Do you want to start a theme park and want to know the cost? If YES, here is a cost breakdown for building an amusement park and the profit margin / ROI. Amusement or theme parks feature rides, games, and entertainment options in an outdoor or indoor venue. Customers typically pay a single entry fee for access to the entire park.
A successful amusement park model focuses on the customer’s entire experience, providing a wide range of services and entertainment options including parking, trams, restaurant options, water parks, roller coasters, live animal attractions, stage shows, arcade games, attractive interactive landscaping, and family friendly fun.
Meanwhile, the bigger the property you own, the more entertainment choices you are able to offer your customers. Your customer base will depend largely on the theme of your park. Some parks focus solely on family friendly entertainment, others work best for teens and young adults, and real – life adventure parks like zip – lines, go – carts, and mixed athletic challenges can target adults.
Cost Breakdown for Building an Amusement Park or Theme Park
Even if you decide to open a 5,000 square foot indoor facility that offers entertainment like bounce houses, arcade games, and pizza, expect a significant investment of at least $250,000 for the building, design, and installation.
If you are seeking to open a major amusement park featuring roller coasters, water parks, and live entertainment, you may be looking for investors interested in a multi – million dollar opportunity. For most amusement parks, there are many different costs.
First, there is the cost of research and development. Although this cost is very hard to predict, especially since rides and attractions can go through a research and development process without getting constructed.
For instance, Disney has WDI, with sole responsibility to brainstorm ideas for attractions, and they visualize and propose many attractions every year that never get off of the drawing board. However, at some other parks, the park comes up with one idea and runs with it from beginning to end.
The costs for research and development can be high, but often hidden when discussing bottom line financials. After that, there is the basic cost of the ride system.
Be it is a roller coaster, dark ride, or flat ride, a park most likely need to pay a manufacturer for a ride system. Note that the cost is usually the largest cost of the attraction, and very few parks are able to avoid this cost by creating in-house ride systems.
Your average roller coaster can cost anywhere from $1 million to $25 million for just the coaster. Many of the more complicated dark ride systems can cost up to $20 – $30 million, or even more. The key areas where the start-up capital will be spent on are;
- Total fee for registering business and handling other legalities in the United States of America – $2,000
- Zonal licenses and permits – $30,000
- Cost of hiring several business consultants – $500,000
- Insurance policy (workers’ compensation, general liability, property and equipment liability) – $1,000,000
- Operational costs for the first one year (employee salaries, utility payments and other running costs) – $5,000,000
- Cost of leasing land for amusement park – $5,000,000
- Cost of acquiring and installing equipment and machineries – $40,000,000
- Cost of building several facilities – $10,000,000
- Cost of equipping each building with necessary gadgets – $3,000,000
- Other start up expenses (installations of phones, computers, printers, security cameras and furniture) – $2,000,000
- Cost of store facilities (ventilation, shelves, cleaning supplies) – $1,000,000
- Marketing expenses (promotion for grand opening as well as marketing for the first one year) – $2,000,000
- Cost of building and launching an official website – $20,000
- Cost of start-up inventory – $3,000,000
- Cost of hosting launch party – $1,000,000
- Miscellaneous – $500,000
Next will be the cost for creating a unique theme. There are parks that barely invest here, while other parks go overboard, so this cost can also vary greatly depending on your vision and plans for the park. In some cases, the theme creation of a park can be as expensive as the ride system, and sometimes is actually a part of the ride system.
You will also have to spend on insuring your amusement park and maintenance and operation of the park, which is a cost that is very difficult to determine. Parks usually have maintenance and operational budget for the entire park, and to determine what it would cost to just operate and maintain a single attraction could be very difficult.
When considering the cost of building an amusement park, there are few or inadequate data to come to a resounding conclusion. Sometimes, parks throw out fallible numbers in a press release either before construction begins, or soon after the attraction is completed. The cost of an attraction can also be offset by sponsorships.
Rumour has it that Mission Space cost almost $200 million to develop and construct, but because of the sponsorship with HP, the bottom line cost to Disney was probably half that. There’s also the term e – ticket which is thrown around by the people who remember the days when Disney used to sell ticket books for attractions, and the e – tickets were the biggest, best attractions in the park.
Today, you can usually count on a Disney e – ticket attraction costing at least $100 million. Even a non – Disney attraction like Spiderman at Islands of Adventure was reported to cost between $50 and $100 million. To say exactly how much it would cost to build a specific amusement park, though, can be difficult due to all of the variables involved in the process.
Factors That Influence the Cost of Building and Opening an Amusement Park
Knowledge of Business
The amusement park business isn’t a type of business to go into without conducting research, signing up for training, and being knowledgeable in certain industry key policies that affect the business. As such, you need to do your homework and due diligence so you can understand what you are getting into.
Your target audience
Nobody breaks even in business without first determining the target market they want to cater to. This would mean that you consider the demography of the people you want to serve and where they can be found. In some cases, this might require that you niche down in order to meet your target audience right in the middle.
Land and Location
The location, size, and proximity to major population centers dictate the cost of acquiring suitable land for an amusement park. High visibility areas that have people with high net worth often cost a premium, as such you need to determine where exactly you need to get land.
Design and Construction
The design and construction of the amusement park require a lot of details and work. Things like the rides, attractions, buildings, and infrastructure are major cost factors that must be determined from the very beginning. Other expenses to consider include; architectural and engineering services, ride manufacturers, construction materials, labor, and project management.
Rides and Attractions
The cost of rides and attractions is a significant portion of the overall budget. Therefore, be sure that you have enough funds that will cover these important expenses.
Different types of rides, such as roller coasters, water rides, and themed attractions, vary in price, however, the good thing is that you can research these prices ahead of purchasing them. In making these purchases, you have to consider ride complexity, size, manufacturer, and safety features that can impact costs.
Permits and Regulations
Yet another thing to dwell on as you look to build and open your amusement park is acquiring the necessary permits. You would also have to comply with safety and building regulations in order not to operate illegally. Other things that you may consider looking into under this section include; environmental assessments, safety inspections, and compliance with accessibility standards.
Infrastructure and Utilities
Another thing that you must get underway as you look to build an amusement park business is developing the necessary infrastructure, including roads, parking lots, walkways, landscaping, and utility systems (electricity, water, sewage). All of these do cost some money; however, the size of the park and the level of amenities will affect these expenses.
Theming and Décor
The overall appeal and ambiance of the amusement park depend on how well the environment is themed. The theming elements, landscaping, signage, lighting, audiovisual systems, and decorative features all require funds to be achieved. Be sure you have enough money to cover this budget.
Operations and Staffing
Your staff strength and the type of employees you hire will say a lot about the business. Operating costs which include employee salaries, training programs, uniforms, and benefits, are some of the things to be considered. Additionally, expenses related to ticketing systems, guest services, security, maintenance, and ongoing repairs and maintenance are ongoing expenses for the park.
Marketing and Advertising
If starting out and attracting the best clients is what is on your mind, then it is important that you promote the park strategically.
This would require a marketing budget through which your advert goals are adequately carried out. Some of the advertising costs to be incurred may include advertising campaigns, social media marketing, website development, print materials, media partnerships, and public relations efforts, amongst a host of others.
In building and running an amusement park, you have to consider some safety conditions. This is because maintaining a safe environment is paramount in an amusement park so that you don’t put your customers in harm’s way. Costs to be incurred include safety inspections, insurance premiums, emergency response systems, security measures, and liability coverage.
There are unforeseen circumstances and contingencies that have to be provided for. In the amusement park niche, miscellaneous expenses would include administrative costs, accounting and legal services, IT infrastructure, ticketing systems, food and beverage services, merchandise, guest amenities, and other operational requirements.
Seek Experts Advice
As you put all these measures in place, you should also consider seeking the views and counsel of experts and coaches who are able to guide you professionally. You can contact business analysts who have ample knowledge in your industry.
Also contact experienced professionals in the amusement park industry, such as ride manufacturers, contractors, architects, and financial advisors, who can provide valuable insights and help in assessing and forecasting the financial aspects of building and opening an amusement park.
Estimate All the Costs
You would also need to draft a comprehensive business plan. You may conduct a thorough feasibility study to estimate the cost of starting this business accurately. Crafting a business plan will help you to put everything in the right perspective.