The Kent theme park: could Paramount Pictures’ project work?

A £2bn budget, five years of construction, 27,000 new jobs, 800 acres of land and an anticipated 50,000 visitors per day – the developers of the Paramount Pictures entertainment resort are certainly not holding back on their plans for what has the potential to entirely transform the local landscape and economy… or be a colossal waste of time, energy and – fundamentally – money.

The developers at London Resort Company Holdings (LRCH) are doing everything in their power to convince locals that the outcome will be the former. The aim is to create a world-class entertainment resort to rival amusement-park titan Disney World, with a total of 50 attractions; including roller coasters all themed around famous Paramount hits, live music venues, cinemas, restaurants, and – last but not least – Europe’s largest indoor water park. All of this will be located on the Swanscombe Peninsula in north Kent, England, on the site of a former cement plant.

Just a short distance away from an international rail station, with 20-minute and two-hour connections to London and Paris respectively, the project is being touted as one of the most significant entertainment developments ever undertaken in Europe. The initial capital is being provided by LRCH owners, Kuwaiti European Holdings, who hold a 75 percent stake, while the remainder will come primarily from various private equity funds. But, contrary to popular belief, Paramount Pictures itself will not be involved in the project – aside from a licensing agreement allowing the use of a variety of its brands, with the BBC having also struck a similar deal.

While proceedings have been fairly slow off the mark, with the opening date already having been pushed back by two years, the biggest nod to the project’s progress so far came when landowner Lafarge Tarmac signed an agreement in January, giving it the go-ahead. There is still another stage of public consultations scheduled for spring 2015, which will permit stakeholders, industrial specialists and members of the local community to discuss aspects of the project. But ultimately, the park is – at present – expected to open its doors to the public in Easter 2020.

Across China a total of around 2,500 theme parks can be found, compared with just over 400 in the US

Elevated importance
The UK Government and local council are both in full support of the plan, with the former making it the first commercial venture in the UK to be awarded Nationally Significant Infrastructure Project (NSIP) status. And there are no prizes for guessing why such a venture has full government backing: “Truly successful theme parks generate a lot of tax revenue, jobs and growth for cities around the world”, says Josh Young, owner of the website Theme Park University. “Many times, governments will kick in extra revenue to provide the infrastructure (or part of it) needed to get the park open because they feel they will get it back in taxes once the park opens.”

Given that NSIP status permits the developers to entirely bypass local planning requirements, it has understandably provoked a backlash from many nearby residents, with the most pressing issue being the impact it will have on traffic in the area. In an attempt to counter this negative reaction, materials displayed at one of the project’s numerous consultation events outlined what the developers will be contributing to local infrastructure in return, with plans including a new slip road and fly-over exit route on the A2. Opening times will allegedly be managed so that they avoid peak travelling times, though general confidence in this claim (especially once you consider how it will fit with the project’s plans for maximum profitability) already appears low. At present, a 12 percent increase to daily A2 traffic is predicted, and while improvements to local public transport have also been promised, current plans are relatively vague.

The local council is optimistic, however: Mark Dance, Cabinet Member for Economic Development at Kent County Council, tells Business Destinations, “Not only will Kent benefit from the park’s location, but there will undoubtedly be extra trains on HS1 to support visitor numbers, benefiting the whole of the county. Alongside that will be the extra jobs created during the construction phase, and when it is up and running.”

Gravesham Council was heavily criticised in March 2014 when nine of its members were treated to a £15,000 transatlantic tour of three major US theme parks – Universal Studios, Disney World and Islands of Adventure – courtesy of the taxpayer. Their defence was that the cost of the trip will eventually be reimbursed by the project’s developers – though questions over whether all nine members were strictly required on the trip, and whether they had to go quite so far afield when Disneyland Paris resides virtually on their doorstep, remain unanswered.

But the best way of identifying how to move forward with the Paramount project is, of course, to look back. As the saying goes, history has a funny way of repeating itself – and, despite a never-ending plethora of past mistakes to learn from, the theme park industry is no exception.

Chasing the mouse
Take Nara Dreamland: a Japanese venture that opened in 1961, designed to be an exact replica of southern California’s Disneyland, right down to a nearly identical Main Street USA. At the height of its success during Japan’s post-WWII boom, the park enjoyed attendance numbers of 1.6 million per year – but by the early 2000s, that figure had dwindled to around 400,000. Things first started going downhill when Tokyo Disney opened its doors in 1983 – however, it was the opening of Universal Studios Japan, just 40km away in Osaka, that was the final nail in the coffin, and the lights on Nara’s Main Street went out for good in August 2006. It simply didn’t stand a chance against the bigger names with bigger budgets, having already become run-down long before its demise. And ultimately, even its highest attendance figures look rather pitiful when compared to the fact that, in its first year of operation, a mammoth 11 million visitors passed through the gates of Universal Studios Japan.

Considering this, simply bearing the Paramount Pictures name gives the Swanscombe Peninsula project a significant advantage over Legoland Windsor, Merlin Entertainment’s Thorpe Park and Chessington World of Adventures – the park’s main UK competitors, all of which also reside within an hour of London. “It has many things going for it – like the familiar brands of Paramount Pictures, which owns Star Trek among others, and the BBC, which gives them the rights to the likes of Doctor Who and Sherlock”, adds Young. “However, who’s to say that Doctor Who will be as popular in 2020 as it is now? It’s always a bit of a guessing game, considering you’re creating attractions so far in advance.” »

Blind enthusiasm
The amusement park industry in China has also spun out of control over the past 15 years. Across the country, a total of around 2,500 theme parks can be found (compared with just over 400 in the US); 70 percent of which lose money, 20 percent break even, and just the remaining 10 percent actually turn a profit. Many of these parks are state-owned, acting as a sort of goodwill gesture to the public, and function by charging lower admission prices and remaining open during the low season. Unsurprisingly, they usually don’t rake in the big bucks.

In the case of these failures, a sizeable portion of the blame lies at the feet of local governments, who overzealously encourage the sloppy construction of such theme parks. Former mayor of Shanghai, Zhu Rongji, hit the nail on the head when he asked in 2003, “Theme parks in China are popping up everywhere… Why are you doing this? We’ve got millions of farmers to feed, and all you want to do is build theme parks?” It would seem that while private operators, of course, place a heightened focus on profitability, many others suffer from inexperience and lack of planning.

Overshooting the market
But when things do go wrong, it can’t always be blamed on the competitiveness of the market. “In general, it is critical that new theme parks are sized to the markets being served”, says John Gerner, Managing Director of Leisure Business Advisors LLC. “It is much easier to expand if market demand is more-than-expected than it is to shrink.”

Young notes that, generally speaking, theme parks fail for the same reasons as most other businesses: poor judgements and bad decisions made with regards to marketing, pricing, location and branding, among other factors. “Theme parks fail due to lack of planning years in advance. Factors such as how to market properly, how easily accessible the location is to both locals and tourists, year-round weather conditions and many more all need to be taken into consideration.”

The Swanscombe Peninsula project is not the first Paramount Pictures venture that has trickled into the world of amusement parks: there were previously a total of five Paramount parks across North America, but these were all sold and eventually re-branded during a major company overhaul in 2006. In 2007, plans for an additional Paramount Park to be opened at the Dubailand complex in the UAE were announced – but since then no further developments have emerged, and it is widely assumed that the project has been abandoned.

A similar Paramount venture in Murcia, southeast Spain, has been in the works since 2010. However, aside from a stone-laying ceremony in 2012 and some small-scale work on nearby road infrastructure, little progress has been made – and with the opening date having already been pushed back from 2015 to 2017, naysayers have been given plenty of ammunition to work with. A small bout of optimism was then produced by the announcement of Corvera International Airport’s construction nearby – but similar problems have plagued this development, and together the two projects form a twin saga of sluggish progress and delayed completion dates.

The American dream
Considering Paramount’s history with theme parks, it would appear that the sceptics aren’t entirely out of line. Granted, the Swanscombe Peninsula project will certainly benefit from an advantageous location so close to the capital, but it only takes a swift glance across the English Channel to see how even that isn’t always enough. The potential for great success at Disneyland Paris was judged solely on the incredibly positive reception to Tokyo Disney, which continues to thrive to this day – but while the park is located just a 40-minute drive from the heart of Paris and possesses the supreme advantage of bearing the Disney brand, as it turned out, the French just didn’t buy into the American dream like the Japanese did. In addition to this (and an ongoing pricing struggle), a fundamental issue was that the government’s over-encouragement, based on the additional jobs and the economic activity that it would provide, essentially set the park up for failure. Disneyland Paris still welcomes visitors today, but after being plagued by years of financial woes and dwindling visitor levels, it is largely propped up by the continuing prosperity of its parent company.

And an over-enthusiastic government sounds somewhat familiar – the words ‘Nationally Significant Infrastructure Project’ spring to mind. And while the support of the state is important, it simply cannot represent the sentiment of potential paying customers. However, the Paramount Park’s collaboration with the BBC is important here – bringing together attractions based on both Hollywood blockbusters and long-time British favourites could be how the Paramount Park sidesteps another potentially negative European reception to American values.

With a grand opening scheduled to take place half a decade away at the very earliest, it’s simply not possible to know what kind of climate the park will be operating in. £2bn of investment and a status of elevated importance is all very well and good, but whether or not the project will be a smash hit or box office flop is a decision that ultimately lies with the public.