With 170 members now, the Indian Association of Amusement Parks and Industries (IAAPI), established in 1999, is a non-profitable organisation comprising operators, manufacturers, importers, traders, suppliers, distributors and other related industrialists from the amusement, leisure and entertainment industry, set up with the objective to promote, encourage, protect and safeguard the interests of the sector. In an extensive interaction, Arijit Sengupta, president of Iaapi and promoter of Nicco Park (40 acres) in Kolkata, tells Pradipta Mukherjee that with the growing demand of theme amusement parks in the country, the industry is expected to grow at 25 percent annually, pegged at Rs 1500 crore right now. Edited Excerpts:
What is the future of amusement parks in India?
The country currently has 150 amusement parks, employing at least 250 people per park directly. Another 10-15 parks are scheduled to be set up in the next financial year entailing an investment of over Rs 1,000 crore. Till 2000, investments into amusement parks used to be around Rs 25 crore. But now with the per capita income growing and maturity of the manufacturing industry, many amusement parks incur investments in excess of Rs 1,000 crore. The amusement park industry is expected to grow at 25 percent annually, pegged at Rs 1500 crore right now.
What will be Iaapi's agenda going forward to help develop the industry?
To develop the industry further, we have requested the government to extend some tax holidays to this sector. We pay very high entertainment tax, which varies from one park to the other between 10 percent and 25 percent. Nicco Park in Kolkata, for instance, pays 20 per cent tax on gate ticket sale, plus service tax of 12.36 per cent levied when the venue is given for parties, as well as 4-12 per cent tax on food sales, depending on the item and restaurant selling it. It is a huge capital intensive business. A bulk of the cost goes in land acquisition, plant and equipment.
Even the labour and maintenance costs are high, keeping in view the safety of the people. In other words, park operators work on thin margins, and the per annum running costs alone eat up 50 per cent of the gate collections with visitation varying with the seasonality of the business. Thus, to increase revenue, nearly all amusement parks in the country, since they have surplus land, also have a retail option. Nicco Park, for instance, had a retail option since inception.
It was franchised earlier but now for the past couple of years, we are running it by ourselves. The gate income vis-a-vis food, beverage and merchandising income falls in the ratio of 70:30 at Nicco Parks. However, even with these ratios and proper cost control, parks can survive satisfactorily wherever statutory tax burdens are not high.
With 170 members now, what will be Iaapi's agenda for its members?
Training is an important agenda for us. As of now, we slot 2500 man-hours of training per park per year, which we intend to increase to 5000 man-hours. Also, we intend to set up a library and 50-60 lecture sessions on the industry, safety measures and manufacturing.
Is Iaapi looking at promoting exports? How viable is it?
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Iaapi will also focus on increasing exports. Earlier the industry used to import lots of rides from foreign countries. But now the manufacturing companies here are producing majority of the rides and are also exporting it. Though it is still at the nascent stage, it has a huge potential to grow in the coming days. Also, manufacturing rides within the country provides economies of scale.
India can produce these rides at a competitive price than its foreign counterparts due to availability of cheap labour and relatively cheaper raw material. Export of these rides started about five years back and is picking up slowly now.