The Nanshan Culture Tourism Zone is approximately 27 hectares (67 acres) in size, and contains several tourist attractions. These include the Hainan Culture Park, Felicity and Longevity Park, and Buddhist Culture Park. Its centerpiece is the Guanyin Statue of Hainan, which is currently the fourth tallest statue in the world. As a subcontractor to Economics Research Associates, John Gerner (LBA's managing director) evaluated the feasibility of developing this major tourism project.
La Ronde is a theme park in Montreal that is approximately 59 hectares (146 acres) in size. It offers 40 rides, including ten roller coasters. As a subcontractor to Economics Research Associates, John Gerner (LBA's managing director) evaluated the potential of expanding this theme park and adding year-round uses on the site. These uses included a retail entertainment center, waterpark resort hotel, and expanded marina.
Formerly named "Riverside Park", Six Flags New England is located in Massachusetts. As a subcontractor to Economics Research Associates, John Gerner (LBA's managing director) evaluated the theme park's operating history, market potential, and likely annual attendance based on its planned capital improvements.
Cedar Point is a major theme park in Ohio. John Gerner (LBA's managing director) was a senior consultant with Economics Research Associates. He evaluated the impact of various factors on past operating performance. These factors included capital reinvestment, pricing, marketing efforts, economic conditions, and weather.
Busch Gardens Williamsburg is located in Virginia and has been repeatedly voted the world's most beautiful theme park by amusement park enthusiasts. John Gerner (LBA's managing director) was an internal productivity supervisor during the early 1980s, and evaluated the operating performance of individual rides and other components of the park. He also examined past financial performance based on various factors, and prepared the theme park's financial breakeven analysis.
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Richmond, VA 23223 USA
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