The spread of the Omicron variant of the coronavirus wave and the rising number of Covid-19 cases in the country are once again spelling trouble for theme parks as state governments impose fresh curbs, hurting a recovery that had started after they reopened in late October.
Wonderla Holidays, which operates one of the biggest theme parks in the country, will close its Bengaluru centre for two weekends after the Karnataka government imposed a weekend curfew, the company said in an exchange filing on January 8.
The Maharashtra government said on January 10 that entertainment parks, zoos, museums and all other tourist places will be closed. As a result, Imagicaa, another top theme park company based in Maharashtra, said its theme park and water park will be shut temporarily.
“Weekends contribute 25 percent to overall footfalls,” Arun K Chittilappilly, managing director of Wonderla Holidays, told Moneycontrol. He added that the Bengaluru park accounts for 25-40 percent of Wonderla’s total revenue. The company also operates parks in Hyderabad and Kochi, which remain open.
Wonderla Holidays reported a net loss of Rs 9.28 crore in the quarter ended September compared with a net loss of Rs 15.8 crore a year earlier. The company’s shares have fallen more than 20 percent from their 52-week high of Rs 269.90 on July 6.
Dhimant Bakshi, CEO of Imagicaaworld Entertainment, said the shutdown of the theme park has impeded the weekly footfall momentum since it reopened at the end of October. Theme and amusement parks have been subjected to closures for the third time, he said.
“A theme park like ours is capital expenditure-intensive and the continual opening and closure has financial, operational and manpower implications associated with it,” said Bakshi.
“The exercise to get the park up and running in a seamless manner entails massive efforts each time, which results in mobilising a higher proportion of expenses towards operational upkeep and maintenance. Higher expenditure will offset the business profitability, thereby leading to slower recovery.”
The company incurred a net loss of Rs 153.66 crore during the first half of FY22.
Recovery was in sight
After shutting twice during the previous two pandemic waves, both Wonderla and Imagicaa had started seeing a recovery in footfalls.
Satheesh Seshadri, CFO of Wonderla Holidays, said on a call with investors that its Bengaluru and Hyderabad parks drew higher footfalls than pre-Covid levels in the second quarter of FY22.
Chittilappilly had pointed out that Wonderla recorded 150,000 visitors during Q2 of FY22. While he expects a good third quarter in terms of business and footfalls, he added that the emergence of the Omicron variant towards the end of the quarter did affect business.
Imagicaa, which reopened in October end, saw good traction in weekly footfalls, noted Bakshi.
“The organic intent to visit (the theme park) was strong. In Q3 (FY22), we achieved almost 60 percent of footfalls from both parks (theme and water) together. The period from Christmas to New Year was especially promising, which provided us hope that the trend will continue into the New Year and sustain for the (fourth) quarter,” he said.
Concurring with Bakshi, Chittilappilly said people are still willing to visit the parks and stay there.
“While we don’t know how the situation will pan out in terms of rising Covid cases, as of now, people are not so scared. Monday to Friday everything is open, so it is the restriction that is impacting (sentiment and business),” he added.