Introduction
The aim of this paper is to present research analysis for what appears
to be an excellent investment opportunity – Aqua Park in Palić. Lake Palić is
situated 8 km from Subotica, in the northernmost part of Serbia, 10 km away
from the border with Hungary, and just 50 km from Romanian border. The main
approach to the lake is the highway E-75 (Horgoš – Novi Sad). The approach is simple both for
the visitors and catering. Near the lake, there is the attractive Palić Zoo,
the only one in Vojvodina, with 65 animal species including polar bears, lions
and elephants.
I believe that the best possible location for Aqua Park is near this
lake, for numerous reasons, which I will explain in this proposal.
The object I am
proposing is a pool complex, organized in the form of an open Aqua Park. The
open Aqua Park is to be built on construction land comprising the space of 3
hectares, or 30.000 m2. It is meant for water games and should
consist of 5 theme units (a pool with waves, a larger pool with toboggans, a
smaller pool with toboggans, a swimming pool and a children’s pool) as well as
necessary additional objects and resting places, such as open showers, sanitary
objects, catering facilities and paved and sand areas for sunbathing and
relaxation.
There shoul be also
a parking lot of roughly 600 vehicles capacity, spreading over the area of 12
000 m2, defined by the regulation plan of Subotica and located near the
entrance of the complex. The most modern equipment for this form of fun should
be installed, together with the new pool technology and water game devices.
Attractive architecture solutions must applied, as well as a modern design of
space, construction elements and equipment, high level of final processing and
a sophisticated management system.
Analysis of
supply and competition
As for the general supply of Aqua Parks, the existing Aqua Parks are
mainly complexes of swimming pools with accompanying content – food facilities,
restaurants and cafes, sports fields etc. of small capacity, open type, which
work only during summer time and whose visitors are mainly locals. On our
gravitational area (80 km) there is no open type Aqua Park. Also, on wider
gravitational area (160 km+), as well as the neighbor countries (Bosnia,
Croatia) there is no open type Aqua Park supply with the content presented in
the Palić Aqua Park. There are also open pools in surrounding cities but in
comparison with our open Aqua Park, they are of vanishingly small dimensions.
If our object would comprise the following content:
-
A pool
with waves 1060 m2
-
A pool
with toboggans, smaller 180 m2
-
A pool
with toboggans, larger 270 m2
-
A swimming
pool 1150 m2
-
A
children’s pool 980 m2
-
Catering
services
-
Open
showers
-
Sanitary
objects
-
Paved and
sandy areas for relaxation and sunbathing
it can be freely said that the open pools in cities mentioned above,
will not present competition, even as substitutes for our total catering
supply, which in addition to the swimming and children’s pools, will also
include various content exclusively meant for relaxation of different
categories of consumers/customers, starting from children of 3 to 12 years of
age, through teenagers, to adults and seniors.
Based on all above mentioned, it may be easily deduced that the current
supply of open-type Aqua Parks on this gravitational area is nonexistent. Aqua Parks of similar type exist in neighbor
countries (like Croatia) but they are too far away to be potential competition.
Besides, the future offer of open type Aqua Parks like the one I am proposing,
with various and rich content will also be limited, because their development and
running requires substantial financial investments.
Analysis of competition threat
There are no companies that can compete with their offer and content
with the services that will be provided for the consumers in our complex which
will consist of an open Aqua Park. Thus, the stressed distinctive competence,
as well as the thermal waters exploitation, which provides us with green and
cheap energy is our biggest and unreachable competitive advantage. The
construction land on which the Aqua Park is to be built is equipped with
complete infrastructure and is currently owned by “Zdravica” Company which will
be one of the founders of the new “Aqua World” Company, which will influence
the activities of current and future competition which would have to spare
significant financial resources for the purpose of purchasing land on which to
build the complex of similar design, purpose and dimensions, so that we can
freely say that the entrance barriers for competitions are substantial. If we
take into consideration the concessions for exploiting geothermal waters which
will be used for heating the pools and which have sources near our Open Aqua
Park, the realization of our project is clearly economically justified.
Market attractiveness analysis and sources of
competition advantages
No city that belongs to our gravitational area has an open-type Aqua
Park. Besides, an Open Aqua Park built on Palić will be clearly differentiated
in comparison with other objects of similar purpose, because it will offer
something new, something that other objects do not have.
Considering that you[1] have
a significant business experience in Serbia as well as abroad, it is a
guarantee that the marketing and management aspects will be wisely and
rigorously conducted. Involvement in investment of the open park is a special
indication of the marketing investment in order to acquire concurrent advantages,
i.e. to attract customers/consumers. In addition, the large parking space,
completeness of the supply assortment, relaxation options, and fun for children
and pleasant pastime for adults represents a significant competition advantage.
Considering that the Palić Open Aqua Park’s critical success factor is,
we take it, the transparent attractiveness of our offer for the consumers/customers,
a lot of attention must be dedicated to promoting the mentioned objects as a
place for pleasant and affordable vacation, fun and recreation.
The Palić Aqua Park should have the following content in order to enable
it to create a sustained concurrence advantage in a longer period of time:
- The open Aqua Park should be a fun place
during the entire summer season. In addition to the described pools, there
should be a vast choice of pastime, pleasure and relaxation types
manifested through the presence of all auxiliary facilities that such a
representative object implies. Also, the auxiliary objects (restaurants,
hotels, cafes) must be built so that the guests coming from nearby towns
and countries can be accommodated.
- The open Aqua Park should contain all the
objects necessary for providing services of that type, which will have a
synergetic effect on completing the unique offer from the aspect of total
concurrence advantage.
The aim is to transfer the epicenter of events connected with
recreation, relaxation and fun onto the location of our Aqua Park, not only
from the towns of the gravitational area, but wider area as well. The open Aqua
Park with all its content, will supply the customers with all sorts of services
like those in world famous Open Aqua Parks, e.g. Costa Caribe, Marineland,
Tropical Islands in Berlin etc.
Analysis of demand development in the following
period
In the following period, it can be expected that the demand for fun,
recreation, and relaxation and pastime services will rise. The customers are
experiencing an escalation of the life standard, as well as a change in the
consumer habits and preferences. Ever growing part of income is put aside for
various services – fun, recreation, relaxation, etc. Also, the tendency of the
service sector to grow is reflected in the growth of the demand for these services.
With the growth of various forms of vacation, fun and recreation, there will be
an increase of demand for additional services – tourist services, accommodation
services, food services etc, which will have positive implications on an
increased employment rate in Subotica, Palić and nearby towns, as well as an
increased employment rate in Serbia in general. (Our estimation was that around
1100 employees would be indirectly employed.)
Furthermore, considering that the services of the Aqua Park are meant
for the citizens of Serbia as well as nearby countries, we expect that the
tourist inflow will have positive implications on the inflow of foreign
currency as well.
Plan and sales opportunities
Conclusions about the sales options, i.e. profitability of the process
of service providing and sale of the additional products in the open Aqua Park,
were derived from a previously conducted detailed market analysis, i.e.
analysis of the basic determinants of demand, analysis of competition prices,
as well analysis of sales and success of the competition in the previous period
and today which is described in detail in the previous chapters. After
analyzing the supply and competition and subsequently projecting the demand
development in the following period, we created the plan and sales options.
The described competition advantages we possess (the location of the
open Aqua Park and the frequency of the road travel Horgoš-Novi Sad, the
investment into the Palić Aqua Park, the exploitation of geothermal waters, the
absence of direct competition in the surrounding region, the countries of
former Yugoslavia, and others, the great potential of the target market and
other previously mentioned advantages) helped us define the plan and
possibilities of sale.
Considering all the analyzed and above mentioned parameters, we came to
an assessment of the placement opportunities and the degree of capacity
utilization per exploitation year.
Economical – financial
analysis and estimation of the efficiency of investing in the Open Aqua Park on
lake Palić
With the initiative of the “Zdravica” Company, Subotica, one of the
founders of the new Aqua World Company, Subotica, an economical-financial
analysis and efficiency estimation was conducted for the open Aqua Park. The
basis for the analysis and the efficiency of investing is the content of the Aqua
Park, the scope and structure of investments, elements for income forming and
the expenses of the object. The applied methodology of the economical-financial
analysis and efficiency of investment estimation was based on common procedures
of surveying the investment efficiency (a methodology recommended and accepted
by banks, investment funds, state development funds etc.).
In the investment analysis we started from the total investment into the
basic and working capital, and when it comes to sources and financing
conditions, we started from personal
resources and financing based on credit. The basic indicators of
business have been quantified (total income, expenses, gain, money flow,
economy flow with and without financing expenses) based on which the relevant
indicators of investment efficiency (current net value of the object, intern
profitability rate, cost threshold, investment return limit etc). The analysis
comprised an examination of the object’s sensitivity to changes of relevant
starting measurements – total investments, total income and expenses.
Investing in fixed assets
For the realization of the project of building an open Aqua Park in
Palić, constant investment was planned adding up to 5 300 000€, in the
following amounts:
The scope and structure of investment in fixed assets
Description
Total investment
Land 2.4 million €
Buildings 400 000 €
Infrastructure 950 000€
Equipment 1 400 000€
Other 150 000 €
FIXED ASSETS 5 300 000 €
Projection of the total
income and business cost
Total income
Starting from the indicators of market research and empirical parameters
for existing Aqua Parks of a similar type in Europe, operating revenues was
projected based on potential sales, or the potential number of annual visits
and expected expenses per visitor. It was planned that the open Aqua Park stays
in function 5 months per year, but seasonal factors were also considered, the
factors which imply that the average annual time of active operation of the Aqua
Park should be 120 days. The possible number of visitors in the initial phase
of operation of the open Aqua Park was determined to be about 360 000, in the
following way:
|
|
Total number of days
|
Number of visitors in one day
|
Total annual number of visitors
|
|
Average annual operational time of the Aqua Park
|
120
|
3000
|
360000
|
|
In total
|
120
|
3000
|
360000
|
The possible number of visitors per year in the initial stage of
operation of the closed Aqua Park is determined to be about 500 000, in the
following way:
|
|
Total inhabitants
|
Visitors participating
|
Number of visitors
|
|
Number of inhabitants within 80 km
|
1 852 000
|
11%
|
203 720
|
|
Number of inhabitants within 180km
|
2 762 717
|
5%
|
138 136
|
|
Number of inhabitants within 270km
|
2 225 722
|
1%
|
22 257
|
|
In total
|
6 840 439
|
7.35%
|
364 113
|
In the following years of the open Aqua Park operation (considering
factors of season and capacity) about the same annual number of visitors is
sustained – about 360 000 as shown below:
|
Projection year
|
Number of visitors
|
|
1
|
360 000
|
|
2
|
360 000
|
|
3
|
360 000
|
|
4
|
360 000
|
|
5
|
360 000
|
|
6
|
360 000
|
|
7
|
360 000
|
|
8+
|
360 000
|
Single expense per visitor of 11.5€, i.e. park income (without taxes) of
9.5€ has the following structure:
|
|
Daily expenses per visitor in euro’s
|
Daily income of the open Aqua Park per visitor in euro’s without taxes
|
|
Ticket
|
5
|
4.15
|
|
Food and drink
|
4
|
3.3
|
|
Purchase
|
2.5
|
2.05
|
|
In total
|
11.5
|
9.5
|
Based on everything explained above, a projection of the yearly income
of the open Aqua Park is:
|
Year
|
Annual number of visitors
|
Income per visitor in euro’s
|
Total annual income in euro’s
|
|
1
|
360 000
|
9.5
|
3 420 000
|
|
2
|
360 000
|
9.5
|
3 420 000
|
|
3
|
360 000
|
9.5
|
3 420 000
|
|
4
|
360 000
|
9.5
|
3 420 000
|
|
5
|
360 000
|
9.5
|
3 420 000
|
|
6
|
360 000
|
9.5
|
3 420 000
|
|
7
|
360 000
|
9.5
|
3 420 000
|
|
8+
|
360 000
|
9.5
|
3 420 000
|
Projection of business
expenses
- Direct material expenses are projected based on empirical parameters,
with the participation of 15% of total income.
-Production services include maintenance costs and publicity cost and
are projected based on empirical data – maintenance 10% and 5% of total
revenue.
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