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Ariadne calls for $25 million in new attractions for Dreamworld

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Earlier this year Ardent Leisure wiped off nearly $100 million from the value of Dreamworldfollowing the closure of Thunder River Rapids after it claimed four lives.

Bloody media.. always beating up on Dreamworld! :rolleyes::rolleyes:

This seems very shortsighted tbh.. They should be injecting money into the business, but not by selling of land. That lands going to cost them a premium to buy back in the future when they need to expand. 

I would also be calling for not only an upfront cash injection for new attraction, but commitment from the board to a continued level of expenditure over say the next 3 - 5 years. It's all well and good to splash a bit of cash around now, but the park needs ongoing investment if its to succeed and return to profitability.

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I tend to agree. VRTP would be laughing at the idea that a one-off injection of $25 million could be considered a large investment over the medium to longer term, and also the idea that you have to sell something off to find the cash. DW has definitely had a long period of under investment with Ardent at the helm, as we have long recognised on these forums, and I appreciate that these guys have brought attention to that; but they will need more than $25 million to even compete with Rivals alone. And as the poster above mentioned, what about the following years?

Edited by GoGoBoy

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$35 million

$15 mllion coaster

$20 million dark ride (includes infrastructure and building construction costs)

that's a start... followed up with a other $10-12 million family coaster in 2 years. 

 

That's what they need to compete IMO 

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I think they need to invest a lot more. Ariadne are right, Ardent have under-invested in DW over the last 10 years. I mean when I look at what MovieWorld has bought online vs Dreamworld in that time period then it's pretty clear who has been pouring the money in and who hasn't. I really think DW need like 3 big new attractions to give them back that WOW factor, maybe make use of the lake in the centre of the park again. I think they should also focus on theming, the spruce up of old buildings etc, it all goes a long way in creating a great atmosphere.

 

 

Edited by Locke

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10 minutes ago, Locke said:

 I think they should also focus on theming, the spruce up of old buildings etc, it all goes a long way in creating a great atmosphere.

This is a big point. Everytime i visit dreamworld I always think "Wheres the dream part?" All it is, is just a world at the moment. Thats the sad truth.

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They have been spending money on improving the look of buildings. The only real area that money hasn't been spent on the look of building is the motocoaster cafe. Goldrush and Main Street have had recently had money spent on buildings. The only other building that hasn't been touched is the former Big Brother Cafe.

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13 hours ago, elemist said:

This seems very shortsighted tbh.. They should be injecting money into the business, but not by selling of land. That lands going to cost them a premium to buy back in the future when they need to expand.

Why not? the government sells off assets when it needs cash...? :P

Seriously though - some of the land Dreamworld sits on will NEVER be needed.

The park boundary (excluding carpark, but including the eucalyptus plantation) measures about 375,000sqm. As a comparison, the park with the most coasters in the world (SFMM) only occupies 558,000sqm give or take.

Dreamworld is very spread out. Ocean Parade aside, most other attractions are a lot further apart than they need to be and there is plenty of land that can be used within their existing footprint. Hell - the ENTIRE BLOCK that Knott's Berry Farm sits on is only 314,000sqm, and the includes the hotel, hotel parking lot, and all their back of house service areas. (it doesn't include the little part of Ghostrider that crosses Grand Ave though).

I CBF looking up the attendance figures, but i guarantee SFMM and Knotts have way more attendance than Dreamworld ever does. There are large swaths of land that Dreamworld can work with..

Excluding the current gold rush situation:

  • main street - a huge open expanse that really is dead for most of the day, except for those traversing it to get from gold rush \ rocky hollow to ocean parade. You could almost drop USS's Battlestar Galactica in that space.
  • Murrissippi + Island - this board has long discussed the merits of using the island for an attraction. it takes up a lot of vacant land in the park, and although in times of captain sturt it was useful, now it just takes up space.
  • Boneyard \ Old Thunderbolt site - still plenty of land here not only for a ride but an entirely new land (think of the DC\Superhero area at SFMM - plenty of flats ala Lasso of Truth etc

By the time they actually utilise all of these areas to the fullest (and fill in gaps left by TRRR, Wipeout when it eventually retires etc) some of their other rides will be reaching end of life and it will be time to remove and replace them.

They don't need more room inside their park boundary than they already have.

 

6 hours ago, bladex said:

they need to spend money on rides and attractions not buildings...

they need to do both. No sense having awesome rides if the shops and food outlets are subpar. What they've done to their outlets recently has been a sorely needed upgrade, but it shouldn't come at the expense of new attractions to drive attendance.

Edited by AlexB
Ocean Parade, not Ocean Park!

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I agree with you, but I also think that the way they've gone about it is slightly arse backwards.  The question is what does Dreamworld need to return to 'normal' trading.  Reality is a new coaster would probably be enough to put it on a better footing.  They aren't going to beat rivals on size, so something modest which takes the Australian record for most inversions in a year or so when Rivals is old news might well be enough to capture the public's attention.  There are options around the $15million mark that would do the job that Dreamworld needs it to do.  That sort of money isn't outrageous, particularly given the under investment the park has endured.  

 

So while I actually agree that the park doesn't NEED that land, I think selling off their future potential is short sighted.  The only advantage to it is it's less risky, but it still reeks of not wanting to properly invest in the park.  

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6 hours ago, AlexB said:

Why not? the government sells off assets when it needs cash...? :P

Seriously though - some of the land Dreamworld sits on will NEVER be needed.

I'm sure it probably won't be needed, but if it is they will of course pay a premium.

My issue is more they're selling off an asset thats currently giving the business value. A smaller land holding means reduced assets the business has and reduced value to the business as a whole. Reinvesting it into the park will go someways to improving the value of the park itself, but if they put it into immaterial/quickly depreciating things like renovating existing buildings (painting/fitout) and to an extent rides etc, then it's not going to realize anywhere near the value the land currently has.

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I'd agree that Dreamworld is a oversized park @AlexB. They could safely lose all their undeveloped land and still have loads of room to grow for decades to come with land within the traditional park boundaries that's either no longer used or has never been used.

The issue I have is that you really should expect bigger plans to remain competitive when their popularity and product offering is continually being dwarfed by competitors. We see Village Roadshow down the road using every remaining inch of land they have to build a tourist destination. They're catering to an incredibly vast segment of the market and everything about this plan is designed to create an all-inclusive holiday destination that keeps people on-site and away from competitors.

Those same charts that Ariadne uses to highlight Ardent Leisure's lack of investment and missed opportunity -- namely the year-on-year and projected growth of tourist visitation -- should be every reason not to sell off land for the paltry price of $1 million a hectare at a time when your current competitors are ramping up their offering and expanding well beyond the confines of the traditional theme park.

The amount of space Dreamworld have both within the park and surrounding it is their single biggest long-term strategic asset. $25 million for a theme park of this size and profitability isn't a one-off investment that you fund by extraordinary means, it should be what they're spending every few years on a robust mix of major and minor attractions.

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The possible future use of land is always something to consider, I wasn't saying that there's no reason NOT to sell it, I simply wanted to rebut the point that they will NEED that land to expand in the future.

Of course if they want to develop it into a precinct like the Movie World lot is currently doing, sure - but i can't see it happening.

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I think @Richard really nailed it, as did @AlexB in terms of land use currently.

Particularly with Clark Kirby now at the helm, there's a big whiff of the John Menzies era of Village parks again, where long term vision, investment and focus on guest experience, and look, let's be honest here, doing the right thing has trumped maximising shareholder return at the detriment of what the brand stands for.

And that's important, because with the right top level people having enough exerciseable power means money spent on things that may not realise a tangible or direct ROI are upheld. Think steam trains instead of diesel trains and you're in the right headspace. Sure, the diesel might be cheaper overall, but the steam trains create this intangible value to everyday guest experiences. The smell, the movement, the history, the immersion into a different world... these are all things that don't mean anything on a shareholder spreadsheet. However, something so intangible creates such a tremendously powerful impact on guest experience, and hey, let's not forget Dreamworld's brand was built on just this. Barbershop quarter didn't create a tangible ROI, but they were amazing. The horses clip-clopping through Main Street pulling a cart? The IMAX experience? The overload of shows & entertainment? All expensive, and all add up to being greater than the sum of the parts.

To be frank, i'm not about picking Ardent or Ariadne or any other parent company, and for all the junk Ardent has copped, let's not forget that for the period the park was closed they supported the Dreamworld team very, very well, so for me, so long as who-ever it is treats one of the country's most iconic brands with the respect it deserves and ultimately, invest in enriching the brand as much as Village are with their brands, i'm happy.

Buuuuuuuuut mayyyybe selling the land that's a link to the new Westfield shopping centre and the Coomera Train station isn't the wisest move. If I was as lucky as Clark Kirby and inherited a bunch of parks, except instead of Village it was Dreamworld, here's what i'd do:

  • Get on the phone to Westfield. Start the conversation about a long term vision of developing a Universal city walk of sorts between Coomera Train Station, the new Westfield and the Big Brother house.
  • Get onto the phone to who-ever has the Big Brother house land. Enroll them in the idea of the city walk.
  • Get on the phone to Hilton, Sheraton etc. etc. about building a hotel in the citywalk.
  • Get Dreamworld back to the 1980's vision John Longhurst had.
  • Update, rennovate & innovate the theming from Mine Ride through to Rocky Hollow and Blue Lagoon. New rides, attractions, bars, food, retail. Develop a new entrance where Blue Lagoon is. Build a new steam train station there too for citywalk guests. Make the space amazing again. Build an RMC. Click "select all" on the Zamperla family rides page and just make it a good space full of kinetic energy.
  • Quieten Tower of Terror. Make it work better. Remove most of the tunnel.
  • Move Motocoaster anywhere else. Don't care. Needs to be moved.
  • Develop ABC Kids World into something world class with the land that Motocoaster sat in. Tone down the fading pastels. Add more trees in, make it intimate. Add more food & bev. Make it a lovely area full of nice surprises.

I'd go on but I think i've droned on about plans elsewhere. Point is, Dreamworld's a global brand, let's treat it as such.

 

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Some great ideas Slick

some plans and documents I read many years ago when the Town Centre master plan was before council referenced an entertainment/restaurant  precinct opposite Westfield and between Foxwell Rd & a new entry gate to DW. I know at the time Ardent were interested in an AMF centre as part of that.

this was however many years back, so I'm not sure if those plans remained part of the approved master plan for the area

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I think developing with the idea of connecting into Westfield Coomera would be really clever, especially as Stage 2 of Westfield Coomera is quite entertainment focused so they can expand that through and get people to Dreamworld. There's also the integrated resort on the other side so you could make one really long connected entertainment and dining precinct. The catchment area of Coomera/Pimpama is the fastest growing in the country and the Northern Gold Coast is set to be a major hub going into the future so now is the time to plan ahead and get the plans right.

There is so much potential with DW if they have the vision and the will and if they just take a chance and invest big in the park, they're in exactly the right spot but you need some leadership with vision, Ardent are too conservative atm, build it and they will come. 

 

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If they can get together with Westfield and pull off something like they have done at Chermside with the restaurant precinct I would be all for the park working with Westfield for a entertainment area. It would be the perfect place to relax after a day at the park.

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Seemed as good a place as any to paste this...

Ardent wake-up call on Dreamworld land plan

Various investors in Ardent Leisure are believed to be eager for the company to put its plans for land adjoining its Dreamworld theme park on hold.

It is understood some shareholders are hoping to see the company’s long-term business plan for turning around the embattled theme park before any attempts are made to sell off parts of its property or embark on a sale and leaseback of the land.

Dreamworld and WhiteWater World are in southeast Queensland at the northern end of the Gold Coast, 48km south of Brisbane. Analysts believe the land adjoining the parks offers lucrative development opportunities.

Adding to the appeal, the Commonwealth Games will be held on the Gold Coast next year.

Ardent has previously engaged with real estate agents to look at the surplus property next to Dreamworld, and it is thought a sale or redevelopment in joint venture with another party is under consideration.

Some say a sale and leaseback of the Dreamworld land is on the table, but company sources have denied this.

Ardent Leisure is undertaking a full business review for Dreamworld, which will be concluded in the next few months.

The plans remain under the spotlight after Ariadne director Gary Weiss was last month appointed chairman of Ardent, replacing George Venardos. The change came after Ariadne and its backers amassed shares in Ardent and agitated for change.

Dr Weiss — a veteran corporate raider — and US-based executive Brad Richmond were appointed to the board.

Further changes at Ardent are expected to be announced soon and the theory around the market is that one of them involves putting a halt to any plans to sell Dreamworld’s real estate.

Ariadne and its backers, who include veteran property developer Kevin Seymour, have put forward a rescue plan for Ardent Leisure aimed at restoring confidence in Dreamworld and reinvigorating Ardent’s struggling US business Main Event before a potential sale or float of that unit in three years’ time.

Dr Weiss has previously said it is critical for Ardent’s board to be strengthened after incumbent directors presided over a substantial loss of value.

He predicted the bulk of the gains could come from getting the US operations firing and substantial value could be realised at Dreamworld.

Ardent’s theme park revenue has plummeted after four visitors were killed in a tragic accident on the Thunder River Rapids ride at Dreamworld in October last year.

Ardent also swung to a $62.6m loss last year.

The Ariadne camp, which holds about 10.9 per cent of the stock, claim to have won strong support on the company’s register.

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