One of the biggest players in the amusement park business in India, Wonderla Holidays is scaling up investments 4X, and expanding its three theme parks in Bengaluru, Hyderabad, and Kochi with new rides and attractions.
The company spent Rs 10-15 crore in adding new rides and attractions in FY22-23, and is now looking to scale up spending to Rs 60-70 crore in FY23-24.
"We have not done large scale investments in the last four years on big rides. We typically reserve 10 percent of our topline for this. Last year (FY22-23), we did Rs 450 crore, so by virtue of that we would’ve spent Rs 45 crore in the coming year on new rides. But because we have not spent for the past few years, we are looking at spending a higher amount, about Rs 70 crore.
Shares of Wonderla were up 2.8 percent at Rs 490.75 on BSE during trade on May 26.
``A lot of that money will go to the Hyderabad park, which will see the maximum expansion. About six water-based attractions will be added in Hyderabad, one high-thrill attraction and two water-based attractions will be added in Kochi, and Bengaluru will see some new rides and one virtual reality attraction in FY23-24," Arun Chittilappilly, Managing Director, Wonderla, told Moneycontrol.
After a strong recovery in the post-Covid phase, the company is also looking at resort expansion. Currently, Wonderla has one resort at its Bengaluru park, where 40 more rooms will be added in FY23-24 to the current portfolio of 84 rooms.
"We want to upgrade the Bengaluru resort by bringing the water park to the resort in FY23-24. The plan to add a resort in the Hyderabad park is in the early stages, but most likely it will be close to the Bengaluru resort in size," Chittilappilly said.
Wonderla is also adding two new parks. "We have invested Rs 110 crore so far in the Chennai project, and construction will take about two years. The Odisha project will start by 2025. About Rs 20 crore has been spent on it so far," Chittilappilly added.
The theme park business was one of the hardest hit by Covid, with a big drop in footfalls and revenues. With the number of Covid cases coming down and Indians spending more on outdoor activities, companies like Wonderla have seen higher footfalls leading to strong revenue growth.
"Pre-Covid, the highest footfall was 25 lakh, but now we’ve crossed 33 lakh footfalls in FY22-23. Post-Covid, we’ve seen about 1.6X growth in footfalls," he said.
He added that while the Bengaluru park continues to be the flagship with the highest revenue contribution, Kochi and Hyderabad have done well in terms of growth in the last financial year. "Pre-Covid, Hyderabad was lagging behind Kochi and Bengaluru by a big margin. Now, Hyderabad performs on par, and at times better, than Kochi," he said.
Chittilappilly said the ongoing summer has been a mixed bag, as April saw lower demand because of Ramzan, as not many people come to the amusement park during that period.
On the pricing front, the MD said that the company has increased prices by 10-12 percent in Q4 versus Q3. "We usually hike prices 1-2 times a year. We also hike prices when we add new attractions, which we will this year (FY23-24)."
The company reported a gross revenue of Rs 452.4 crore in FY22-23 as against Rs 282.9 crore in FY19-20. EBITDA for the year ended March 31, 2023, stood at Rs 234.68 crore against Rs 116.1 crore during FY19-20. Its profit after tax (PAT) was Rs 148.9 crore in FY22-23, compared to Rs 64.78 crore during FY19-20.
Chittilappilly said the theme park business in India is still in the nascent stages, with few players and modest capex.
"Lot of people still don't think of amusement parks as a natural option for a weekend getaway. But in our home markets, we have been able to bring amusement parks into that consideration set, because a sizeable number of people are coming to the park. Also, the growth in domestic tourism and shorter vacations bode well for the amusement park business," he explained.
