Summary

Amusement parks are an integral part of the global leisure and entertainment industry. The industry can be broadly categorised into amusement parks, theme parks and water parks. The sector can also be broadly segmented on the basis of the catchment area that they cater to, along with the type and scale of activities they offer. Global amusement parks can also be classified on the basis of the concepts and themes around which a park/ offering is designed such as thrill & adventure, sports & edutainment, amongst a few.

Globally, the amusement park industry has witnessed a resurgence in footfalls over the past few years. Demographics as well as the rapidly changing social and economic landscape are the key factors which are reshaping the demand for amusement parks around the world. The number of visitors at top global amusement and theme parks, region-wise, indicates that North America has the highest footfalls followed by the Asia- Pacific region and Europe Middle East and Africa (EMEA). However, the Asia-Pacific market has witnessed the highest growth rate in attendance (5 per cent) when compared to the North America and EMEA market which have reported an attendance growth rate of 2.2 per cent and 3 per cent respectively¹. The fact that Asia-Pacific region contributes 10 amusement parks to the list of top 25 worldwide highest attended amusement parks, demonstrates that the Asian market is continuing its growth pattern². With dearth of quality amusement parks in India, there is, at a macro level, tremendous headroom for growth in this sector.

The Indian amusement park sector which is valued at USD400 million (INR25 billion) is at a very nascent stage as compared to the USD25 billion (INR1,675 billion) global amusement park segment³. The sector presently is on a verge of transition in India, with various large investments proposed in the theme park sector both on Public Private Partnership (PPP) basis and by private players. A total of approximately INR297 billion is proposed to be invested in the Indian amusement park sector in the near future⁴. Industry experts believe that majority of the proposed investments are expected to follow the PPP model which would allow the private players the required support from the government in terms of land acquisition, incentives, taxes etc. for development of such large capital intensive projects⁵. The sector is making significant investments in technology as well to develop products/themes that significantly enhance customer experience and participation. For instance, augmented reality (AR) and virtual reality (VR) have become areas of significant interest and investment in the recent times.

However, the sector is facing numerous challenges in the present day scenario with inadequate government support being the primary challenge. With no incentive towards tax breaks, the biggest challenge lies with the double taxation of this sector with entertainment tax and the increased service tax. Other challenges such as inadequate basic infrastructure (power and water), lack of last mile connectivity, seasonality, lack of awareness about safety, land acquisition issues with unavailability of contiguous land parcels at affordable rates are the major deterrents towards the development in this sector.

Whilst there are some strong enablers such as rising income levels leading to increased discretionary spending power, increasing domestic and international tourism, rising urbanization and demographic advantage (higher percentage of working age group), the sector is estimated to register a Compounded Annual Growth Rate (CAGR) of 19 per cent over the next five years to reach at INR60 billion by 2020, thereby offering immense opportunities in this sector.⁶