New IAAPA chairman brings global expertise
Starting his career at Disneyland in California, for the last two decades Darrell Metzger has served a number of high profile roles in leisure industry in Asia and the Middle East. The incoming IAAPA chairman shares his plans for the association, and his views about the amusement industry in general, with Park World.
At the time of writing, Darrell was just about to take up a fresh role as senior vice-president for The Venetian Macau Resort in China, where he will be responsible for the operations of support services for the Cotai Strip, a multi-hotel/casino resort being developed by the Las Vegas Sands Corporation.
Having earlier helped plan Disney’s first foray into the international market, Tokyo Disneyland, Darrell moved to Ocean Park in Hong Kong in the early 1990s. There he successfully implemented a US$100 million strategic plan that doubled profits and attendance.
He then went on to become CEO of the Sentosa Leisure Group in Singapore where he played an instrumental role in building the Sentosa brand and raised private investment of US$6 billion to improve facilities.
Prior to joining the Venetian, Metzger spent a year in Dubai as CEO of Ruwaad Holdings, where he oversaw the company’s entry into South Africa with the announcement of the Amazulu World destination resort in Durban.
An MBA graduate of California State University, Darrell, his wife Beverly and their two children, have lived and travelled around the world, but have always maintained a home base in Southern California. Darrell was due to be ushered in as the new chairman of IAAPA (the International Association of Amusement Parks and Attractions) on November 21, where he will remain the role for the next 12 months.
How has your career prepared you as IAAPA chairman?
I’ve had a long time to study, about 35 years now. We have had some chairmen who have served a whole career with one organisation, well I’ve gone in the opposite direction and literally moved around the world from company to company, each time I think for the better. I’ve worked for small parks; I’ve managed multi billion dollar companies and destination resorts, so I hope it’s prepared me pretty well.
What do you hope to achieve at IAAPA, and is one year long enough to do it?
A year’s not a long time. It can be very difficult for the management when you have a chairman come in for a year and then go back to their full time job, but the way this organisation is set up there is a five-year strategic plan. The job of the chairman is to keep the board and the management focused on that strategic plan.
We have an excellent education programme, and we are working on accreditation of those programmes. We are looking into collecting more industry data, which doesn’t really exist globally, so we have resources to draw on, particularly when it comes to public relations and crisis management; this information will be very useful for member facilities to draw on. Another thing that’s very important is government relations, wherever disruptive legislation is passed, primarily at the moment focused in the US because that’s where the industry is most sophisticated and where other countries look for best practice.
Each chairman will also have his own priorities or projects that are relevant to the time and are pushed. One of the areas I will focus on will be expanding our constituencies, because there are areas that are relatively untapped. If you look at the Middle East there is billions of dollars of business that has been …promised, we are all waiting to find out where it is perhaps, but we really need to focus on that. Asia is ready for a boom again: Korea, China, and of course if you look at Macau, the resort side of it, the Venetian Group alone is spending $20 billion. There is a lot of business for our members right now. Two-thirds of our members are suppliers and what do they want? Buyers. Where are there buyers that we have not been attracting? Museums, aquariums and casinos, they are all great buyers of our members’ products. But at the same time, we have very good relationships with organisations like the AZA (American Association of Zoos and Aquariums) and we don’t want to steal their members away.
How important is that IAAPA is seen as more than just a trade show organiser?
We have to provide good value to the members and if two-thirds of the membership are the manufacturers and suppliers, why are they members? They are members because they want to be in the shows and with the facility owners and investors, that’s where their business is. So for us to provide services to two-thirds of our membership that means trade shows. For the other third, the facilities, this is where they get their suppliers, consultants, designers and so on; so trade shows are very important.
The other things we look at is programmes that parks and attractions can use, it might be education and training, these facilities cannot always afford to send staff somewhere, but it we can do something for a very reasonable cost where they can send four or five staff for just a few days then that is a service.
Are there now too many trade shows around the world?
Particularly in Europe, it is an issue, but it will sort itself out. Asia is a good example, it had a couple of shows. IAAPA was a partner with one of those shows, and eventually bought it out, now it’s an IAAPA show. That took 10 years to sort itself out, to establish which worked best, which one suppliers were comfortable with, which one attracted the right buyers and investors. You can depend on IAAPA to produce the show, it will be good quality. I mean from our standpoint, we would wish there were only one show, but it’s not going to happen!
Do you envisage IAAPA establishing a presence in the Middle East or any other new markets?
Yeah, I think that’s why we need to get started and focused on it right now. At the moment there are I think two or three quite small leisure shows in the Middle East. What is happening now is what happened in Asia, there were two or three of them that popped up, and eventually it came down to one. I think in the Middle East we have to get ahead of the curve. One of the things I will do is form a special task force just with that purpose in mind, to look out in the Middle East and see what we should do there. Should we be involved in a trade show, should we have a representative there? How do we farm that market so that we are anticipating and not reacting to the business?
In Asia we are forming what we call an advisory committee that will be ongoing, like you have in Europe. In Asia we think it has evolved but not to where it needs to be permanently. I don’t know if it will ever get like it is in the US, but the Asian Attractions Expo is becoming a very significant show. And then we have Australia, which is a very solid leisure market and we already have a very solid relationship with AALARA (Australian Amusement Leisure and Recreation Association).
In between the developing and the mature is Lain America. That has come along nicely and has some very well done and profitable parks, entertainment complexes and indoor/outdoor attractions. How do we service that market? Right now they are serviced by our American expo, but the market is getting bigger and bigger and may deserve its own office. So we may have an Asian office, a Latin American office, A Middle Eastern office, it’s just a matter of when.
Is all the industry growth concentrated in these areas?
Asia is leading in the development of leisure markets, well ahead of the Middle East. The Middle East is going to come up behind it. They have announced I think about 20 theme parks in Dubai, I don’t think they’ll build 20 but they are going to build some. They have the staying power though, they can build something and keep it running and operating at high quality until the market evolves.
I think we are going to see Eastern Europe, Russia, start coming along and Africa as a matter of fact. In South Africa we recently announcing a big project at Ruwaad (Amazulu World) and there are several smaller ones. It’s going to take a while to mature, and the politics has to take a while to settle down in some of these places. It’s going to be a little unpredictable for the next few years in the Middle East, but the safe haven is the United Arab Emirates (UAE) and right now that the UAE is going to fill the void for recreation and leisure in the region.
What about the industry in Western Europe and the US, will it stagnate?
I don’t think it will, because people like Merlin and the other large consolidators, like Six Flags did years ago, will keep the industry on its toes. If something stagnates and starts to become good value for the dollar, someone’s going to come along and gobble it up, and then they are going to make improvements and maybe sell it off again. I don’t think the investment market will ever allow this industry to become stagnant, there’s so much cash flow; it’s just so attractive. It’s relatively easy to increase that as a company, you just jump in, buy your cashflow and leverage your investment.
Is the traditional (“regional”) amusement park model broken?
The European family day out, as I like to think of it, I think you will see a whole bunch of those appearing in China, you will see them in Korea; they are starting to appear in India. There are a lot of markets that can support these and it’s lot easier to build a regional entertainment product than it is to build a billion dollar destination resort.
How well is the industry poised to survive an economic downturn?
Those facilities that are very well run, or family run, are not going to have good years, but they will survive, they always have. It’s those that are highly leveraged that are going to require large attendance and per cap increases, they have to because every quarter they have to report their earnings. They are under a lot of pressure.
How vulnerable are ride manufacturers?
That can be tough, because of their lead time. Most parks will add some major attraction every two to three years, and then in the off years they will run promotions. But if they decide to stretch that to one more year, if all of them decide to go every three years instead of every two years, then the ride manufacturers could be hurt.
How will manufacturers from China and other emerging markets impact the market?
It is competition but not an unreasonable amount of competition. Their labour is cheaper but they have some way to go meet the quality of European and other manufacturers. The more sophisticated the industry gets in each country, the more they build quality and reputation, they are not trying to build something on the cheap anymore. I believe there are a few manufacturers who already have joint ventures and foreign partners in China.