“Crea&ng the Complete Zoo Experience” Beat the Elite 2014 CALK Consul+ng Situa+on RecommendaCon Risks PosiConing Impact ImplementaCon ”The Zoo Experience” – building a sustainable founda+on for the Zoo of the future.. Situa+on of an experience economy: 1. 2. 3. 4. 5. Revenues are highly dependent on seasonal fluctua+ons. During peak periods boClenecks are formed in the park (capacity 10.000) Impact in number of visitors aAer previous new iniCaCves had only temporary effects. 90 % of the visitors are people who live within a radius of 100 km. from the zoo. In 2012, direct revenue pr. visitor was 42% lower than Tivoli. Copenhagen Zoo should.. 1. 2. Increase its internaConal profile. 3. Increase yearly number of visitors from 1.1 (2012) to 1.6 million (2020). 4. Become independent of government subsidies, by building a strong sustainable business model. Reach a profit margin of min. 8 %. 2 The solu+on.. “By implemen+ng the new “Complete Zoo Experience” with the Zoo Hotel as part of the primary business, The Copenhagen Zoo will fla<en out the effects of seasonality on the revenue streams, while combining crea+vity, science and business into one unique experience for the customers.” The n ew all year science amusement in one central innova+ve solu+on Recommenda+on SituaCon Risks PosiConing Impact ImplementaCon ..Introducing the first integrated Zoo Hotel in the World.. Booked hotel nights in Copenhagen pr. year 5,000,000 4,000,000 urist b foreign to Increase in ookings 2008 2011 “The Zoo Hotel” 3,000,000 2,000,000 1,000,000 2007 All other countries 2009 2010 Denmark 2012 2013 Linear (All other countries) Hotel prices in CPH up 7 % in 2012 Booked hotel nights in Copenhagen 2013 700,000 600,000 500,000 400,000 300,000 200,000 100,000 -‐ RelaCvely stable base load of bookings Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Denmark 3 Market potenCal 0 Data source: DST, Hotels.com All other countries Linear (Denmark) • 8 floors • 250 themed rooms • 20 suites • 1 educaConal floor • 1 conference floor • Integrated zoo theme SituaCon Recommenda+on Risks PosiConing Impact ImplementaCon ..Crea+ng “The Complete Zoo Experience” to aCract more lucra+ve customer segments ”The Zoo Hotel” T h e Z o o E x p e r i e n c e 4 • • • • • • • Current segmenta+on of visitors (of 1.1 m) 60% 8th floor – Suites Exclusive(premium segment) 3rd – 7th floor – Rooms Incredible views of the park 24/7 lives stream of animals Access to aAer hours acCviCes in the Zoo “Sleeping with animals”-‐ experience SCll easy access to the rest of the city (central locaCon) Theme rooms(Savannah etc.) 1st & 2nd floor -‐ Hi-‐tech Conference faciliCes -‐ Lush dining faciliCes Ground floor -‐ Animal faciliCes -‐ Restaurant 30% Foreign tourists 10% material Travel between 30 and 100 Source: km Case Travel less than 30 km Current segment of visitors does not spend much per visit, thus we should tap in to new segments.. Adding new segments – tapping into more pro-‐spending visitors -‐ The Zoo Hotel will adract foreign tourist -‐ The “experience the Zoo at night”-‐feature of the hotel will help adract families from the rest of Denmark Foreign tourists and Danish families looking for the complete Zoo overnight experience will add a segment to the customer base, which spend more money per visitor on average thus increasing both volume and profit margin. SituaCon Recommenda+on Risks PosiConing Impact ImplementaCon Coping with the seasonal fluctua+ons for a large effect on the top and boCom line Price discriminaCon The Zoo Hotel features large-‐scale high-‐tech conference rooms and lush dining faciliCes, with the potenCal to feature both corporate fesCviCes and important meeCngs in adventurous and exciCng sed-‐ ings in the midst of exoCc animals. Business segment 2018 isolated seasonal effects of iniCaCves Addi+onal vistors pr. month AddiConal implementaCons along with the Zoo Hotel 5 Using price discriminaCon to regulate the economic adracCveness of visiCng the Zoo and the Zoo Hotel especially, in peak and off peak periods will help smooth the visitor curve and increase profits in periods with excess demand (summer months)” 100,000 80,000 60,000 40,000 20,000 0 Hotel Bundling Price discriminaCon Events The indoor animal faciliCes on the ground floor of the Zoo Hotel combined with the conference rooms makes for a perfect spot for hosCng special leisure and educaConal events – with a focus espe-‐ cially on the colder months, which will smooth the visitor curve so-‐ lely by increasing the number of visitors in off-‐peak months and thereby increase profits. Data source: cmport.dk Business segment Extra Events Bundling Building the world’s first in-‐zoo-‐hotel will create a lot of internaCo-‐ nal buzz, which will serve as the foundaCon for forming bundle deals for tourists visiCng Denmark for other direct reasons than vi-‐ siCng the zoo. Segments especially in mind here are cruise-‐ship guests – as they come in to town in a rather stable flow (770.000 guests in 2011)* RecommendaCon SituaCon Risks PosiConing Impact ImplementaCon Poten+al for interna+onal awareness The poten+al for increased interna+onal awareness and associated revenue outweighs risks.. Poten+al for interna+onal awareness The Zoo Hotel Mapping of the isolated effects of the different iniCaCves Events New animal adracCons Bundling Price DecriminaCon Cost cujng -‐ The synergy effects from the re-‐ branding of the Copenhagen Zoo builds the foundaCon for future growth in the different costumer segments. -‐ By offering the uniqueness of “The Complete Zoo Experience”, Copenhagen Zoo creates the potenCal for internaConal recogniCon and increased bookings from foreign tourists. Risk of failure *The size reflects potenCal for a sustainable impact on visitor contribuCon Risk factors -‐ Reversals of the trend in the hotel industry could cause a lower occupancy of hotel rooms than first anCcipated. -‐ General market stagnaCon can decrease willingness to spend mo-‐ ney on adracCons and sleepovers. -‐ Failure of seasonal smoothing by not introducing price discrimina-‐ Con and off season can result in a lower quality for the visitors, which eventually can lower the saCsfacCon and willingness to revi-‐ sit the zoo. 6 -‐ The establishment of seasonal events to adract visitors in off peak periods can potenCally create the foundaCon of a new emerging business segment as the by merging science and experience. -‐ Through more regulatory price discriminaCon, the smoothed revenue fluctuaCons creates potenCal for a quality experience for the visitors though out off peak periods. SituaCon RecommendaCon Risks Posi+oning Impact ImplementaCon ..As it puts Copenhagen Zoo into a BLUE Ocean.. ReposiConing relaCve to compeCtors By introducing “The Complete Zoo Experience”, the reposiConing of the target segments differenCates Copenhagen Zoo from other nearby compeCtors, while creaCng possibiliCes for increased synergy effects from new alliances. Copenhagen Zoo cannot replicate the strategy of its most successful compeCtors (high amusement parks such as Tivoli), which is why the rebranding of the percepCon of “the classic zoo experience” must be redefined by making a new more holisCc approach. 7 RecommendaCon SituaCon Risks PosiConing Impact ImplementaCon ..Increasing overall visitor rate and smoothing the visitor curve by focusing on off-‐peak periods.. Seasonal fluctuaCons in visitors in year 2016-‐2018 Base case 250000 200000 150000 100000 50000 0 Jan ‘16 Differences Jan ‘17 Jan ‘18 "The Zoo Experience" Status Qou Assump+ons New distribuCon of tourists (of 1.8 m) -‐ -‐ -‐ Old dist. of tourists (of 1.1 m) 40% 60% 10% 30% Foreign tourists 8 30% 30% Travel between 30 and 100 km Travel less than 30 km -‐ Growth in visitors from base of 1.1 million Level 2018 is sustainable 2014-‐2015 will see small decline due to construc+on of Hotel Added costumer base is primarily tourists -‐ Worst case: -‐ Best case: -‐ Base case: CAGR 4,3 % 7,7 % 12,4 % SituaCon RecommendaCon Risks PosiConing Impact ImplementaCon … by adding a more pro-‐spending segment to the customer base.. Making it possible to reach the financial targets 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 Revenue forecast (base case) Synergy Hotel 10% 8% 6% *Year 2014-‐2015 negaCve profit is due to the construcCon of the Hotel has influence on the park Scenarios -‐ total 2020 profit margin: -‐Best case 13,4 % -‐Base case 8,1 % -‐Worst case 4,8 % 2% -‐2% Zoo Hotel Total 9 17.0 12.0 7.0 4% 0% Profit forecast (base case) 22.0 Org. revenue Profit margin (base case) 12% 27.0 2.0 -‐3.0 Notes: • The original revenue declines due to lack of subsidies. • Purpose of hotel is not solely profits, but synergies, which create a larger profit margin. • Note the higher profit margin from synergies. Financing: The investment of the hotel is assumed to be 350 million DKK. This investment generates a slightly posiCve NPV – even in the worst case calculaCon. The invest-‐ ment size of the building is valuated re-‐ laCve to current projects by “Building Supply”. The calculaCons regarding the hotel are based on industry averages for revenue (room rent pr. night etc.) and profit margins. The investment is expected to be financed by issuing of new debt, private funds, private investors and potenCal venture partners. RecommendaCon SituaCon Risks PosiConing Impact Implementa+on Implementa+on -‐ Reaching the strategic targets, crea+ng a sustainable future.. 2014 2015 2016 2017 2018 Planning The Zoo Hotel Funding ConCnuous improvement of scienCfic features to the Zoo Experience Building process Opening Price discrimina+on Research on best pracCces Implement price discriminaCon for hotel Launch of new program ConCnuous evaluaCon Planning of events In Zoo Conference for grand opening (1 week) Events Off season events PromoCon Business segment • s Increased focus on business segment Conference offers Forming alliances with cruise-‐ships Bundling Bundling conference offers with complete packages with focus on off peak periods 10 …2020 A S U S T A I N A B L E F U T U R E
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