News that MGM is in talks to build a $100m, 70-acre theme park in India, in partnership with Mumbai-based Lavasa Corporation, will further confirm India’s status as one of the next emerging markets for the global attractions industry.
The new attraction will open in 2014 and is the second for the city: a Spaceworld theme park is already under construction down the road – in partnership with Belgium-based Spaceworld International – with an opening scheduled for 2012.
Opportunities in India are attracting the attention of international investors and operators, where even a decade ago such a thing would have been unthinkable, because in spite of ongoing issues with wobbly infrastructure, the middle class in India has grown to the extent that it’s seen as offering a serious business opportunity.
This group already represents 30 per cent of the 1.2bn population and McKinsey forecasts that India’s middle class will reach the half billion mark over the next 20 years, saying this ‘unique period in India’s evolution’ will see total consumption in the country quadrupling, making India the fifth largest consumer market in the world by 2025.
For many years, large-scale theme park developments couldn’t be built, because government taxes on imported steel made the market for the infrastructure unviable – vendors of rollercoasters just couldn’t compete, for example. As a result, India’s attractions were typically local, low-rise in style and with a focus on themeing and soft landscaping. However, changes in government policy have eased these restrictions and the market has been opening up to change.
Although these new parks are being built primarily for the local market, India is also growing rapidly as a tourist destination; 5.37 million foreign tourists visited the country in 2008, up 57 per cent from 1996. It also remains an increasingly attractive destination for business travellers and affluent Indian expatriates.
As a result, future opportuities for the sector will include attracting inbound tourists, so the adoption of international brands such as MGM will be important drivers of business and we’re likely to see more of these kind of deals being done.
India already allows foreign-owned brokers to trade directly on the country’s exchanges, and a government panel has recommended the finance ministry make it easier for foreign retail investors – in particular, wealthy Indians settled overseas – to buy shares on Indian exchanges. Foreign investors will benefit from this change as they will directly participate in India’s growth, making investment an even more attractive proposition.
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