Wonderla, Imagicaa script a turnaround as theme parks experience a revival

Wonderla recorded 1.1 million footfalls in the June quarter, up 24 percent from the same, pre-COVID period in  FY20. Revenue increased to Rs 152.3 crore from Rs 121 crore in the same period in FY20. Net profit rose to Rs 64.38 crore from Rs 42 crore in Q1 FY20.

Imagicaa recorded a 5.6 percent increase in footfalls in the June quarter to 491,000 from 465,000 in Q1 FY20. Theme park revenue grew by 13.8 percent to Rs 78.6 crore from Rs 69.6 crore in Q1 FY20.

The company posted record earnings before interest, tax, depreciation and amortisation (EBITDA), a measure of cash profit generated by its operations, of Rs 42.6 crore in Q1 compared to Rs 28 crore in Q1 FY20.

"This particular Q1 (of FY23) has been best ever. Q1 has seen strong operating performance and we have brought a turnaround in the business. In this quarter, we turned PAT (profit after tax)-positive for the first time since inception. Our business was written off many times, but now there has been a massive shift," Imagicaaworld Entertainment CEO Dhimant Bakshi said.

Growth in footfalls

Both companies expect to sustain growth in the coming quarters.

"The (upcoming) festive period is important as after Q1, Q3 sees highest footfalls. We are expecting good numbers and we are going to take price hikes from September that will also help in realisation," said Chittilappilly.

"Combination of having groups coming in (during the festive period) and price hikes should help us get higher realisation. Roughly about Rs 100 price hike across all the parks is what we are planning," he added.

The Wonderla MD expects the number of visitor footfalls to continue growing.

"Bengaluru and Hyderabad saw mostly retail footfalls in Q1, while Kochi had 30 percent college students that came from Tamil Nadu. The three parks are attracting slightly younger visitors versus pre-COVID (times) and per-visitor spend is higher," he said.

Its amusement park in Bengaluru recorded a 7 percent increase in footfalls versus FY20, which that shows it is running at almost full capacity, said Chittilappilly.

"Hyderabad had a 39 percent increase in footfalls, which is the highest footfall we have received in the park. We are getting heavy footfalls already, so getting this kind of jump next year will be difficult. We will have some marginal increase in footfall," he added.

Imagicaa expects more groups to visit its parks in the second and the third quarter. "This year the water parks also did well. For 14 days in Q1, we were house full,” said Bakshi, adding that water parks contribute almost 50 percent to the company’s revenue.

Non-ticketing revenue

Imagicaa is not looking to increase ticket prices but is counting on non-ticketing revenue to boost sales.

"Food and beverage (F&B) and retail merchandise, we have focused on a lot since the beginning, and it contributes 21 percent (F&B) and 7.5 percent (retail merchandise). It has been steadily growing. We opened after COVID and did not start retail merchandise (sales) at full capacity because it is a category to source. So, here there's headroom to grow," added the CEO.

Wonderla is also targeting the retail business.

"In next one year, we are planning to refurbish most of our restaurants in all the parks and make it a more premium offering. We see around 10-15 percent growth in F&B share which currently contributes 24 percent to overall revenue," said Chittilappilly.

Expansion plans

Along with the focus on non-ticketing revenue, Wonderla is also looking at adding more rides to attract visitors.

"Rs 4-5 crore worth of rides will be added in each of our parks. We spend 10 percent of our topline on rides. Topline in FY20 was Rs 280 crore and we will do much more than that this year. Roughly about Rs 15 crore will be invested in existing three parks," Chittilappilly said.

The company is also looking to develop theme parks in Odisha and Chennai that it expects will become operational in three years.

Imagicaa plans to focus on water parks to boost capacity.
The company, which had a debt of Rs 1,600 crore, has engaged with a strategic investor, the Malpani Group, that already runs two water parks under 'Wet N Joy' brand.

"Shareholding pattern has changed. New promoters hold 66 percent whereas lenders hold 10.6-10.7 percent. Existing promoters (Bollywood film producer Manmohan Shetty) got diluted to sub-6 percent," said Bakshi.

Resort revenue

The two companies are also seeing good traction in their resort business.

Imagicaa's hotel property Novotel reported Rs 13.8 crore of revenue in Q1 FY23 versus Rs 11.4 crore in Q1 FY20 with an occupancy of 52.7 percent.

"Corporate travellers will get activated in Q2 and Q3. Also for Q3, we see wedding inquiries and advance corporate booking," said Bakshi.

Occupancy during the festive period is expected to go up to 58 percent.
Wonderla's Bengaluru property posted a 28 percent growth in revenue in Q1 compared to the same period in FY20.

"We want to add premium rooms and we will be spending about Rs 1-2 crore to expand the resort. Its contribution currently is small, less than 5 percent, with a topline of Rs 12-13 crore per year but we want to improve realisation through our resorts and then take it to other cities," said Chittilappilly.