Visitors are thronging amusement parks as they seek a thrilling out-of-home experience and me-time with family and friends. If the financial numbers for the June 2023 quarter (Q1FY24) of listed players such as Wonderla Holidays and Imagicaaworld Entertainment are an indication, the business is booming, led by higher disposable incomes and limited entertainment options.
“What theme parks are seeing is a continued good performance, which began with the revenge consumption boom seen during the June 2022 quarter. At that time, people were tired of staying indoors and returned to theme parks with a bang. But the good part is that the trend has stayed and the numbers are tracking well,” says Jai Malpani, managing director, Imagicaaworld Entertainment.
To be sure, India’s theme parks market is a fraction of the global market, pegged at $55 billion. A boom in international visitors has prompted big players such as Disney to announce an investment of $60 billion in their theme parks business over ten years. The bet is also tied to a broader strategic shift by the company, opting for out-of-home and digital entertainment versus in-home entertainment, reflected in its scaling down of linear TV operations across the world. The company is weighing strategic options for its India TV business, under the Disney Star umbrella, too.
Global consulting firm HVS, which specialises in the hospitality industry, says the Indian market is at a mere 1% of the global theme-park industry, with few national players and many small and regional players. Among the few popular names include Imagicaa World and Wonderla, which are also listed on the stock exchanges, though names such as Essel World, part of the Essel group, and among the first theme parks in India, located at Gorai, near Mumbai, continuing to invoke childhood memories of school picnics and outings, despite being shut for some time now due to debt concerns.
Essel World’s loss, however, has been Imagicaaworld’s gain, with the company which runs the Imagicaa theme park, water park and snow park at Khopoli, near Mumbai and a water park in Surat, Gujarat, having recorded a 13% year-on-year increase in footfalls in the June quarter of FY24 to 556,023. When compared with the pre-Covid period of Q1 FY20, the growth in footfalls is even sharper, at nearly 20%. Theme park revenue, meanwhile, grew by 13% year-on-year to Rs 100.3 crore, but jumped 44% when compared with Q1 of FY20.
Net profit for the quarter is not comparable since there were write-offs during the period due to a debt resolution plan put in place last year. This also resulted in an ownership change, with the Maharashtra-based Malpani group, which runs the Wet N Joy water parks in Lonavala and Shirdi respectively, picking up a 66.25% in Imagicaaworld (last year), which has since gone up to 70% (now). Banks, insurance companies and non-banking financial companies, on the other hand, have a nearly 9% stake in the firm.
However, Imagicaaworld’s earnings before interest, tax, depreciation and amortisation (Ebitda), a measure of cash profit generated by its operations, grew 28% year-on-year to Rs 54.4 crore. When compared with the pre-Covid period, Ebitda growth is 94%, its results show.
Wonderla, which has theme parks in Kochi, Bengaluru and Hyderabad, reported 1.1 million footfalls in the June quarter, in line with the number reported last year, but up 24% when compared with the June quarter of financial year 2019-20 (FY20), which is the period before the Covid-19 pandemic. Revenue touched nearly Rs 185 crore in Q1FY24, a growth of 24% versus the year-ago period, but higher by 53% when compared with the pre-Covid quarter. While net profit grew 31% year-on-year, it was up 21% versus the June quarter of FY20.
In a recent conversation with Fe, Arun K Chittilappilly, MD, Wonderla, said that the company was planning to expand its operations across the country as the theme park business was seeing good traction.
The company has been in talks with state governments such as Madhya Pradesh, Punjab, Goa and Gujarat for leasing out land to set up future projects under the public-private partnership model, he said.
“State governments are open to the idea of doing PPP projects. This will help them get the investments into their states. And it allows us to get a wider footprint,” he said.
The company has set aside Rs 220 crore as capital expansion for FY24, which will go into expansion of existing parks, and setting up new parks at Orissa and Chennai in Tamil Nadu each.
Malpani says that the company plans to focus on water parks to boost capacity and will look at expanding its footprint into more states in the coming years.