Theme Park Feasibility Studies

Leisure Business Advisors LLC (LBA) specializes in conducting feasibility studies for a variety of leisure businesses, including theme parks. An independent industry expert usually prepares this detailed study, which is required by potential lenders and investors.

Feasibility studies begin the development process and provide critical guidance for design, construction, and operations. The study evaluates potential market support and forecasts usage. It 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 recommends the attraction mix and can include a walk-through description and artist conception images for use in initial presentations.

The following paragraphs outline the major tasks typically involved in conducting a feasibility study.

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 theme 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.

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 theme parks 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 facility 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 theme parks
  • 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 theme park 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 theme park
  • 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 theme park.

Task 8: Financial Analysis

The financial analysis for the proposed theme park 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 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 theme park could be developed for its warranted investment. If it can be, the project is considered financially feasible.

Types of Attractions

The types of leisure attractions that LBA serves include the following. Click on one of these types for selected past projects:

More Information

Click on one of these links for additional information.

Contact Information

Email Address for Initial Inquiries:
info@leisure-business.com
 
Office Address:
Leisure Business Advisors LLC
2010 Princess Anne Avenue
Richmond, VA  23223  USA

Download our managing director's vCard for use in your e-mail program.