INDIA
India’s existing amusement industry offer is limited, which could prove to be a staffi ng issue for operators considering entering the market and wanting to recruit experienced people
STEVE PEET, MANAGING DIRECTOR, STEVE PEET CONSULTANTS T
he Indian attractions industry is on the verge of its next stage of growth. There are a number of well
established amusement parks, waterparks and FECs operating successfully across the country, but now’s the time for the Indian industry to decide whether there’s potential to increase the number, size and sophistication of its product. Like any market, there are barriers
to entry for potential operators. Land is expensive, the approval process is a night- mare (multitude of approvals required from multiple local, provincial and federal government departments), the market is relatively uneducated for immersive experi- ences and alternatives for time and spend are relatively affordable. One of the major issues in India is the
lack of public infrastructure to support development. Air travel is abundant, but the lack of decent arterial and connect- ing roads, reliable and high capacity rail networks or other systems to move large volumes of people from the transport hubs to the attraction are a major issue. Indian governments at all levels really need to decide whether this industry has the poten- tial to provide economic benefi t to the country and assist operators by establish- ing the “connective tissue” that will support the life of any attraction in the long term. Aside from these barriers to entry, the
industry is unlikely to attract institutional investment from structured capital markets. The entrepreneurial spirit is abundant in
India, but with restricted access to inter- national capital, the result is an industry made up of primarily owner-operators that participate more from a “love” of the prod- uct and as much a lifestyle business as one for strict ROI interests. The income stratifi cation in India also needs to be considered. Although India has a population of 1.1bn, only 20 to 30 per cent are going to be accessible to opera- tors of top-end product and more than half live on less than US$2 (£1.20, 1.39) a day. But that’s still 350 million people! The next part of the problem is that secondary revenue streams don’t seem to achieve the same contribution levels as their overseas counterparts. Indians are very price sensitive. Also, affl uent Indians love their food and take great pride and joy from their own cooking – they may think twice about paying for food they can cook better themselves. Additionally, revenue from merchandising programs in parks reliant on local visitors is always lower than those with a high percentage of tourists. Combine this problem with the low F&B spend and a low ticket price and profi tabil- ity starts to look diffi cult. It’s a well-known fact that for attractions
of this scale to be profi table in the long term, they must generate upwards of 40 per cent of visitation from tourism markets. Given the average spend of the Indian population, this burden needs to be shoul- dered by international visitors. The trouble is, India isn’t known for this industry, which
“Disney and Universal create awareness and demand,
but without the government addressing infrastructure, it’s diffi cult to see them being interested“
48 Read Attractions Management online
attractionsmanagement.com/digital
makes conversion of international tourism numbers diffi cult. Here’s the chicken- and-egg problem. Disney and Universal create awareness and demand, but without the government addressing some of the key barriers relat- ing to infrastructure, it’s diffi cult to see them being interested in the near-term. Indians are aspirational and proud of
their culture. Therefore, attractions that celebrate India’s rich cultural heritage and diversity should do well, as should a world- class waterpark. Due to the hot climate, the opportunity to operate all year round is plausible in most areas and local markets have responded well to existing waterpark businesses. If these are operated at best industry practise standards, India could attract the elusive international market in at least one sector. However, at the moment, the range of product simply isn’t sophisti- cated or accessible enough to create a real option for Indian families that generates repeat visitation on a profi table scale. The good news for an operator in India
is that labour is plentiful and wage rates are contained and affordable for operators. However, access to industry expertise is extremely limited, as is an educated and motivated employee base that can help create memorable experiences for guests and uphold good operational discipline. Still, major hotels operate success-
fully, so perhaps the key is to re-position the industry as tourism. Create the right product with a point of difference, make it accessible and relatively affordable and the visitors will come (assuming of course that marketing is on-target and operational standards are aligned with expectations).
Steve Peet Consultants specialises in amusement services in Australia & Asia ●
AM 2 2011 ©cybertrek 2011
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78