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METZGER
entertainment complexes and indoor/outdoor attractions. How do we
service that market? Right now they are serviced by our American
expo, but the market is getting bigger and bigger and may deserve its
own office. So we may have an Asian office, a Latin American office, A
Middle Eastern office, it’s just a matter of when.
Is all the industry growth concentrated in these areas?
Asia is leading in the development of leisure markets, well ahead of
the Middle East. The Middle East is going to come up behind it. They
have announced I think about 20 theme parks in Dubai, I don’t think
they’ll build 20 but they are going to build some. They have the staying
power though, they can build something and keep it running and
operating at high quality until the market evolves.
I think we are going to see Eastern Europe, Russia, start coming
along and Africa as a matter of fact. In South Africa we recently
announcing a big project at Ruwaad (Amazulu World) and there are
several smaller ones. It’s going to take a while to mature, and the
politics has to take a while to settle down in some of these places. It’s
going to be a little unpredictable for the next few years in the Middle
East, but the safe haven is the United Arab Emirates (UAE) and right
now that the UAE is going to fill the void for recreation and leisure in
the region.
What about the industry in Western Europe and the US, will it
stagnate?
I don’t think it will, because people like Merlin and the other large
consolidators, like Six Flags did years ago, will keep the industry on its
toes. If something stagnates and starts to become good value for the
dollar, someone’s going to come along and gobble it up, and then they
are going to make improvements and maybe sell it off again. I don’t
think the investment market will ever allow this industry to become
stagnant, there’s so much cash flow; it’s just so attractive. It’s relatively
easy to increase that as a company, you just jump in, buy your
cashflow and leverage your investment.
Is the traditional (“regional”) amusement park model broken?
The European family day out, as I like to think of it, I think you will see a
whole bunch of those appearing in China, you will see them in Korea;
they are starting to appear in India. There are a lot of markets that can
support these and it’s lot easier to build a regional entertainment
product than it is to build a billion dollar destination resort.
How well is the industry poised to survive an economic downturn?
Those facilities that are very well run, or family run, are not going to
have good years, but they will survive, they always have. It’s those that
are highly leveraged that are going to require large attendance and
per cap increases, they have to because every quarter they have to
report their earnings. They are under a lot of pressure.
How vulnerable are ride manufacturers?
That can be tough, because of their lead time. Most parks will add
some major attraction every two to three years, and then in the off
years they will run promotions. But if they decide to stretch that to
one more year, if all of them decide to go every three years instead
of every two years, then the ride manufacturers could be hurt. I hope
they are not.
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