The amusement parks business ain’t fun—or at least, that’s the India story of amusement parks for you. It’s a roller coaster ride for most like Kishkinta in Chennai, which has not yet broken even after 12 years in business.
Those who have managed to make a success story out of such ventures, like Nicco Park in Kolkata, have no magic formula to offer — except that they have successfully managed to tweak their business model to make it work for them.
Then there are newer players like Adventure Island in Delhi, and Wonder La in Bangalore, who might just redefine the business of fun parks in India with signature rides that measure up to global standards.
Sample some hits ’n’ misses. Half-adozen amusement parks sprang up across Bangalore over the last five years and at least two of them have gone out of business, including Crazy Water Amusement Park set up back in 1994 and more recently Sammy’s Dreamland, which was shuttered after a child was killed in a mishap on the site a few years ago. The Jalavihar water project in Hyderabad, planned for launch in 2000, finally opened in May this year after almost not making it.
Kishkinta in Chennai, it seems, got its timing all wrong. It was set up when interest costs were phenomenally high and it took many years to get that reduced to more realistic levels.
Even today, Tamil Nadu remains a heavily-taxed state and offers no tax holidays (which many other states do to promote tourism). This has led to the closure of a host of amusement parks like Little Folks, Dolphin City, Ahaa, which though were better off selling the land for good real estate realisations.
“The government does not realise that entertainment parks are capital-intensive, labour-intensive and maintenance-intensive,” says Jose Punnoose, Joint Managing Director, Navodaya Mass Entertainments, the company that owns Kishkinta.
Hitting the mark
The lure of amusement parks is catching up in smaller cities down south. Madurai, Trichy, Salem, Coimbatore and Kanyakumari are all getting new amusement parks because these towns either don’t have one or have a rapidly urbanised population that can do with a second one. Coimbatore, an industrial hub, and Madurai, an IT and manufacturing destination, are getting their second amusement parks.
You guessed it right—the first and foremost factor that works for amusement parks is location—as is the case with Wonder La, which happens to be the only full-scale amusement park for the huge yuppie crowd in Bangalore. “Despite being India’s IT capital, Bangalore did not have a full-scale amusement park for the thousands of youngsters working in the industry,” says Kochouseph Chittilappilly, Chairman and Managing Director, V-Guard, a Kochi-based electrical equipment maker that owns the venture. “Location is everything in the amusement park business, especially given the escalating real estate prices in the larger cities. We bought land early on Mysore Road and we’ve benefitted from a much better access with the newly renovated highway,” says Chittilappilly.
The newest kid on the block, Metro Walk Mall and Adventure Island in Delhi, is already making the most of its location. Situated a stone’s throw away (approx. 400 metres) from Rithala Metro station in north Delhi, Metro Walk Mall and Adventure Island has footfalls of over 30,000 on weekends and 5,000 on weekdays, and attracts visitors not only from Delhi but also from the satellite towns of Noida, Gurgaon, Ghaziabad and Faridabad.
Faced with a slight locational disadvantage, Kishkinta in Chennai compensated visitors with its water rides. As a result, it has many USPs—like water scooter rides as in Goa. The park is now readying a tidal wave facility at a cost of Rs 3 crore. This ride will have half-a-million litres of water crash into a wave pool and topple a ship and a light house. “Every two years, we keep innovating because we have repeat customers,”says P.K. Thothadri, one of the company’s directors.
Spread over 62 acres, Metro Walk Mall and Adventure Island’s USP is its state-of-the-art physical infrastructure. The Rs 400-crore project, a 50:50 joint venture between Unitech and International Amusement, combines the experiences of both a retail and an entertainment destination through its two distinct zones.
The first phase development consists of 96 retail outlets in the Metro Walk mall, and 19 rides in the Adventure Island. “We are increasing the number of rides to 23 by September this year. The rides are supplied by leading European manufacturers such as Intamin, Moser and Zamperla, who have clients like Disneyland, Universal Studios and Six Flags,” says Monny Vijeshwar, Managing Director, UAPL (Unitech Amusement Parks).
The promoters of the Jalavihar Entertainment in Hyderabad hope to achieve break-even in three years leveraging their multi-pronged advantages—the land is on a long lease from the government and is located in the heart of the city. The entry fee has also been kept at a reasonable Rs 50 plus an additional Rs 100 for those opting for water slides. The management of the park hopes to make up in terms of volumes. It has also saved on costs by sourcing the rides locally from Indian companies.
The first mover
The new entrants in the amusement park business will do well to learn a thing or two from Kolkata-based Nicco Park—the only listed company in this space and one that has been declaring dividend for the last 10 years.
For Nicco Parks and Resorts (NPRL), the business model has changed more than once over the years and is still evolving. When eastern India’s first Theme Amusement Park was thrown open in October 1991, the scope for family outdoor activities in Kolkata was limited to watching movies and cricket matches. So it was an instant hit. But now, it’s a different story altogether.
Now the revenue model doesn’t only rest on pricing (entry fee and fees for various rides) but on various other factors like sponsorship, co-branding activities, schemes and carrying out projects for other entrepreneurs on a turnkey basis.
Nicco, which is a joint venture company between Nicco Corporation and West Bengal Industrial Development Corporation, doesn’t see any threat in international players like Universal Studios entering India. “Their arrival in the country and their presence will only help expand the overall market and benefit all of us,” says a Nicco spokesman.
The amusement park space, which has seen a flurry of activity over the last couple of years, is interestingly poised. The new players who have entered this unpredictable space seem to have hopped on board a roller coaster.
Contributed by Manu Kaushik, Ritwik Mukherjee, Rahul Sachitanand, E. Kumar Sharma and Nitya Varadarajan
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