Wonderla Holidays eyes expansion in smaller cities, cost-efficient growth
Arun K Chittilappilly, the company's Managing Director said the company will explore opportunities to set up new parks in Tier-2 cities on an asset light model, where they do not have to incur too much capex.
Wonderla Holidays, the largest chain of amusement parks in India, is now expanding in smaller cities to save costs, as building there is cheaper. This move by the famous amusement park company is to reach new markets where they can grow more efficiently, showing a flexible growth strategy in the leisure industry.
In an interview with CNBC-TV18, Arun K Chittilappilly, the Managing Director of Wonderla Holidays said, "In smaller cities, we are looking to replicate the Bhubaneswar model. For us, that makes a lot of sense because our capex can be much lower."
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Chittilappilly expects only marginal 3-5% growth in footfalls for the third quarter. The average revenue per user (ARPU) is ₹1,400.
The company will open its new park in Bhubaneswar in the summer of 2024. Chittilappilly said the reason for choosing Bhubaneshwar for the new park was the support from the Odisha government in terms of nominal land leasing rates and investment subsidy.
"This, for us, is kind of an asset-light model that we have not done before, wherein we do not invest in the land, and that keeps our capex low," Chittilappilly explained.
However, being a tier-2 city, the revenue from the park may not match the parks in other bigger cities, he noted.
The company is also in talks with the governments of Madhya Pradesh, Uttar Pradesh, and Punjab. Another park in Chennai is also currently under construction and is expected to come become operational in September 2025.
Wonderla shares have gained close to 138% year to date. The company, headquartered in Bidadi near Bengaluru, Karnataka, has a market capitalisation of around ₹4,746 crore.
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