Active Stocks
Fri May 17 2024 15:59:40
  1. Tata Steel share price
  2. 167.25 0.81%
  1. Power Grid Corporation Of India share price
  2. 313.35 0.26%
  1. State Bank Of India share price
  2. 817.85 0.73%
  1. NTPC share price
  2. 365.40 1.11%
  1. HDFC Bank share price
  2. 1,464.90 0.33%
Business News/ Companies / News/  For Adlabs, a lot rides on new theme park

For Adlabs, a lot rides on new theme park

Adlabs Imagica, scheduled to open in March, will cost around `1,600 cr; firm has raised 66% debt from 14 banks

Adlabs Entertainment chairman Manmohan Shetty says the target is to attract more than three million visitors in the first year of operations. (Adlabs Entertainment chairman Manmohan Shetty says the target is to attract more than three million visitors in the first year of operations.)Premium
Adlabs Entertainment chairman Manmohan Shetty says the target is to attract more than three million visitors in the first year of operations.
(Adlabs Entertainment chairman Manmohan Shetty says the target is to attract more than three million visitors in the first year of operations.)

Mumbai: Imagine encountering Mogambo, a villain played by the late Amrish Puri in Shekhar Kapur’s 1987 superhero Hindi film Mr India, on a six-minute ride in a simulator that resembles the car of the film’s hero Anil Kapoor. You could also picture yourself on a water ride through a prehistoric jungle where you will run into extinct animals like dinosaurs and end the journey shrieking as your cart takes a sharp 70-foot drop before it hits the ground.

Manmohan Shetty, chairman of Adlabs Entertainment, hopes to offer some of these moments, which one experiences in theme parks such as Disneyland and Universal Studios, on a 300-acre plot near Khopoli, off the Mumbai-Pune Expressway.

Christened Adlabs Imagica, Shetty said the theme park, scheduled to open in March, will cost around 1,600 crore for which he has raised 66% debt from a consortium of 14 banks, led by Union Bank of India. “We head the consortium of banks that has lent money," confirmed a Union Bank official, adding that the project has been scaled down from its original size.

“We do have financial constraints... Some of the international theme parks are supported by state governments. Besides, consumer spends in India are lower, and people are reluctant to spend too much on entertainment, hence we plan to price the tickets around 1,400-1,500 for the entire day," said Shetty.

The first phase of development, on 100 acres of land, costs around 1,100 crore. “In 2013, we will also have the water park and a 300-room hotel ready," said Shetty. The remaining 200 acres of land “will be used for expansion of the theme park or associated high-end real estate development around it".

“Adlabs Imagica is created to accommodate 20,000 visitors at any given time. We are targeting above 3 million visitors in the first year of operations," said Shetty.

The park will have 21 attractions, including India’s largest roller coaster, 4D stimulation rides and a water park, and some of the themes will be ‘Indianised’. For instance, there’s a disaster ride with three Gods—Vayu (wind), Jal (water) and Agni (fire) and visitors will get a chance to shoot thieves in the ‘Ali Baba and the 40 Thieves’ game to collect bonus points.

The primary revenue streams will include ticketing, food and beverage, and merchandising. “We are expecting 75% of the revenue by ticket sales. The multiple secondary revenues will include retail rentals, sponsorships and advertising," said Shetty.

“Adlabs has also invested heavily in technology to enhance the visitor’s experience," he said. For instance, the company has partnered with US-based Gateway Ticketing Systems to ensure a smooth experience while purchasing the tickets. Entry will be through turnstiles that will validate wrist bands issued to visitors who may also opt for debit cards issued by the park.

The information technology or IT Infrastructure build at the theme park will allow for convergence of all services such as data, voice, show controls, animatronics (use of mechatronics, a multi-disciplinary field of engineering, to create machines which seem alive rather than robotic) and video over a fibre optic network.

India has seen entertainment parks in the past, albeit on a smaller scale. For instance, Pan India Paryatan Pvt. Ltd. is the holding company of EsselWorld and Water Kingdom near Gorai in northwest Mumbai. According to the company’s website, these twin entertainment properties are spread over 64 acres of land and include 79 rides and slides, and attract up to 1.8 million visitors each year.

EsselWorld executives were unavailable for comment.

On 30 July 2010, a Reuters report said India’s Reliance ADA Group is in talks with Universal Studios to build a $1.5 billion, 400 acre theme park and resort in the country. It had quoted a Wall Street Journal report, citing a person familiar with the matter. No further development has been announced on the matter since. A spokesperson for Reliance ADA Group, now known as Reliance Group, declined to comment on the matter.

“It’s a capital-intensive business. Hence, the investment, volumes, innovation, location (whether a Tier-I city or metro) and target audience typically dictate the success of a theme park," said Ashesh Jani, partner, Deloitte Haskin and Sells, without commenting about any specific park.

“Theme parks have to continuously innovate to keep visitors interested. In India, consumers are very choosy about how they want to spend the day. Names like Disneyland or Universal Studios will be familiar to those who have travelled abroad. Other theme parks will have to spend money on building a brand for themselves," he added.

While Shetty hopes to recover his investment in seven years after commencing operations, Jani said a mid-sized park (something like EsselWorld or Adlabs Imagica) would take around 10 years to recover its investment.

Globally, theme parks have been successful.

The Walt Disney Company rules the business with its gigantic theme parks. The Walt Disney World Resort, for instance, is located 22 miles southwest of Orlando, Florida, on approximately 25,000 acres of land. The resort includes theme parks—the Magic Kingdom, Epcot, Disney’s Hollywood Studios and Disney’s Animal Kingdom besides hotels, vacation club properties, a retail, dining and entertainment complex, sports complex; conference centres and the like.

The company also owns a 47% interest in Hong Kong Disneyland Resort through Hong Kong International Theme Parks Ltd, an entity in which the government of the Hong Kong Special Administrative Region owns a 53% majority interest. Located on 311 acres on Lantau Island, the resort is in close proximity to the Hong Kong International Airport. Hong Kong Disneyland Resort includes one theme park and two themed hotels.

On 8 April, 2011, the Walt Disney Company and Shanghai Shendi (Group) Co. Ltd (Shendi) announced that the Chinese central government in Beijing had approved an agreement to build and operate a Disney resort (Shanghai Disney Resort) on roughly 1,000 acres of land with additional room to expand in the future. Shanghai Disney Resort is currently targeted to open in approximately five years.

Construction has commenced and the company expects the total investment to be approximately 24.5 billion yuan to build the theme park and an additional 4.5 billion yuan to build other aspects of the resort, including hotels, besides retail, dining and entertainment facilities.

The Tokyo Disney Resort is located on approximately 494 acres of land, six miles east of downtown Tokyo, Japan. The resort includes two theme parks (Tokyo Disneyland and Tokyo DisneySea); three Disney-branded hotels; six independently operated hotels; and a retail, dining and entertainment complex.

Aminah Sheikh and Anup Roy contributed to the story

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed - it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 18 Dec 2012, 12:04 AM IST
Next Story footLogo
Recommended For You