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Price war hits revenue at Ardent attractions
A "discounting war" between Gold Coast theme park operators has been partly blamed for a drop in revenue from Ardent Leisure's Dreamworld, Whitewater World and SkyPoint attractions.
Reporting a drop in revenue of 11.2% in the first quarter of the financial year, Ardent Chief Executive Greg Shaw referred to a tough trading environment in which the company had to compete with cut-price entry passes from rival attractions operator Village Roadshow Theme Parks – operator of SeaWorld, Warner Bros. Movie World, Wet'n'Wild Water World, Paradise Country and the Australian Outback Spectacular.
Shaw also linked the strong Australian dollar and drop off in Gold Coast visitors during the period to the fall in revenue, telling The Gold Coast Bulletin "we always knew the first quarter would be a challenge."
However, Shaw is positive about the rest of the year and said the opening of SkyPoint Climb at Q1 by Christmas would be a huge boost to the business.
Dreamworld, which is approaching its 30th anniversary, also recently opened the Shockwave and BuzzSaw rides.
Shaw went on to highlight that we have seen a return to a more normalised pricing environment", suggesting that customer spending has recently risen by 10%.
Industry insiders have been questioning the wisdom of discounted entry charges and the cost of annual 'unlimited entry' passes for some time, suggesting that the Gold Coast theme parks are undervalueing the pricing of their product and reducing their ticketing income generation from return and repeat visitors.
At Dreamworld and White Water World, were a combined single day adult entry charge costs $89.99, an annual pass can be purchased for $119.99 (or $109.99 if purchased online). The respective costs for children and pensioners are $69.99 for a day's admission and $119.99 for an annual pass (again discounted to $109.99 if purchased online).
Similarly, Village Roadshow Theme Parks charge $79.99 for adult admission to Sea World and Movie (discounted to $71.99 for members registered through the MyFun website) and $59.99 for adult admission to Wet'n'Wild Water World (discounted to $53.99 for members).
Annual passes for adults, children and pensioner cost $99.99 for Sea World, Movie World and Wet'n'Wild individually (discounted to $89.99 for members), while an annual ‘VIP pass' for all three parks costs $109.99.
For a period prior to 31st July 2011, Village Roadshow went, further offering VIP Pass holders renewal at a cost of just $99.99.
With around a third of park visitors coming from the south east Queensland area, local park goers are more than likely to purchase annual passes, with the parks' ticketing yield being much reduced from return and repeat visitors.
In addition, sales of annual passes are seen to have contributed to crowding and traffic congestion for major events.
With the Ardent Leisure portfolio including Goodlife Health Clubs, fitness professionals within the Group may well attest to the perils of discounting and pre paid long term membership sales, management practices that were widely discredited in the fitness industry in the 1990s.
In addition, the recent arrival of Todd Coates as the new Chief Executive of Ardent's Theme Parks division may also see an end to discounting at Dreamworld and White Water World.
During more that a decade with premium attraction BridgeClimb Sydney, Coates resolutely opposed any form of price discounting of the BridgeClimb Sydney product.
Meanwhile, Village Roadshow's desire for upfront payments may fuel ongoing industry rumours that the entertainment conglomerate is looking to follow its sale of the Sydney Attractions Group with the sale of its Gold Coast theme parks and attractions.
Performance in other divisions of the Ardent group this quarter saw the bowling division deliver total revenues of $30.90 million, an 0.6% increase on revenues of $30.71 million recorded in the prior corresponding period; Goodlife Health Clubs record total revenues of $25.65 million for the quarter, representing a 17.2% increase on revenues of $21.88 million recorded in the prior corresponding period; and d’Albora Marinas record total revenue of $5.19 million for the quarter, representing an increase of 2.2% on revenues of $5.08 million in the prior corresponding period.
Read Australasian Leisure Management Publisher Nigel Benton’s blog on this at www.ausleisure.blogspot.com.au
18th August 2011 - TODD COATES TO HEAD ARDENT LEISURE THEME PARKS DIVISION
8th July 2011 - DEMPSEY TO LEAVE ARDENT LEISURE GROUP
1st July 2010 - VILLAGE ROADSHOW THEME PARKS BRING BACK THE VIP PASS
2nd March 2010 - ARDENT LEISURE CONFIRMS GOLD COAST OPENINGS
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