Taking the Fun out of German Theme Parks
June 30, 2005
According to Danish newspapers, the US Capital Investment Fond Blackstone will most likely take over the four "Legolands" in the Danish town of Billund, Germany's Günzburg, Windsor in England and Carlsbad, California. The cost of the takeover, which is expected this summer, is now estimated at around three billion Danish crowns (400 million euros, $483 million), which is significantly lower than the previously circulating estimates. Lego did not want to comment on the newspaper speculations.
The Lego family owner Kristiansen wants to preserve a minority interest in the parks which have brought losses of around 500 million crowns to his family business. Especially the three parks outside of Denmark turned out not to be unprofitable. Considering that the toys sales decreased by 7 percent in comparison with 2003, Lego now wants to concentrate on its core business with classical building blocks. Theme parks will have to be gotten rid of.
Disney: theme parks bring in the cash
The theme park world of the American media and entertainment Walt Disney company looks different: In the first six months of the business year 2004/2005, Disney had an increased number of visitors and hotel guests as well as higher revenues in its parks. In the second quarter, the company registered a revenue of $2.1 billion, a 26 percent increase. The operative profit rose by three percent to $193 million. Disney theme parks recovered successfully from the business crisis after the terrorist attacks of Sept. 11, 2001.
Instead of resorting to cutbacks or selling, Disney is actually planning new developments: In Sept. 2005, Disney will open a new theme park in Hong Kong. The company is also hoping for strong impulses from its 50 year anniversary.
Theme park instead of vacation
The unfavorable economic situation in Germany and in Europe does not bode well for a potential theme park boom here. But Ulrich Müller-Oltay, president of the Association of German Theme Parks and Leisure Industries, said he does not believe that the parks are in danger. They are affected by two main developments.
"On the one hand, it's the somewhat difficult economic situation," Müller-Oltay said. "Naturally, the five million unemployed drop out immediately as visitors."
Consumers are also generally restrained due to political and economic insecurity, Müller-Oltay said.
On the other hand, many people have to give up their vacations or trips abroad and choose instead to enjoy a day in a theme park. The cost level in Germany is still low, when compared to England, for example.
New attractions for more money out of pocket
It is, nonetheless, not so easy to attract visitors to the theme parks in Germany and Europe: Families are very concerned about money when it comes to leisure activities. According to Alain Trouve, theme parks manager for the French corporation Grevin & Cie in Germany's Sauerland region, this is true not only for the Germans, but also for the Dutch and the French.
Grevin owns six theme parks in France, the Netherlands, Great Britain and Germany, including "Fun Fortress" and "Panorama Park" in Sauerland.
To attract more visitors, the company has invested into two additional fun rides. Trouve said he believes that visitors will be willing to pay if they see that they are being offered special attractions.
Theme park policies in Germany
Considering theme parks as important employment providers, the German CDU/CSU parliament members recently raised the issue of theme parks in the parliament. In contrast with international developments over the last few years, German theme parks have seen no increase in numbers of visitors and overall revenues, and have faced stiff competition from neighboring European countries. Subsidized or tax-privileged competition makes life difficult for them.
The German government was asked to provide information about the total number of jobs that could be secured by theme parks, and the ways in which it intended to improve the competitiveness and locate the places of unfair competition, for example in the EU. There has been no answer to this day: The government postponed its answer deadline to November due to the complexity of the situation and the involvement of EU issues.