While coronavirus has hit the business of Wonderla Holidays, one of the biggest amusement parks in India, it has also given the company newer ways to expand.
Back-to-back lockdowns and low footfalls have left many theme parks in financial distress. It is estimated that the amusement and theme parks segment has suffered losses to the tune of Rs 90,000 crore so far.
In this scenario, owners of many COVID-hit theme parks approached Wonderla Holidays' MD, Arun K Chittilappilly who is now evaluating this opportunity.
"We are looking at a theme park in Mumbai and one property in Delhi. We are interested in these properties because we are looking to expand in north and west. Plus, this is an easier way to expand."
For expansion, Wonderla Holidays is planning to spend Rs 500 crore. However, all the investment will not go into acquiring existing theme parks as the company is planning to start its own new properties.
"Out of the Rs 500 crore, Rs 300 crore will go to Chennai theme park and the rest is for other projects," said Chittilappilly.
The Chennai theme park will be as big as the existing Wonderla Holidays' park in Bengaluru, Hyderabad and Kochi where the capacity is around 10,000.
In addition to Chennai, the company is also looking at new projects in Odisha and Gujarat.
As for markets like Delhi and Mumbai, Chittilappilly said that there aren't many parks and they think that Wonderla Holidays can operate in a financially stable way.
But the company is not looking at complete takeover of these parks.
"We are taking over these parks as management contracts and not looking at take over in terms of buying the properties."
Yet, the question arises that why is Wonderla Holidays looking at expansion at a time when the COVID-19 scare is resulting in low footfalls.
Not a smooth ride
In the quarter ended March, 2021, Wonderla Holidays registered total footfall of 3.11 lakh against 4.05 lakh in the corresponding period of last financial year.
In terms of each park, the Bengaluru park saw 1.18 lakh footfalls, Kochi park registered 0.82 lakh and Hyderabad park reported 1.11 lakh footfall.
After seven months of shutting shop, Wonderla Holidays' Bengaluru (dry) park had reopened last year in November followed by Hyderabad park in January.
In Q4 FY21, parks were functional only from Thursday to Sunday in January, and in February they were operational from Wednesday to Sunday. It was only in March that all parks opened for all days.
The restrictions on capacity and staggered reopening due to coronavirus outbreak resulted in a loss of Rs 49.93 crore as against profit after tax (PAT) of Rs 64.78 crore during the corresponding period last financial year.
Yet, Chittilappilly is confident about the amusement park business in India as he thinks the demand is there and will come back.
Business will be back
"There's going to be demand especially after people get vaccinated. So, within a year we will see some recovery and after a year and a half business will be back to pre-COVID level," he said.
He added that last year they were open only for three months and in 2021 he expects the parks to stay open for six months. Plus, if parks continue to remain open in the upcoming festive season, which is the strongest period for the company, that too will result in strong traction, he said.
Recently, the Karnataka government allowed amusement parks to reopen and this will lead to restarting of Bengaluru park.While Kochi remains shut, Wonderla Holidays will reopen Hyderabad park on August 5 and Bengaluru park in August too.