Financing: Where to Start
feasibility study is the first step in financing a new aquarium.
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 business plan. It is critical that design plans are in
line with market needs and expected cash flow. These planning
guidelines need to be established before financing is in place.
Designers and managers can also benefit from the guidance provided
in the study, in addition to the project's investors.
The following paragraphs outline the major tasks typically
involved in conducting feasibility studies.
1: Orientation Meeting
initial meeting would be held to discuss the project in more
detail and to see the prospective site if one has been chosen.
2: Site and Area Evaluation
site and local area would be evaluated to determine its effect on
potential usage. Factors include:
limitations or constraints
complementary and competitive facilities
3: Concept Description and Industry Trends
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.
4: Market Analysis
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
tourist market would be defined and analyzed. Based on available
information, this analysis would likely examine:
5: Evaluation of Comparable Facilities
comparable aquariums would be examined. Available reported
information would be provided on individual characteristics,
6: Annual Usage
annual usage for the proposed aquarium would be estimated for the
first five years of operation based on a number of factors,
of the available markets
performance achieved by comparable facilities
and potential competition
7: Physical Planning and Concept Development
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
types of activities
mix and sizing
visitor service space
land area or building space needed
conceptual efforts may also be provided. These could include:
layout diagram for the new aquarium
description of a typical visit from the perspective of a typical
computer graphics visualizations of selected activities
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.
8: Financial Analysis
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:
profit or surplus
for equity investors, if applicable
9: Warranted and Typical Development Cost
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
past consulting projects are described below. All involved John
Gerner, LBA's managing director.
Ripley's Aquarium (Myrtle Beach and
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,
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
Adventure Aquarium (Camden, New
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
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