Prepared remarks of Charlie Bray, President and CEO of the International Association of Amusement Parks and Attractions, at the International Executive Institute for the Attractions Industry Monday, June 30, 2008 at IAE Business School, Buenos Aires, Argentina.
Introduction – Thanks and Imagine
Thank you for that warm welcome, Marcelo, and good morning everyone. It is indeed a pleasure to be here at the International Executive Institute for the Attractions Industry as it takes place for the fourth time in Argentina.
Before I begin, I want to thank the staff here at the IAE Business School for all the preparation they have put into this year’s program, as well as for the expertise and challenges they have in store for you over the next few days.
I also want to commend and thank the Argentinean Association of Amusement Parks & Attractions, particularly Marcelo Periales, and the Latin American Association of Amusement Parks & Attractions for their gracious hospitality and for organizing such a great industry event.
Finally, I want to thank each of you for being here. Despite the various demands on your time, you have chosen to demonstrate your commitment to the Institute and the industry by engaging in the professional development and exploration that is so crucial to the continued growth of your career, your company, and the attractions industry overall.
To put this in perspective, I’d like you to imagine what your country would look and feel like if its attractions industry did not exist – if there were no amusement parks, zoos, family entertainment centers, museums, aquariums, or waterparks. Judging by the way a number of attractions throughout Latin America got their start – with a mix of public and private funds – and the larger social and economic role they continue to play, daily life in this region would be much different, and greatly diminished, by their absence.
The Value of Education and Networking
The world of amusement and attractions is often seen as purely enjoyable entertainment. But this simplistic view ignores the very serious and responsible business underlying it – a business that relies on learning, leadership, and innovation to maintain its collective strength. Time and again, close study has led to many of its greatest innovations, and that’s why your participation in the Institute this week is so vital.
I’m sure most of you didn’t think of it in such grand terms when you signed up for this program, but it truly is that important. The overall environment in which attractions operate is ever-changing, so professional development throughout the industry, particularly within its executive leadership, is the foundation for new thinking, continuous innovation, and further success.
Of course, learning isn’t just limited to handouts and PowerPoint slides. I’ve found that the relationship-building which occurs in programs like this is just as important as the classroom content. I encourage you to get to know each other in the next few days, share your experiences and challenges, and look upon one another as colleagues and resources rather than as competitors. The relationships you begin to build here, in the unique setting of this Institute, are ones you’ll be able to draw on and deepen in the future.
Consequently, IAAPA has made a wide-ranging educational commitment to its members and the entire industry through this Institute, the new Institute for Emerging Leaders, the numerous seminars at our three annual expos, and by offering many online resources.
And attractions professionals are responding – as shown by a record 7,000 attendees at the educational portion of last November’s IAAPA Attractions Expo in Orlando. But we need to do more, and the association will do so by adding further learning opportunities at our yearly expos, expanding the services offered by our European office, and utilizing our Global Alliance partnerships here and elsewhere to provide increased professional development worldwide.
This conference marks another step in that process of relationship-building. The aim of my remarks this morning is to provide an update on IAAPA’s activities and how they are evolving to serve the ever-changing needs of the attractions industry, particularly here in Latin America. I’ll then review the economic state of the industry in this region and the rest of the world, and conclude by discussing the role that constant innovation must play in our collective success.
Key Resources and Continued Partnership
Today’s IAAPA is growing and changing, which is only fitting, for it mirrors the industry we serve – one that is truly international, with attractions and suppliers located all over the globe. We represent more than 4,300 members, and strive to help them improve their safety, efficiency, and profitability, while maintaining the highest possible professional standards in the industry.
IAAPA’s membership grew again last year, rising four percent, including growth in Latin America of seven percent, making Latin America home to the second largest number of IAAPA member attractions, behind only the United States. Currently, more than 40 percent of our attractions are from outside the U.S. Let me take a few moments to highlight some of our latest programs and initiatives.
I mentioned earlier that, as the attractions industry keeps evolving, so does IAAPA, in order to remain a key resource for our members and partners in Latin America and around the world. One of the ways we’re doing that is via the Internet.
Our online presence at www.IAAPA.org is the most constant forum for communication and interaction with members. Last year, we completely redesigned our Web site, incorporating the content previously listed on separate sites for our expos and FUNWORLD magazine, and featuring on-demand translation into Spanish, Portuguese, and nine other languages.
These online enhancements also included a revamped and augmented Community area, to foster a stronger sense of connectivity and improved communication with IAAPA’s various demographic and geographic member constituencies. Each community page contains useful news, resources, links, and committee contributions. Like you, we are always exploring how we can better connect with our customers – a subject to which I’ll return later in my remarks.
We are also increasing our international initiatives in several ways, such as an expanded European office, with new staff and more services for the region, including government relations, communications, membership development, education, and the Euro Attractions Show.
We continue to expand our presence and role elsewhere in the world as well. One way we’re doing that is through our Global Alliances program.
As I noted a few moments ago, the association experienced a solid year of membership growth in 2007, and this achievement is due, in part, to the strengthening of our Global Alliance partnerships, which now include 15 offices around the world and allow us to effectively service 95 percent of IAAPA members in their own language and within their own geographic region. We now have strong and expanding alliances in 43 nations, including all countries in Latin America, countries throughout Europe, all Southeast Asia, and with China, India, Russia, Australia, and New Zealand.
Under Global Alliances, IAAPA is establishing cooperative partnerships with state, national, and regional industry groups around the world that are mutually beneficial, based on written and measurable business plans. This focus on localized service, and the direct feedback that results, permits us to better meet our members’ needs. We’re also exploring ways to take programs like our new Institute for Emerging Leaders, as well as conferences on safety and other pertinent topics, to various parts of the globe, in cooperation with Alliance partners wherever possible.
Some of this has already taken place – through Marcelo’s pioneering work with the Institute program here in Latin America and our recent safety conference in Dubai. On the horizon is an Institute for Emerging Leaders next year in Europe. The goal is to discover new ways to strengthen the autonomy and effectiveness of local associations for the overall benefit of our global industry, and we are always on the look-out to do more.
The Global Alliances we’ve established here, with ALAP and with the Brazilian Association of Amusement Parks, are great partnerships within the worldwide attractions industry. Both groups help the Latin American industry grow, and IAAPA is supporting their training and educational initiatives when asked to do so. In addition to this Institute program, these efforts have produced a pledge by ALAP and its affiliated national associations to adopt the ASTM International standards on ride safety following their planned translation into Spanish.
Our Trade Shows
All of these Global Alliances allow us to develop better products and services for the industry, and to better connect you with resources, customers, and partners across the world, including an increasing number who have cross-cultural experience and understanding. Our signatureevents for building such partnerships and connecting buyers with sellers are the three premier industry trade shows we offer:
- the Asian Attractions Expo, taking place this year at the Venetian Macao Resort Hotel, July 16th thru 18th
- the Euro Attractions Show, which is transitioning to a fall date and thus will hold a second show in 2008, this time in Munich, Germany, September 30th thru October 2nd
- and the IAAPA Attractions Expo, set for this year in Orlando, November 17th thru 21st.
These trade shows are market leaders and are truly can’t-miss events each year in the global attractions business, if you’re looking for the latest products and services in the world of entertainment and fun. Attendees also benefit from the diverse selection of educational seminars and facility tours, as well as from unsurpassed networking opportunities at various social events and on the show floor. Exhibiting manufacturers and suppliers from around the globe gain vital exposure to the world-class size, variety, and quality of buyers that are drawn to these three expos. In short, our shows are all about what’s next for the worldwide attractions industry, and I encourage you to attend as many of them as you can, starting with our U.S. trade show.
More than 1,000 industry professionals from Latin America attend this show every year, and I know some of you were with us for our impressive return to Orlando this past November, as IAAPA Attractions Expo 2007 drew 26,500 people from 98 nations to the Orange County Convention Center. We have worked hard in recent years to make it as accessible as possible for attendees from this region, by delivering more than 15 educational sessions with simultaneous Spanish translation, conducting two roundtable seminars in Spanish and Portuguese, holding a Latin American reception, providing an International Lounge, and selling Spanish-language versions of all our products at the IAAPA Bookstore.
And now we’re going bi-coastal. You may have heard the news that the IAAPA Attractions Expo will be heading to Las Vegas for the first time in 2009, as part of the association’s new, long-term plan for a two-city, East Coast/West Coast rotation of the event that provides easier access for our California and Asia markets.
In addition, our annual Summer Meeting will take place during Oktoberfest, from September 27th thru 29th in Munich Germany, just prior to the Euro Attractions Show. It is a smaller gathering of industry executives that is ideal for networking and relationship building.
In 2009, the Summer Meeting will be replaced by a new event called IAAPA Connections. This new event will take place in February and will combine the traditional networking opportunities from the Summer Meeting with executive-level learning opportunities. The first IAAPA Connections will take place February 24 to 26 at Atlantis resort on Paradise Island in the Bahamas.
I want to thank ALAP, ADIBRA, and all of you for supporting IAAPA, its expos, events, and the attractions industry as a whole. Our business today is integrated across borders in a manner that none of our predecessors could have imagined, with actions in one country often having an impact half a world away. A Growing Industry, Here and Beyond
This has never been truer than in the past few years, as the entire travel and tourism sector has encountered several major challenges, from the Iraq war to health scares to high fuel prices to security concerns. Yet, the fundamentals of the attractions business have remained strong and full of promise, as the number of people with both leisure time and discretionary income seems poised to continue rising globally in the future. Consequently, the World Travel & Tourism Council expects revenue growth worldwide of 4 percent annually over the next 10 years.
Within this expanding sector, the amusement and attractions segment is expected to contribute its own steady increase, fueled by expansion in nations throughout the Middle East, Asia, and elsewhere. Worldwide visitation was up again in 2007, and PricewaterhouseCoopers expects consumer spending on theme parks to rise by 5 percent annually through 2012 – resulting in a more than $30 billion industry. And that doesn’t even include other segments like waterparks and family entertainment centers!
I want to discuss the Latin American attractions market in detail in just a moment, but first let’s briefly survey the state of the industry in other regions.
Bolstered by a rise in yearly attendance to 168 million by 2012, attractions revenue in Europe, the Middle East, and Africa is slated to increase nearly 7 percent each year during that time, with much of that growth coming in the Middle East. In fact, the potential for more and more visitors to this region’s attractions is so great that, by 2012, it will drive the entire European – Middle Eastern – African area to a 22 percent share of the industry’s worldwide revenues. Construction of new facilities across the region, particularly in the United Arab Emirates and Eastern Europe, will provide the fresh experiences that lead to this expected rise in attendance and guest spending. These investments range from the Dubailand mega-project in Dubai to the World Gardens theme complex in Qatar to the Hotel Matamba at Phantasialand in Germany to a wave of new rides and attractions at numerous parks across Europe.
In the Asia Pacific region, a near 6 percent yearly growth rate over the next half-decade will push its share of the industry’s global revenues to more than $8 billion. Much of this regional growth will be driven by the continued rapid development of the amusement and leisure segment in China, which is predicted to expand nearly 7 percent a year through 2012. Over the next five years, a host of Asian projects financed by both local and overseas investors – such as the Fanta Wild Adventure park in China – are slated to be joined by a Universal Studios park in Singapore, MGM Studio World in Shanghai, and a Paramount Pictures-themed park in South Korea.
The U.S. attractions sector will increase its revenue by nearly 4 percent a year during this period, and will remain the world’s largest leisure market, worth $14.5 billion by 2012. Regular infusions of capital investment for new rides and water attractions will fuel both attendance and visitor spending, along with entire new facilities like Hard Rock Park in Myrtle Beach, SeaWorld Orlando’s Aquatica waterpark, and, in 2009, Schlitterbahn Vacation Village in Kansas City.
This potential for industry growth is readily apparent here in Latin America as well, with a market that is ripe for smart, steady investment. According to The Economist magazine, the region’s economies are doing better than at any time since the 1960s, with growth averaging over 5 percent a year since 2004 and generally low inflation.
Based on this foundation, the analysts at PricewaterhouseCoopers predict that rising disposable incomes across Latin America and new small-park offerings will lead to increased attendance and more consumer spending in the region’s attractions, resulting in overall revenue growth of nearly 5 percent annually in the next five years, to $328 million.
And over the longer term, PwC expects these improving economic conditions to combine with the region’s large population base and an influx of investment capital to produce even faster growth in the Latin American attractions market.
Consider the recent example of Colombia, whose last half-decade or so of relative security, economic prosperity, and political stability have resulted in an emerging middle class that’s being drawn in increasing numbers to its flagship outdoor amusement parks and a growing number of indoor family entertainment centers. This scenario can repeat itself throughout the region, but not without a great deal of vision and effort, following the ups and downs experienced by Latin American attractions over the last 10 or 12 years.
Nobody knows that better than Playcenter’s Marcelo Gutglas in Brazil. In talking withFUNWORLD magazine, he said “We are now at the beginning of a new era. … We are building a new platform so that we are more mature, more experienced, more professional … We must market our industry as a good option for families and start getting them used to going to parks regularly, as they do in Europe or the United States. … We are optimistic for the future, but a lot of work must be done.”
His optimism is well-placed, I believe, for you all are the future of the region’s industry, and each of you has made the commitment to be here, to further raise the level of professionalism Marcelo is talking about.
A second reason for optimism is his observation that “we in Brazil have all the right conditions for our industry. We have the demographics, we have good climate, and we are starting to have better income also.” I would argue, and I think Marcelo and all of you would agree, that these characteristics apply equally as well to many other nations in Latin America.
Consequently, you have the success of recent IAAPA award winners, like Xel Ha in Mexico, one of our Must-See Waterparks of 2006, and Argentina’s own Diversia in Córdoba, with its magical Neverland component and a Top FEC of the World in 2007.
This potential is also evident in the continued capital investment we see in the region, including Mexico’s first triple-looping coaster at La Feria de Chapultepec Magico and a new Side Winder at Wet ‘n Wild in Brazil, as well as the 50th installment of a Zamperla Disk’o ride this year at Parque de Diversiones in Costa Rica. IMAX has also signed a more than $40 million agreement to bring at least 35 of its digital projection systems to entertainment retail developments throughout Latin America over the next six years. This is on top of the three they are already installing in Chile and Venezuela, scheduled to open in mid-2009.
Such investment extends to the addition of entire venues, too, like the Dominican Republic’s Ocean World Adventure Park just a few years ago, Puerto Rico’s Coqui Water Park in February of this year, and Argentina’s latest Mundo Cartoon Network location in Córdoba, not to mention Divercity and Vertigo Park, both in Colombia, and Brazil’s Aventura Selvagem.
This steady growth is important, for perhaps nowhere else is the ultimate success of the attractions sector more essential than in Latin America, due to the larger socio-economic role it plays in certain cities and towns across the region. From the low income discount programs of Brazil’s Parque da Monica and Fantasilandia in Chile to the origins of Colombia’s Mundo Aventura and the IRTRA Resort in Guatemala as true civic enterprises, the relationship between an attraction and its local citizens often seems more central to everyday life in this region than in other parts of the globe.
As Rodrigo Villamil, general manager of Mundo Aventura, puts it about his park: “We in the amusement industry are like a motor for new growth, and our success can bring prosperity. … Mundo Aventura was the seed for entertainment development, so Bogotá could see what the industry could look like. Today, the area around the park’s main gate is a big commercial zone, and other private amusement parks have been developed elsewhere in the city. Everyone woke up. Bogotá is a different city. Mission accomplished.”
Clearly, then, the Latin American and worldwide amusement sectors are on the upswing. But understanding why is just as important as the figures themselves, for the answers contain the keys to continued success. I’d like to take a few minutes to explore some of the trends and developments that are driving our industry numbers upward.
Innovation – A Key to Our Continued Success
Earlier, I noted the revenue increases that are expected for our industry in the next few years. The key word here is “expected” – nothing is guaranteed. Like our predecessors in this great industry, we must recognize the challenges ahead, adapt to rapidly changing circumstances, and adopt solutions for the future.
One of the primary reasons for our ongoing worldwide expansion is creativity. The industry has always taken pride in offering the newest rides, games, experiences, and services to its guests. We all know that we must continually invest to keep our guest coming back year after year.
Just listen to Cecilia Chavez (Chah Vez), executive director for the Park of Ecological Attractions in Lima, Peru. She says: “In order to succeed in this industry, you must have real passion for what you do, and you must be willing to press forward, to be a permanent innovator.”
Such creativity is integral to providing guests with what some call perfect moments, and it’s this ability that sets our facilities apart from movies, sporting events, and the rest of the global entertainment industry.
The generation that is coming of age now is one that lives for these moments. Moreover, people in general feel they have less time to spend with the ones they love and are looking to share such moments together – ones they won’t find just sitting and watching TV in the same room or playing games on their computer.
We are an industry that is uniquely positioned to fill this fundamental need, for our facilities are more than just thrills. Instead, they offer all-encompassing escapes that create great memories – great moments – through a variety of experiential offerings and theming techniques.
With its emphasis on immersing the guest within the story and involving them through interactive features, theming allows rides to be more than just rides – they become unique adventures, frequently based on popular brands or classic stories. Recent regional examples of this are Mundo Aventura’s re-theming of a portion of the park using the most famous characters from the works of renowned Colombian poet Rafael Pombo, and the Binar-e-World attraction in Venezuela where guests journey inside the world’s largest computer.
Mexico has also pioneered one of the ultimate themed experiential offerings, with Kidzania. Using elaborate set decoration, each facility is set up as a functional mini-metropolis in which children role-play at being working adults. And the concept just keeps on growing in popularity, with sister sites opening in other countries, as kids can’t seem to get enough of experiences that truly surround them and make them feel as if they’ve escaped to a different place or time.
The key in each of these cases is the connection we’ve established with the guest. Mundo Cartoon Network, here in Buenos Aires, does this through interactive customer service. From animated ride operators to helping snap a family photo or add money to an on-site swipe card, an engaging guest experience is paramount to general manager Jorge Lago and his staff, for he knows that “our attention to visitors encourages participation and keeps them coming back.”
Another way to connect – particularly with the younger generation – is through text messaging, which is becoming increasingly widespread. A sign-up area on your Web site or at an on-site kiosk allows patrons to receive short in-park messages on their cell phone screens, alerting them to souvenir discounts, show times, and food specials.
Of course, the industry’s magic lies in connecting guests not only with our attractions, but also with each other. Parks and attractions often target a multi-generational demographic by increasing the number of options for patrons of all ages, but we need to ensure that this diversity includes plenty of things for families to do together. The more opportunities you provide where the whole family can connect and enjoy the same attraction – even if it’s for different reasons – the more likely you’ll provide that perfect moment for your guests through a wonderful shared experience. Using the latest technologies and theming advancements, manufacturers and parks are indeed increasing their family-friendly offerings, from the twists of S&S Worldwide’s new El Loco coaster to the virtual jump rope of Namco America’s Jumpin’ Jackpot game.
The current growth in waterparks is also benefitting from this emphasis on togetherness. To many industry experts, this seems only natural. According to Dan Martin of Economics Research Associates, “Waterparks are a great fit because of their broad appeal, offering such diverse experiences as spa facilities, ‘relaxing’ adventures like lazy rivers, more challenging activities like surfing wavepools and water coasters, and finally waterplay areas and wading pools for the youngest guests. In short, just about everyone likes to play in the water.” Some water rides are incorporating animatronics and special effects to produce exciting new attractions like Schlitterbahn’s Dragon’s Revenge and Splashtacular Entertainment’s Alien Abduction.
The industry is also increasing its guest appeal through the innovative use of choice – where the customer influences the outcome of an individual ride or their overall visit to an attraction.
Later today, visitors to the Magic Kingdom at Walt Disney World will be utilizing text messaging to get in on the act at the Monsters Inc. Laugh Floor attraction, as they’re invited to text their favorite jokes to the monsters for use during the show. Such choice and interactivity are definitely on the rise in our industry, as further evidenced by a new dark ride from ETF Ride Systems that lets guests pick their route from one of several different directions, as well as Zamperla’s new Magic Bikes, whose speed and height rely on each rider’s pedaling skills, and this year’s OdySea attraction at Lagoon Park in Utah whose interactive ride controls allow guests to determine how wet they get. Customer engagement is also integral to The Happeningat Busch Gardens Africa and other audience-participation shows introduced at many parks recently.
In addition, many attractions have increased consumer choice over the past several years by gradually extending their operating schedules with creative and fun celebrations during the off-peak seasons, focused on national holidays, cultural festivities, and other special occasions. This expansion also encompasses educational programs for students during the school year, such as those run by Playcenter in Brazil and the Temaikèn wildlife park just outside Buenos Aires. All this activity has opened a whole new revenue stream for attractions, by driving up annual attendance and by utilizing the facility’s capital assets over more of the entire year.
Closing – Creatively Meeting the Challenge, Together
It’s this type of creative thinking that has always made our industry proud of its ability to both initiate and incorporate change, and this innovative spirit lives on in every one of us. As Todd Nelson, president of indoor waterpark developer Kalahari Resorts, recently put it, “Everybody’s creating all the time. The industry is really young.” I hope that some of what I’ve said here today has similarly inspired you in this regard, for the future of our industry lies in your hands, as attractions must constantly re-invent themselves and the entertainment experiences they offer.
Each of you is clearly interested in helping the industry take that next step, as demonstrated by your attendance at this year’s Institute. But don’t let it end on Thursday. Take what you have learned together and drive it forward together, sharing challenges and opportunities as they arise.
Les agradezco su participación en el programa y el haberme invitado a estar aquí en Buenos Aires. Espero trabajar más de cerca con cada uno de ustedes en el futuro para el beneficio de sus negocio y de la industria, ya que aún hay mucho que lograr juntos. Muchas gracias!
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