As the attractions industry tries to return to normal in the wake of COVID-19, we look at some reasons for optimism in the Russian attractions market.
by Sergei Kalmykov, Enterto
It is becoming obvious that all attempts by the entertainment industry to return to a more or less usual course of work after COVID-19 restrictions have failed. For example, studies in the latter part of 2020 in the United States showed that over 75% of regular visitors to theme parks are not ready to return until the vaccine is adequately addressed.
The catastrophic collapse of demand, the forced decrease of capacity and the additional costs of implementing new hygiene measures have all lead to a further accumulation of losses by the largest parks in the world, following attempts to reopen in the new economic reality.
In Russia, to everyone who still cherishes the dream that all will return back to normal, I can safely say that nothing will return, it will never be habitual again.
COVID-19 and the Russian attractions industry
The COVID-19 crisis in the Russian attractions industry is aggravated by the fact that high-quality entertainment has just begun to appear in the country. The market is young and weak, and reacts extremely negatively to such global tectonic shifts.
For instance, four out of five amusement construction projects planned in Russia at the beginning of 2020 are frozen today for an undefined period. The brand new Dream Island park in Moscow, Europe’s biggest indoor theme park, was closed just one month after its grand opening. Later in the year, it reopened in the most difficult conditions.
The other huge entertainment project in the heart of Moscow, which my team has been working hard on for two years, is The City Of The Future all-season theme park. This venture had no chance even to welcome its first guests, instead going into a foggy waiting mode.
Sochi Park in South Russia looked to be the most successful of Russia’s attractions following the COVID-19 pandemic. Despite the late start of the season, a super-powerful quarantine tourist flow (due to closed borders) allowed it to welcome 10,000- 12,000 guests a day during the Summer season. In fact, this is a normal target for this park.
Is there hope for the future?
Does this mean that massive offline entertainment (amusement parks, concerts, sports events), in general, is irrevocably losing its position? Of course not. People still want live emotions. Those goosebumps of joy when you scan your ticket at the entrance to a theme park, in anticipation of a bright and unforgettable day of adventure ahead.
They want the real wind in their face on a rollercoaster’s loop. They want the simple joys of an ice cream accompanied by fireworks. Even the highest quality streams and virtual events will never replace the real voices of the likes of Lady Gaga or Mick Jagger, flying away to the starry sky right over your head.
The fact is, the essence of entertainment is to get together to experience impressions and share them with each other. This is one people’s most basic inner needs. It is not related to technology, time and a sudden future.
The price of entertainment after COVID
What will definitely change radically is the price that will have to be paid for real entertainment. In the Russian attractions market, as in the rest of the post-COVID-19 world, guests will have to fork out more and more for these live experiences.
However, at the same time, there is alow growing unemployment and a significant decrease in the purchasing power of the population. This means that offline entertainment will not be available to everyone. Most affordable entertainment products will completely move into the digital space, keeping the bulk of families at home.
Thus, the audience will be divided. The wealthier part of the public will certainly allow event organizers and owners of amusement parks to breathe normally. And the less wealthy people will have safe and controlled fun at home with their gadgets.
This section of the public will also make it possible to confidently look to the future for digital content developers and distributors. This is going to be one of the biggest markets in Russia.
At the same time, the number of players in the offline entertainment market will significantly decrease. This is because the wealthy public will impose incomparably higher requirements for the quality of entertainment. Therefore the flow of such guests will narrow significantly.
Most additional services related to the entertainment business will also go to digital. For instance, tickets, queues, parking, photography services, guides and so on.
In the direction of digital services, there is a lot of room for entertainment market professionals to grow. And it is that niche that needs more private companies, innovations and startups from all over the world.
Areas of growth in the Russian attractions market after COVID
One more niche area for growth in the Russian attractions industry post-COVID lies in the entertainment content for dying malls.
The pandemic finally opened the eyes of everyone, especially the owners of megamalls, to the fact that their business of leasing rental space at cosmic prices to tenant-shops no longer exists, despite all attempts to stick to the traditional model.
Some shopping centres are still functioning thanks to weekend visitors from the suburbs. But even this stream will soon be over. People are no longer likely to go to the mall just to shop. Online shopping is much more convenient these days for all groups of goods, from food to sports equipment and more.
Take the entire process of buying a Tesla car for instance. From choosing an individual configuration to receiving a finished car in the parking lot, everything carried out in a mobile application. There isn’t a single moment of physical contact with other people.
The only reason people will continue to go to offline stores is to enjoy a unique experience, including a shared experience with other buyers, which no gadget can provide. And this experience lies at the junction of the ideology of the brand itself. This hybrid reality, gamification and entertainment content is different from what you can get just from sitting at home with a VR headset.
Global brands are now working to create these experiences for their customers. This format is likely to replace existing stores in the medium term.
To see the scale, look at the example of the virtual fitting room market. This is already gaining momentum around the world. By 2024, according to the most conservative estimates, it will reach $7.6 billion. This is an annual growth rate of 20%.
As well as shopping centres, this trend for entertainment experiences will also actively penetrate into sports events and tourism products. This opens up new horizons for the development of the attractions industry in Russia post-COVID-19. It will certainly instil optimism in those stakeholders who are ready to turn their usual way of thinking upside down, radically and rapidly. Like a good old rollercoaster.