By Kohinoor MandalNICCO Parks & Resorts Ltd., the world’s only ISO 9000 certified park, is a trendsetter in the industry, has many firsts attached to its name and, is one of the few profit-making organisations in this sector. Incorporated in 1990, it is the only listed company in the country’s amusement park industry -- Calcutta, Mumbai, Bhubaneshwar -- which is showing profits. Moreover, it has been paying dividends for the last five years. All this because the promoters believe in a litmus test of profitability.

The Calcutta-based Nicco group has interests in power and telecom cable manufacturing as also in financial services. Till recently, they had a stake in an infotech company, but they sold out and have put the money back into their cables business.

The park history
Around 15 years back, the West Bengal Government had set up Jheel Meel, a park in the eastern outskirts of Calcutta alongside the then upcoming satellite township -- the Salt Lake city. The park had a toy train, a small lake, a mini zoo and a flower garden. But, it was bereft of hi-tech rides. As a result, the park did not find many patrons leading to a draining of government’s resources.

It was at this point in time that Nicco group’s chairman and managing director Rajiv Kaul in joint venture with the Left Front government of West Bengal introduced new rides at the park which saw its fortunes rise. It was the first joint venture of its kind in this sector. The city folk, who sought to gain respite from the humdrum city life and concrete jungle through this entertaining avenue, thronged the park in huge numbers.

Myriad groups attracted
Says chief executive Arijit Sengupta: "We don’t target any specific groups. General public is the best description of the visitors to the park. But going by demographic parameters it is mostly the upper classes and the A, B, C and D sections of the middle class that patronise amusement parks.

And these groups constitute: 25 per cent children and the rest adults." Nicco is also into institutional marketing including schools, clubs and small groups from different localities.

But yes, the company does lay emphasis on the location of the park -- for the Calcutta park there was no choice of location as Nicco had taken over the existing park from the West Bengal government -- the local people and the means of transportation to the park. Such emphasis takes care of the numbers frequenting the park. All such care was taken while setting up its second park at Bhubaneswar, Orissa. This park, a subsidiary of Nicco Parks, was set up in joint venture with the local government.

Nicco confirms to the normal industry standard for small parks. At an average, in India, the number of rides that amusement parks provide is 15-20 and 30-40 for big and small parks, respectively.

As for revenue, it is broken up in terms of admissions and sale of tickets for the rides. It is done on a daily basis and at the end of each day it is then added up. The revenue model is highly encouraging. Only 25 per cent of revenues accrue from gate receipts. Unlike most others in the industry, the company is not vastly dependent on this revenue stream.

Food counter sales account for another quarter of revenues, which means that the company is serious about this mode of revenue as well. Whatever facilities it has built are being appreciated and patronised. The bulk of revenues -- 50 per cent comes from ride tickets, which is a direct play on two things -- popularity of the individual rides and an inclination of a substantial percentage of the clientele to prefer spending money in small lots than at once. Ride tickets also have another advantage -- non-performing rides can be easily identified.

But basically the operating yardstick for the industry certainly is profitability, as is the case with any other industry. The ability to draw satisfied repeat visitors is also important. At Nicco Park, says Sengupta, it is about 50-60 per cent.

The cost sheet
Major running costs for this company are labour and repairs and maintenance. There are a number of Indian equipment manufacturers that are into manufacturing rides, some like Arihant with linkages to parks. Even Nicco Parks manufactures rides. Its own rides have been installed at Nicco Park and have been sold to its subsidiary park at Bhubaneshwar too. The management claims that most existing rides match international standards. Nicco has a 60-70 strong engineers team who maintains the rides at the parks. Even though some of the rides are long lasting they have to be maintained properly. And, at regular intervals Nicco introduces new attractions to keep up the novelty of the park.

An advantage
For an amusement park, the main components of project cost are land, site development and cost of the rides. Nicco obviously started off at an advantage in that it acquired developed land (a park) and that most of its machinery has been manufactured in-house. Also, the normal gestation period between financial closure and the opening of the park varies from one to two years, which in Nicco’s case was again negligible since it was taking over an existing facility.

There are no special incentives that are offered to amusement parks. In fact, the government is charging an entertainment tax which varies from state to state. It is imperative to abolish this tax as these parks offer educative entertainment and wholesome recreation to families. The payback period also varies for the different players. Nicco Park is a professionally run company and has been clocking profits from the beginning.

Future prospects
Avenues for expansions are bright what with Nicco Park being one of the few cash rich companies in the sector and vacant land at its disposal. In fact, Nicco proposes to set up a resort at the park. As Sengupta states, "parks located in other parts of the world have more thrilling rides than ours in India. This is mainly because Indian parents do not prefer the more adventurous rides. Even as this is the case, we regularly upgrade our rides of course to acceptable levels."

With the sector is attaining critical mass it definitely is in the reckoning to attract more government attention by way of incentives. This, also because certain locations are on the tourist map just because of an amusement park there! Water World Resort at Mehsana is a case in study here. Its Shanku’s Water Park is a major tourist attraction.