The Real Reasons for Wonderland's Closure

[GoGoBoy]

I have found a couple of articles which give a far more accurate account of why Wonderland is closing and the deceptiveness behind it. This goes against everything the CEO said and what Sunway would like the general public to believe. The articles may make some of you even more angry but they are well worth a read. I don't think anything will surprise you though, most of us were aware of what has been going on for some time. The first one has some insight from Neil Balnaves from Dreamworld (Macquarie Leisure). I think he is spot on. Happy reading and don't forget to share your thoughts... Selling fun just not the Wonderland it used to be Author: Kathy Mac Dermott Date: 21/02/2004 Publication: Financial Review Wonderland Sydney's relegation this week to the theme park scrap heap highlights just how tough the business of selling fun has become. The 19-year-old thrill venue is being bulldozed for a traditional industrial estate, leaving Sydney without a major theme park attraction and Wonderland's Malaysian vendor with a hefty profit from the land sale. "Everyone is not doing as well as they were because the fall in international tourists has dented theme park revenues," forensic valuer Brian Cox says. Overseas attendees provide a better yield once they pass through the gates, with Japanese visitors the best spenders. Wonderland's demise follows that of the disastrous Fox Studios Backlot theme park, which Lend Lease and News Corp were forced to shut down after less than two years of operation, and the closure of Old Sydney Town. Other proposals just never progressed beyond the drawing board, including the $485million Studio City proposal for Melbourne's Docklands and the canning of Dolly Parton's Dixie Stampede planned for Surfers Paradise. This week Wonderland's chief executive Stephen Galbraith cited a litany of reasons for the park's demise, including Asian bird flu, SARS and the collapse of HIH. But other operators and analysts place the blame closer to home. One of the pioneers of Wonderland and now chairman of Macquarie Leisure, Neil Balnaves, said the park's vendor, Sunway City Berhad, had not invested any money into the complex during its eight years of ownership. "It was basically a 'wear-out' process," he says. Theme parks need a capital injection of between $3million and $4million each year to survive. Balnaves dismisses claims that international events including September 11 and SARS drove Wonderland to the wall as "excuses". "Overall the theme park industry is in great shape," he says. People are not travelling overseas and Macquarie Leisure has been able to tap into this to bolster its domestic visits. In its recently released interim results, Macquarie Leisure reported a 29 per cent improvement in Dreamworld's profit at a time when its international patronage was at an historic low. Balnaves started working on feasibility studies for Wonderland in the early 1970s and opened the park in December 1984. In the mid 1990s he said Wonderland was consistently attracting 1 million visitors a year. He describes its closure as a tragedy. "It's a real disappointment to see an asset of Sydney go like that because of a zoning change out of nowhere," he says. A spokeswoman from Wonderland declined to comment on the allegations that the park had been neglected. Cox says Wonderland also suffered because of its Eastern Creek location. "At a time when international tourists want to do Cape York to Melbourne in one day, Wonderland was too far out of Sydney," he says. The country's remaining theme parks of Dreamworld, Movie World and Sea World work because of their clustering on the Gold Coast. "Theme park junkies want more than one theme park experience in their holidays," Cox says. Theme park analyst David Barbuto, of JPI Consulting, says Wonderland had lost its identity and did not offer a sufficient menu of attractions to lock people into a four- to six-hour stay. It is critical to snare visitors for two meals because significant margins are sourced from food and beverage sales, he explains. Wonderland's lack of branding also meant the park could not harness valuable merchandising sales. Jamberoo bucks trend Author: By DAVID CRAWSHAW Date: 18/02/2004 Publication: Illawarra Mercury THE Illawarra's only theme park is proving more popular with visitors, despite Sydney's Wonderland closing its doors citing the impact of terrorism, SARS and Asian bird flu. Jim Eddy, who runs Jamberoo Recreation Park, does not buy Wonderland's argument and says business could not be better. Mr Eddy said yesterday his park had just registered its best summer holiday period, and visitor numbers were soaring. ``We had 91,000 visitors over December and January, compared to 81,500 last year and 79,600 the year before." Mr Eddy said the park was on track to exceeding 200,000 visitors this financial year - up from 170,000 in 2002-03 and 165,400 in 2001-02. Domestic tourism accounted for 96 per cent of the park's business, and 68 per cent of visitors were from Sydney. Mr Eddy expects Wonderland's closure to benefit his business, although he admits he is sad to see the icon go. ``I'm saddened by (the closure) because I don't like it to be happening to the industry," he said. ``We compete pretty hard with them so we expect to pick up (group bookings) ... Christmas parties, school excursions. ``But in the longer term it's going to have a negative impact on the industry. It takes another player out of the market." Wonderland's demise follows the closure of Old Sydney Town on the Central Coast and the Kinkuna Country Fun and Fauna Park at Lakes Entrance, Victoria. Mr Eddy said he believed development pressures, rather than hard times, had prompted Wonderland's closure. The 100ha site in western Sydney was worth about $100million, and its owners could make more money from subdividing the site than they could from a theme park, he said. ``I don't understand (Wonderland) suggesting SARS is to blame. The land value has put the viability of the site for development way ahead of it being used as a theme park." He said Merimbula's Magic Mountain attraction was also considering subdividing parts of its land for residential development. A Magic Mountain spokesman said all options were being explored, but for now the centre was still trading as a theme park. Symbio Wildlife Gardens owner John Radnidge said international tourism had fallen in the past few years but domestic tourism was up. The business had just invested $250,000 on a crocodile exhibit, he said. Crowd pleasers Jamberoo Recreation Park visitor numbers: 2002-03: 170,000 2001-02: 165,400 Summer holiday (Dec - Jan) figures: 2003-04: 91,000 2002-03: 81,500 2001-02: 79,600

[Daniel]

No sh*t!

[Richard]

Perhaps put more eloquently than Daniel, but yeah, there was really nothing there that is terribly new. Granted, it's the first time it's been published (what are the sources of the articles, by the way?), but I don't think it's something that can be seen as. The beauty of the SARS et al excuses is that they are actually quite true. Wonderland relied on I believe about 25% of its attendance from international guests. International guests aren't attracted to Australian theme parks by big thrill rides, they are attracted by uniqueness, diversity and in particular wildlife. There's not too many attractions you can add that will ultimately effect this demographic. This all comes from marketing pretty much. When the aforementioned "excuses" hit, this portion of the attendance did take a huge hit. Dreamworld did well to counter this with very well times thrill and family attractions. Warner Village have been a bit slow on the uptake (and some badly timed attractions and aquisitions targeting international guests didn't help), but they're pretty well back. The hit did come from SARS and whatnot, but only because of the lack of investment to make the difference with domestic guests as was appropriately done on the Gold Coast.

[GoGoBoy]

Richard - the source, author and date for each article are written underneath each of the bold headlines. I know there is not really any new info as such in the articles (as I said I was not expecting any of you to be surprised) but as you said Richard it is the first time this angle has been published, unfortunately. Also thought it was interesting to hear from Neil Balnaves and it pleases me that he is obviously well aware of the need for capital investment in a park

[joz]

Quite an interesting couple of articles, on many fronts and confrims what many of us have been saying about the theme park industry being overall, quite strong. Also interesting to read about Jamberoo and Magic Mountain - a great example of the difference between capital and no capital expenditure.