Courtesy of Parques Reunidos and IQPC Middle East, the content below is a summarized version of a talk that Jose Maria Letamendia delivered at an IQPC Theme Parks conference.

Mr. Letamendia is VP of Business Development at Parques Reunidos.  Be sure to download the entire presentation here.

Common Mistakes in Opening a Theme Park

Development Phase

• Unrealistic Opening Dates – targeting an unrealistic opening because of pressure from politicians, investors, or other stakeholders can potentially set off a vicious cycle of mismanagement.  More on this below, but often these opening dates are unrealistic because developers underestimate the lead times necessary to procure rides from vendors and negotiate terms with IP’s.
• Construction Problems – 99% of projects are over budget, often in large amounts.  Lack of careful planning and overoptimistic projects can lead to big problems, especially because construction companies are often local enterprises with no previous experience in building theme parks.  Whereas the theming process requires a high level of skill, especially if the terms of IP agreements demand it, and sets up a disconnect between the skill required and skills available in the market.

Operational Phase

The list of potential operational issues is lengthy, but a quick summary of some salient points is as follows.

• Budgets for the opening year are often wildly unrealistic and unachievable, because feasibility and market research reports tend to be overoptimistic about opening year numbers.
• F&B sizing is often miscalculated, leading to design problems in the kitchen, back of house areas, etc.
• Ride capacity is similarly often miscalculated.
• The complexity and duration of staff hiring and training is often underestimated, especially in countries with a limited previous offering in amusement and theme parks.  This leads to developers and owners often overhiring in staff and managers to compensate.

Vicious Circle

At all costs, the vicious circle must be avoided.  This is a cascading set of problems that results from the development and operational issues above.

Premature opening dates and operational issues result in poor performance, and can cause the park to come under criticism on social media and elsewhere.

In response to this, owners often undertake drastic decisions such as aggressive discounting.

This further exacerbates underperformance, which may lead to staff reductions and an inability to provide the level of service demanded by guests.  In some cases, a reduction in staff, staff training, and services can lead to accidents and security incidents.

In extreme cases, this cycle can lead to the collapse of a park.

About Parques Reunidos:

One of the leading global operators of regional leisure parks and one of the three truly global leisure park operators.

After 50 years in the sector, we now operate a well-diversified portfolio of more than 60 different assets (theme parks, zoos and marine parks, water parks, indoor entertainment centers and other attractions), spread out over various countries across Europe, North America, the Middle East, and Australia. Our asset diversity has placed us as the second-largest leisure park operator in Europe and the eighth-largest leisure park operator worldwide.

Overall, our parks received a total of approximately 20 million visitors every year, a number that materializes the success of our three-format business model:  operation of fully-owned parks, operation of third-party parks, and consultancy for park developers.

We have a highly experienced and committed management team with a proven track record across different geographical areas and economic cycles.

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