The real singularity of Tejix is that we are a pure player in the theme park market. We constantly meet our own high demands and have a definite idea about who we are and how we approach things. Above all, we put guest safety and show quality before all other considerations. We appreciate the high standards of excellence and integrity of the real showmen who run parks where visitors can enjoy a safe and memorable experience.
As such, we have the opportunity to participate in projects of all sizes: ranging from the background music in a souvenir shop to a mega-attraction that receives millions of visitors every season. No need to say that the budgets of these two extremes do not have much in common. Many question the readiness of large parks to pay tens of millions of Euros for a single attraction. Without properly appraising the context, the cost would seem exorbitant. An outsider might think it would be possible to just as well for a lot less.
This observation makes sense if we consider an attraction as a dead expense with an unlikely return on investment. But experienced operators know that a new attraction is an investment that will increase the park capacity (the guests present in the attraction and its surroundings, such as queue line, preshow, shop and restaurant), generate ancillary revenues, and participate in the prestige and promotion of the park.
Size matters ?
Each time a new investment is considered, these items have to be weighed against other considerations such as throughput, operation, maintenance and de-construction costs. The other key factor is the attraction life span.
At Tejix, we are sometimes called on to carry out well deserved rehabilitation work on the same attractions we installed twenty years ago (or more!). There is no doubt that the guests enjoying such classics do not know much about their fiscal status. They appreciate them (perhaps as their parents did before them) and those beloved shows are likely to be one of the motivations of their re-visit.
The total project cost has to be seen in context. Universal's World of Harry Potter in a family park would be a financial disaster. A good way of putting things into perspective is to define a cost for each guest that experiences the attraction.
We can make a rough estimation by applying the formula :
((Total investment / amortization period (in days) + operating costs + maintenance costs) - profits on merchandise, food and beverages) / flow
If we apply this to 3-year lifespan investment costing two million euros with a daily capacity of 4000 visitors, and assuming ancillary revenues are non-existent, the cost of each guest passing in the attraction is almost one Euro.
At the other end of the spectrum, for a 100 million Euro mega attraction open for 20 years with an hourly capacity of 3,000 visitors, the cost per visitor drops to 0.60 Euros. And we have not taken into consideration that high capacity probably adds between 6 and 10000 "attraction units" and the attraction is partially reimbursed from the income generated by shops, restaurants and adjacent food carts.
In other words, a successful high-volume attraction with a long lifespan costs less than a chaotic project that has to be closed after a few seasons of bad publicity. This simple calculation should be applied whenever an extension is planned.
Long-lasting shows are money makers
In our short-termist world, in which technology plays a determining role, coming up with long lasting concepts is a real challenge. In fact, few designers even think about where their creation will be five or ten years after its opening.
However, there are some good examples of strong concepts that remain at the top of the much-loved attractions lists for generations. Are these shows filled with the latest interactive technologies? Not in the least. Elements that characterize lasting attractions are invariably great emotional impact and flawless execution. They are the results of brilliant minds and generous storytellers addressing an audience that they understand and respect.
This is where things get complicated budget wise. The supply of attraction storytellers and execution specialists is short (although the quantity of wannabes ready to compromise to pay their bills seems infinite). The worst danger is producing an attraction designed to be amortized over several years, which is shunned by the public in the first seasons. Very often, their owners have no choice but to incur unanticipated expenses for “quick fixes”. Unfortunately, it requires more than patching to correct structural defects.
Assembling a team of experienced professionals is essential. As there is more money than competence in the world, the market seems to play against the parks. This largely explains the price inflation blockbusters (it is estimated that 50% of the 100 million Euros attraction cost is spent on intellectual services). This seems high, but if the professionals designing these shows have work, it is because their design result is profitable for their clients. This is not true for "cheap" and risky experiments that must be closed after the few seasons it takes to dig a money pit.
The owner nightmare
When building something, optimizing costs is perfectly legitimate. But as we have seen, the attraction cost is determined by its throughput. Yet few owners are concerned with optimizing that essential factor, both in design and once the attraction is running. Two often underestimated factors impair the show capacity: recycling and failures.
Recycling (or load / unload in the case of a ride) should be limited to the time required to install guests and ensure their safety, not more. If the choice is given to a student hired for the season, chances are that he'll opt for spending the day on just one load of guests. Once again, the key is clear and strict operational instructions, along with quality training and supervision. Technique can help to some extent: we program the theaters we design to cycle without manual intervention. The operator can, at worst, interrupt the loading process, but the system will remember each time this function has been used. The maths is simple: even for a long, 10 minute show, losing a single minute on each cycle lowers profitability (or raises the cost) of the attraction by 10% ... Imagine all the buyer’s efforts in negotiating the project ruined by a teenager who prefers his own comfort to that of visitors ...
Failures are another issue. A stopped show is not only unproductive; it becomes a powerful, anti-marketing instrument for its park. Once the decision is made to empty the queue line, dozens of tweets relating the incident are sent. This is how some attractions have built their sulfurous reputation. Only a rigorous and methodical design can maximize the uptime of an attraction. Savings made at this stage are invariably counter-productive. Once again, investment has to be considered with the lifespan perspective.
A typical attraction is composed of several elements: land, building, equipment, intellectual services ("fees"), and licenses. Specific depreciation rules apply to each category. Regarding technology, we design our systems like industrial devices that can be amortized over a longer period of time than regular audiovisual systems. However, some elements such as video projectors must be depreciated more quickly. These parameters must be taken into account when assessing costs. An analysis detailing the life cycle and amortization of each group of key elements should be undertaken before considering an investment.
Maintaining the show in perfect condition is paramount: An attraction whose maintenance is neglected will need, at some point, expensive rehabilitation. Meanwhile, it is likely that the show has not been running in accordance with its quality standards. It's a bit like driving a wrecked car. The more you delay the repair, the more you'll have to pay as things gets worse, and you'll miss the enjoyment of driving a nice car in the meantime.
The question of running a half-working show introduces the all too important issue of customer respect : is it fair that two visitors paying the same amount to get the same experience are rewarded with two different products? In other words, is it fair to settle for poor quality? Does the park have procedures outlining who can make the decisions and what is the minimal show quality? As always, the devil is in the details. The operator incapable of perfect integrity in show quality is likely to find himself in the out of control spiral of unpredictable expenses.
The only acceptable approach consists in stringent maintenance and operating procedures. Constant verification, such as daily pre-opening punch lists, is important as small issues can be detected and immediately corrected.
Maintenance problems are often rooted in the temptation to "almost good" mentality to begin with. This is most often a cultural reflex rather than a real lack of budget. Good intentions are of little help in the hospitality business, in which mediocrity never rhymes with financial success. According to Dieter Rams "nothing should be left to chance in the design since the attention and accuracy in the design process demonstrate respect to the customer." Whatever the size of the project, only a virtuous, uncompromising design approach creates the momentum to build the foundations of a true, lasting success. In contrast, mediocrity (in the literal sense) contains the genes of failure which tend to spread like a contagious disease in all layers of an organization. Everyone can make mistakes. Persevering with a design which has known weaknesses is dangerous and demeaning, not only for parks but for also for their visitors.
« Errare humanum est, perseverare diabolicum »