Israel's Ministry of Tourism is seeking investors for a proposed theme park in the southern region of the country. Middle Eastern nations have been investing heavily in themed entertainment as they look to draw more tourists (and their money) to their countries, so I suppose it was only a matter of time before Israel would make a play, too.
A press release said that ministry officials want to attract 10 million visitors a year to Israel by 2030, and they see the proposed Negev Park as an important element in that push. Israel currently does not rank among the top 50 countries worldwide for international visitors, with the UAE leading Middle East nations with 16.7 million international visitors in 2019.
Top theme parks have proven their ability to draw millions of international visitors each year, but for every top park that opens its gates, countless other proposals result in abandoned plans or disappointing results. Press releases for these projects litter my in-box, but it's rare to see one backed by the government of a first-world nation, so this one caught my attention.
Until I saw the financial numbers attached.
Press materials and local news reports used the analogy, "Israel’s EuroDisney," which is in itself a red flag, since no consumer following this industry has called what is now known as Disneyland Paris "EuroDisney" in many years. But it was the project's reported budget - about US$14.5 million - that doomed it, in my eyes.
That amount of money will buy a developer a really nice roller coaster. Most fans need much more than a single big roller coaster to entice them to book a vacation, however. A better way to spend some of that $14.5 million would be to commission a well-researched, thoughtful, and detailed feasibility study that would tell officials and potential investors exactly how many visitors and how much income could be expected from a variety of themed entertainment and tourist-oriented development options in the southern region of the country.
For everyone else, though, based on years of covering and talking with leaders in this industry, here's my guide to what successful theme parks cost, assuming first-world construction and employment standards.
A seven-figure design and construction budget ($1 million to $9 million dollars) buys you a nice local attraction. If sharply targeted and well-designed, this can be a multi-attraction gate, such as a small water park, that serves a local audience, or it can add some heat to destination hotel resort, helping it stand out from the competition with marketable rides, shows, or environments that guests can enjoy during their stay. Otherwise, this budget is best spent to develop a ticketed attraction in an established tourist area, such as a really nice flying theater ride.
With eight figures (from $10 million to $99 million), you can develop a solid theme park with broad local appeal. Again, you need to be in, or near, a market that can support significant drive-in attendance, because almost no one is going to fly in for a project at this level - at least not initially. But if you spend in the higher range and give that money over to some talented designers, you could put together an attraction line-up that wins strong word-of-mouth and social media promotion, eventually winning the park significant regional appeal.
In either scenario, investing in ongoing operations by hiring attentive employees who provide excellent customer service and operational efficiency can amplify the value of an initial capital investment. But to do that, a project must have a budget to recruit, train, hire and retain those workers for at least two seasons, until cash flow from the project can support ongoing operational excellence.
At nine figures ($100 million to $999 million), you should get a well-developed regional theme park, with maybe a few attractions that win international acclaim. Such a park can include multiple world-class roller coasters, though likely not more than one attraction with the richly detailed animated show scenes and characters that fans have come to expect from the world's top theme parks. At the higher end, this budget should get you at least one themed, on-site hotel to help promote multi-day, out-of-market visits, too.
If you want to use the "D" word - Disney - as a standard for a proposed theme park, however, the price of admission to that level is now at least $1 billion. If a project cannot commit to a 10-figure budget, its backers need to get the D-word outta their mouths and their press materials. Otherwise, they simply set up fans, investors, and local supporters for disappointment when their collection of off-the-shelf carnival rides fails to attraction anywhere near the millions of visitors who go to parks like Disney to experience unique attractions that offer immersive environments, engaging storytelling, and time with familiar and beloved characters.
A billion-dollar budget provides no guarantee of success in the global travel market. But under-spending does guarantee failure in this highly competitive, capital-intensive business.
With the strong feasibility report, a project can command additional investment that allows for a budget to deliver the success its backers desire. If Negev Park moves forward with an additional zero - or two - appended to the reported budget published in Israeli media this month, then I will be curious to see how this proposal develops. But anyone who believes that an eight-figure budget can help drive millions of additional international visits a year is just doomed to disappointment.
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Excellent analysis, Robert. Too often, we're served the sizzle and not the steak.
This makes me think of the beloved theme parks that started decades ago as community gardens, a berry stand or a brewery.. Is that model still viable today, where a smaller existing attraction can grow in phases over time and eventually culminate in a world class theme park? Any recent examples from the last 10, or even 20 years?
9 to 10 figure budgets to just create a world class park at the start feels like a very high barrier to entry, especially considering the parks that failed with this model. We all want more theme parks, but is the industry too impatient and mesmerized by the high end earnings forecast of this 'go big' approach?
Apologies if this is a smidge off topic, but I do wonder..
Mmmmm....another thing to consider. Geopolitics. A theme Park in Israel sounds like ( and i say this with a heavy hearth since it not should not be an issue) like a target to Israel many enemies. The spending in security alone would be staggering, akin to tel aviv airport or a small armo base. As good as the israelites are in security, i would be concerned to invest there.
I don't think this theme park needs to pay into the state's security apparatus.
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Negev Park will be a small park with a wave pool. Here's more details along with a visualization of the park (Times of Israel website):
https://www.timesofisrael.com/plans-to-build-15m-amusement-park-hotel-complex-in-negev-move-forward/