Wonderla Holidays

Wonderla Holidays is in the amusement park industry. An amusement park is a collection of rides and activites to entertain a large group of people. I spent sometime studying the business model of Wonderla. Click here to read the rest.

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5 thoughts on “Wonderla Holidays

  1. How should one evaluate the risk of a death at these parks? There has already been a death in Bangalore unit in 2012 of a ~12yr old girl – wonder how that was the settled? Unfortunately in India the law is too late to be meaningful to the ‘affected’ party.

    Deaths have been a disaster for a few institutions – like Alstom Towers (the UK rides company) and I suppose SixFlags in US, another in Australia (whose name escapes). Always get the feeling that all valuations are thrown out of the window if there is an incident.

    Years ago – in 2000s there used to be Neeladri Park down from Wipro Gate 5. There was a death and its popularity died down. It has been folded since, and on the land there is a ~1500 units apartment block.

    Another note – on the social media there is an image making rounds where Wonderla is offering 20% discount to its Shareholders. Is it a sign of decrease in footfall?

  2. Great post as usual Jana.. I’m from Bangalore and visited Wonderla multiple times over the years. I saw that the employees in the Bangalore waterpark were involved in a long standing issue with the management – they had even put up a semi-permanent structure just outside the property for protesting. Not sure if that has been resolved – it has been a year since i have visited..

  3. Fine Analysis. I tried to play a devil’s advocate and explored the challenges faced by Wonderla. Let me know your thoughts:

    1. Evolving Customer tastes with greater expectations from a “park” experience due to:
    Increased global travel among Indians with trips to Disneyland, Sentosa Singapore etc.
    Rising avg. income and cheaper travels make trips to world class amusement parks in Dubai, Sentosa
    Singapore, Disneyland Hong Kong affordable / aspirational to the rising middle class

    2. Parks getting old: Kochi > 15 years; Bangalore > 10 years; only incremental growth likely.
    3. Falling footfalls due to:
    a. Subdued discretionary spending due to uncertainty in IT sector
    b. Increased ticket / non-ticket prices due to GST
    c. political agitations , Cauvery water protests on the Bangalore- Mysore highway
    4. No Novelty factor for repeat customers. Long Gestation period for introducing new rides. Approx. time: 1 new ride per year.
    5. Capital intensive business with rising cost of setting up new parks- Bangalore Park cost @ 5 crores in
    2005; Hyderabad cost 82 crores 10 years later (for land & civil works).
    6. Challenges in acquiring large land parcels in new cities for future growth & expansion:
    a. Unavailability of land parcels within City perimeters
    b. Land available only in outskirts (poor infrastructure and connectivity)
    7. Poor “Park” experience (personal)
    a. Extremely crowded during weekends and vacations leading to long queues and fatigue
    b. Increased waiting times also due to poor “queue” management as members of large group repeat rides,
    jump queues etc.
    8. Deteriorating ratios / numbers over the last 3 years: (Source: Valueresearch)
    a. ROCE % = 22.76% (2016) < 27.55% (2015) < 38.02% (2014)
    b. RONW% = 15.75% (2016) < 20% (2015) < 29.56% (2014)

    Regards
    Ravichand

  4. Thanks Jana, for the wonderful post. Wonderla has been on my radar for long. Ever since I visited Disney at Florida during a vacation, I realized the untapped potential. Management seems to be acting on those lines and increasing their offerings (resorts, early/late entry, etc) and growing the non ticketing revenue.

    Could you please share your views on the following;
    1) Like some one said before, risk of litigation can throw all calculations for a toss. How to factor that in?
    2) When it took close to 8 years to open a 3rd park, why is it so certain they will open a new park every 3 years? (any particular reason they delayed the opening?)
    3) Since they develop rides in-house, can they re-deploy it at at new parks to reduce capex?
    4) They have to constantly bring new rides to entice repeat customers (should do better than now). Will that put additional pressure on capex.

    Personally, I have been to Wonderla thrice and enjoyed every single time. Its a great place for team outings.

    As this is my first comment, I want to use this opportunity to thank you for free sharing of your knowledge and learning with everyone.

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