Volume 1, No. 18. October 5, 2001
[Photo of Terra Mitica's Miguel Navarro and Luis Esteban with Paramount Park's Jane Cooper and Johnny Taylor.]
Paramount's world view
Paramount Parks has been itching
to get into the European market for awhile, but the Viacom company did not want
to dive into an economic quagmire in the process. When Paramount Park's CEO
Jane Cooper finally sealed the deal Tuesday to take over management of Terra
Mitica in Benidorm, Spain, after a summer of negotiations, Paramount Parks immediately
made itself a major player in Europe while apparently protecting its own financial
footing.
Terra Mitica opened July 31, 2000, to immediate accolades as one of the most
beautiful amusement parks in the world. Costing about 70 billion pesetas (US$360
million) to build and extensively themed in minutia detail depicting the five
classical civilizations of the Mediterranean, the 245-acre park sits on a mountainside
above the seaside resort city of Benidorm. Though it drew almost 3 million guests
in its first year, Terra Mitica still performed below its potential, and while
it has a couple of good rides, the product seemed to be underperforming from
an operational standpoint, too.
"The park has a good reputation because it's gorgeous," said Lamberto Fresnillo,
the secretary of the Association of Spanish Parks and Attractions, of which
Terra Mitica is a member. "They have all the conditions to be one of the most
important parks in Spain and Europe: the product, the design, the rides, the
attractions, the site. But, of course, you need to operate it very well." Paramount
Parks will take over security, sales and marketing, maintenance, retail, restaurants,
human resources and training, Miguel Navarro, managing director of Terra Mitica,
said in a statement.
Paramount Parks officials would not reveal details of the management deal, but
according to Spanish newspapers the Valencian regional government, in addition
to paying Paramount an undetermined fee for operating the park, handed over
5 percent of its shares in the park for four years. If in those four years the
park turns a profit, Paramount Parks may extend the contract another four years
and increase its shares to 15 percent.
Under an experienced hand, the park should turn a profit. Aside from Spain's
40 million residents, including a huge middle class, the country draws 42 million
tourists every year, and Benidorm is a hot spot especially for British, German
and Northern European holidaymakers. "It has everything that is necessary for
a theme park to succeed; at least on paper," Fresnillo said: "Site, sun, infrastructure,
airport, you can operate 11 months a year, tourists. It's amazing there. The
destination right now is not the park, it's Benidorm." The challenge for Paramount
Parks is to tap into that market more thoroughly than Terra Mitica had done
in its inaugural year. "This is a personal opinion, but to be able to sell the
tickets they have to be able to sell the park to tourists, whether at the destination
or as part of a tour package," Fresnillo said.
Which is precisely why Paramount Parks picked such a gem to make its entree
into Europe: though located in Spain, Terra Mitica could easily draw from as
far away as Scandinavia. If the park's ride package and operations ever equaled
its theming, Terra Mitica could be the world's benchmark theme park.
Meanwhile, Europe is getting yet another American operator in its amusement
park market. "I don't think there is happiness or unhappiness," Fresnillo said
of Spain getting its third U.S. operator, with Universal's ownership of Port
Aventura in Tarragona and Six Flags opening a Warner Brothers Movie World near
Madrid next spring. "I have to say the general impression is that it's good
news that some expert is coming here. (Paramount Parks) is a well-known operator,
and I think people expect success."