“Investment Thrills” – A Worthwhile Investment?
Dr. Pieter C.M. Cornelis is a Dutch consultant, lecturer, book author, and expert on investments in the leisure industry sector, especially in amusement parks. His current book, Investment Thrills, deals with the latter, providing operators and park managers a handy guide with which factors relevant for amusement park investment planning can be identified and evaluated step by step. Based on methodology he developed, Cornelis explores whether a certain investment can make a positive influence on park attendance figures.
His popular-scientific book follows the current trend of evidence-based management, in which practical recommendations can be inferred from scientific findings. In this way, Cornelis, who has worked in various management and consulting functions at amusement and theme parks (including Efteling and Toverland in the Netherlands), is seeking to reduce the uncertainty surrounding investments in the amusement park sector as much as possible, thereby increasing the chances for a successful, lucrative investment. The author does concede that his deliberations can only be an approach to the topic and beg numerous further questions.
In his model, Cornels defines the return on investment (ROI), for example with a classic attraction, as the difference between the additional costs associated with the investment and the additional profits generated from it. While the investment costs, like amortisation, financing- and operating costs can be somewhat realistically predicted, the additional revenues – which to a large extent are generated through higher visitor counts – is very difficult to estimate in advance. Cornelis’ book is dedicated to the challenge of estimating as accurately as possible this potential increase in visitors prior to making the investment decision and despite an uncertain environment.
To do this, he places the ROI in the context of budget decisions – the question of the amount and the distribution over time of the planned investment. His model is supplemented with relevant context variables as well as design and content variables. Besides the classic context variables like climate or park image, which can be more or less influenced by the park, the growth potential of a park is a major variable on the success of an investment, according to Cornelis. On the other hand are the design and content variables. These include not only the design of the attraction with regard to type and quality, but also the theming and storytelling surrounding the attraction along with the guests’ “experience” of the content and design. Here, Cornelis connects the question of in his view determining factors within the amusement park sector with the actual effect of these content variables – he calls it the X-factor.
If a park operator enters their own benchmark data for prior investments into the overall model presented by Cornelis, then it can roughly estimate the isolated effects of a new investment on visitor numbers – the investment decision can thereby be made in advance notwithstanding a tolerable level of uncertainty. Cornelis’ model has already been applied successfully in practice, and it was used to predict with remarkable precision the visitor increase based on an investment made in Toverland.
Conclusion: Even if Pieter Cornelis cannot hide his scientific background in many places, his current book is still entertaining and written for practical application. The book can provide the reader with interesting food for thought and further advance their understanding of the relationship of the effect of an investment on the development of future visitor counts.
Pieter Cornelis: Investment Thrills: Managing Risk and Return for the Amusement Parks and Attractions Industry. Nieuwegein: NRIT Media 2017