Aquarium Feasibility Study

Leisure Business Advisors (LBA) specializes in conducting the feasibility study for a variety of leisure businesses, including aquariums. 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. The feasibility study determines potential financial performance and maximum warranted development costs. It provides physical planning parameters, such as total land size needed and building space required. It also recommends the attraction mix.

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.

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