In Investment Thrills, managing risk and return for the amusement parks & attractions industry Pieter Cornelis explains a unique method for approaching the question of investments in the amusement parks and attractions industry. Cornelis is convincingly dealing with some of the persistent myths within the industry and takes the reader step by step through all variables concerning investments decisions towards a comprehensive econometric model.
The book helps the reader to calculate the actual effects of investments made in the past, to think about the most relevant content and context factors and by doing so, make more soundly based investment decisions for the future. The for the industry all important and mythical X-factor is extensively discussed.
With this book readers get more guidance in the choices they will make in magnitude, frequency and direction of their investment so that the uncertainty about the impact of such investments is reduced. Central question is what experiences ultimately yield on the bottom line.
This book is by far the best investment for everyone in the attraction industry!
Innovation research in the amusement parks and attractions industry is a young phenomenon. There is an incomplete understanding of how the innovation processes take place in enterprises and organizations in the industry, and there is an obvious quest for better empirical evidence regarding innovation in the amusement parks and attractions industry, and its quantification.
For the amusement parks industry it is hardly possible to guarantee success, but research for Toverland-park in the Netherlands shows that investments in the theme park industry is not necessarily a random process. Despite the fact that, in our predictions, we have to reckon with many uncertainties and margins, the case of Toverland does indicate that the chance of a successful investment can at the very least be increased by carefully applying the working method described in this book.
The real effect of investment in Toverland was an increase in attendance of 22% in year 1 and 11% in year 2. The estimate I made beforehand of the effect of investment was 20% in year 1 and 11% in year 2. The investment was therefore not only successful for the park, but also for me and my model.
An important question in the industry is: what is the relative weight of content with respect to context? In other words, is the effect of the budget decision primarily determined by the X-factor of the content of the investment, or do the context factors determine the bandwidth within which the content can be effective?
The most important context factor is the growth potential that determines the limits on the effects of investments. The growth describes how the current attendance to the park relates to the market potential, given the nature of the catchment area and existing competition. The difference between the current attendance and the market potential is the ultimate growth potential of the investment.
It was suddenly clear that certain past investments accounted for a 2% increase in attendance, while other investments accounted for 10%, 15%, and even 20% extra visits in the first year. For the first time it was clear what the actual return on investment (ROI) would be for past investments.