Fuelled by the strength of the Indian economy, the Indian amusement park industry is growing at the rate of 25% pa and is set to double its size from present US$ 674 million over the next three years. Blooloop interviewed Rajen Shah, President of the Indian Association of Amusement Parks and Industries (IAAPI) to discuss the rise and rise of the Indian amusement park industry.
India’s economic strength
Investment bank Goldman Sachs predicts that India will overtake Italy, France and the UK to become the world’s fifth largest economy within a decade. The bank foresees that at the current rate of expansion the Indian economy will overtake that of the US and by 2050 will be second only to China. India has shifted into a higher gear, they believe, because of a highly educated, English-speaking population and a decade of reforms that have opened the country to greater competition, and spurred industries to become more efficient.
“India is at the epicenter of the flat world” says Michael J. Cannon-Brookes, VP for business development in India and China at IBM, about the reduction in barriers to doing business globally.
India is in an unusually advantageous position in the developing world in having balanced growth. Rather than an economy skewed towards exports like China, Indian GDP is already 64% private consumption. With a pool of 1.1 billion consumers there is a strong foundation for sustainable growth. This can only be good news for Indian amusement parks, Indian manufacturers and their business partners.
Active role expected of IAAPI members
With this rosy economic picture as a background the seventh annual IAAPI trade show in February, registered a 30% increase in exhibitors and a 100% increase in delegates. Clark Robinson, Executive Director, Global Alliance, IAAPA, says that increased visitors and the emergence of new rides will result in, “significant growth” in the Indian amusement park industry, ”and in a few years it will leap-frog and will be ranked on par with developed players.”
Mr Shah’s objectives for the industry in India include bringing global rides to India and promoting the industry both as a major player in the tourism industry and as social infrastructure. However, interestingly, Mr. Shah also sees that there are many ways in which the industry can serve the community as an “antidote” to the stresses of modern life, replacing “tension and worries” with “fun, enjoyment and happiness. “
“An Amusement Park is an active form of entertainment, ” says Mr. Shah, “unlike cinemas and circuses. In a nuclear family, when both the parents are working and there is less time for children and parents to bond. Amusement parks provide an opportunity to keep the family bonded for 6 to 8 hrs at a stretch, improving the relationships. In all aspects this industry’s role is only to help the community to live a better life. Amusement Parks not only cater to the family but they also increase the community bond.”
Mr Shah is evangelical about the Industry and the responsibility of IAAPI members to assist Industry growth. IAAPI member are expected to give up 2% of their time promoting Industry interests and raising awareness of IAAPI. Mr Shah says, “members who have the foresight and understanding that personal growth is linked with industry growth…give time to the Association and contribute to IAAPI”.
Great strides made by Indian manufacturers and amusement parks
Mr. Shah is the Managing Director of Arihant Industrial Corporation (AIC), which has evolved a full range of honing and super fining machines, and is also known for its playground equipment and water slides. From this viewpoint, Mr Shah told us that Indian manufacturers have made great strides in recent years. For smaller rides and waterslides, Indian companies have gained “global acceptance” with exports increasing. Indian manufacturers still find it hard to compete for the bigger, technically advance high thrill rides, but progress is being made.
Mr. Shah is in a unique position to have an overview of the whole Industry since AIC owns and operates the popular ‘Great Escapes Water Park’, Maharashtra. When asked to what extent Indian park owners would choose to source locally or import Mr. Shah explained that “as long as Indian Park operators are comfortable with the range available in India, the quality acceptable to them, and the rates within their budget, they will definitely source from India.”
However parks are getting bigger and customers have more disposable income and are demanding more technically advanced rides. These factors have driven an increase in entry fees from an average or around 5$ to $8 to 10$ today. With increased revenue and more savvy customers Indian park owners must source the bigger rides from abroad.
Getting involved in a bright future
Mr. Shah recommends that anyone wanting to be involved with the Indian Industry should, “devote sufficient time and resources on the selection of the right partner” and recommends partnering with “local companies who understand the law, procedure and have good contacts”. The IAAPI website and IAAPI’s Thriller publication and also good sources of information.
As far as import taxes are concerned Mr. Shah told us that, “there was a time where import taxes were very high but of late, they have come down to very reasonable level. Variation in local taxes has been taken care of by the Government with the introduction of VAT.” Information is available “from the Government website or through various tax consultants.” On land ownership, “there are no restrictions; there may be conditions.”
In the next five years Mr. Shah’s view is that sustained growth of the Indian economy will drive the Industry to, “grow both vertically & horizontally. Vertically, in terms of the scale of investment and horizontally across the length and the breadth of the country!” The greatest growth potential is the enormous amount of dormant/under-utilised land in India’s hinterland. Hotels and resorts are already showing interest in developing existing plots into anything form small play areas to full scale theme or water parks. Exciting times indeed.