A Rollercoaster Ride To Extinction
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng says that the industry was doomed from the very beginning.
Subscribe to our FREE Newsletter, or Telegram and WhatsApp channels for the latest stories and updates.
The sun’s shining, the air’s buzzing with excitement, and a sea of smiling faces surrounds you. Yes, a day at the theme park can be a blast for the whole family and has been a go-to for fun and frills the world over.
But despite being recognised as a key player in the nation’s tourism sector and big ambitions of turning the country into the ‘theme park capital’ of Southeast Asia, Malaysia’s family theme parks, attractions, and recreation industry has been on quite the rollercoaster ride.
Reportedly, the industry suffered losses of around RM4.8 billion between 2020 and 2022, largely due to the pandemic, but continued to experience slow growth even with the jump in the number of domestic and foreign tourists, as well as a revenue increase by almost two-thirds when the masks finally came off.
Interestingly, data suggest that both locals and foreign travellers are more inclined to spend their recreational time sightseeing or shopping over visiting the many theme parks that have sprung up across the country.
This trend sheds some light on why Malaysia has witnessed the closure of several once-acclaimed and celebrated theme parks, like the Movie Animation Park Studios in Perak, which shut down in 2020 after just three years in operation.
So the question arises: What’s next for Malaysia’s leisure landscape? Well, according to some insight from Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng; the outlook appears bleak.
(Credit: via Sim Leisure)
Doomed from the start
With over three decades of experience in the business of developing and operating theme parks, Sim argues that the industry was predestined to fail because of novices who entered the industry without expertise.
The industry was doomed from the start based on newcomers entering where almost all of them, especially those in Asia are not from the leisure industry. They are real estate developers and from other industries cross-subsidising theme parks to enhance their core business with no theme park experience trying to emulate Western theme parks which are already on the decline and whose business model does not work in Asia. This is akin to a first aider trying to perform heart surgery. These novices are quick to become victims of over-selling and over-promising by theme park salesmen and ‘experts’ with no skin in the game.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
He says this problem is not unique to Malaysia, as it has already been seen throughout Asia, particularly in China.
This is exemplified by the downfall of Wanda Group, the nation’s premier theme park investor, which once had ambitions to outperform Disney, but ultimately had to relinquish control over its theme parks and assets.
The death of the theme park
Sim firmly believes that the one-size-fits-all approach of traditional theme parks simply doesn’t cut it anymore and no longer appeals to the masses.
He deduced that the days of conventional theme parks, or what he calls “mechanical theme parks”, are nearing their end. He explained that large, mechanical rides, like roller coasters, are simply becoming outdated, likening them to fax machines.
Mechanical theme parks are on the decline and I’ve never seen anything that has been used for so long. Roller coasters were invented decades before the fax machine. Now we have WhatsApp.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
He emphasized that despite advances in technology, these mechanical attractions remain fundamentally the same and no longer captivate people, especially the newer generations, as they once did.
Roller coasters are like fax machines, even if they’re faster or can transmit colours, it’s still a fax machine. A faster roller coaster is still a roller coaster. People are sick and tired of seeing the same thing when they already have more ‘experiential’ alternatives, which is the heartbeat of today’s youth. Research confirms that the current generation is not fascinated with roller coasters. Anything your father uses is not cool, to put things into perspective. The youth have certain preferences and we must be relevant to modern consumers.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
He also explained that there is a stark difference in demand for leisure between Asians and Westerners, saying, “We have to understand the culture in terms of how we Asians spend our money and our priorities in life,” and stressed that historical and cultural contexts play a pivotal role in shaping people’s perspective on recreation.
You must understand the background of Asia, North America or Europe. 50 years ago we were still struggling to put food on the table. In Malaysia, our forefathers were still thinking of how to feed the family, while in the Western world you have families thinking of what to do this coming weekend; ’ So in the demand for leisure, we’re behind as we prioritize economic well-being and future planning for our children over leisure pursuits. Although our demand for leisure is growing the majority of our disposable income is focused on material possessions due to differences in culture and our life’s priorities. This is why brands like KidZania, which we own in Malaysia and Singapore, do well in Asia, not in America or Europe. In the West consumers are willing to spend over $120 for a day in a theme park, whereas in countries in Southeast Asia and China, our spending power is a third of this. But at the same time, we are willing to invest far more in our kid’s education and new cars.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
Moreover, Sim argues that the industry’s reliance on large-scale Western, big-budget projects and traditional paradigms does not address consumers’ primary need to have fun and not visit mega-budget monuments that promote movies. He says that this was a major misconception of the industry by investors and operators alike.
The whole idea of the amusement park was hijacked by the movie industry because they’re big boys, movies are a big industry, and they have big budgets.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
“We are in the fun industry. We are not in the monument industry,” he said, underlining industry player’s fixation on grandiose structures and the notion that size and expense equate to success.
People have been indoctrinated to believe that that’s the only way, you know. You have to have a big facade.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
Sim asserts that this mindset has resulted in conventional theme parks now being a failed business model.
For you to get the return on investment, you have to do your simple math. I can tell you that usually, these types of investments would need more than 10 million visitors who are willing to spend USD120 per day to enter. Now do your math and you will conclude that this is far away from being achievable. It was never sustainable from day one.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
On the other hand, the Sim Leisure Group has continued to grow its financial gain with new record profits of RM29 million in 2023. This achievement is attributed to its strong focus on creative design over a big budget, resulting in a cost-effective business approach
Sim emphasizes that for the industry to thrive, developers and operators must recognize the significance of cultivating “smiles per hour” – focusing on customer satisfaction and happiness by delivering high-quality fun and entertainment that is accessible to all.
We don’t spend money on huge facades, dream castles and all these colourful magic wonders and so on. We spend on things that matter to our business. If you have customers who truly enjoy their day, they’ll return and become your biggest promoter.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
Killing the theme park
With aspirations to carve out a new niche in the industry, Sim asserts that his company is capitalizing on the opportunities presented by the digital revolution to provide customers with an unmatched experience through the “Sim Coaster” — an immersive virtual reality encounter that delivers the exhilaration of riding a roller coaster without the physical constraints or safety concerns associated with conventional, mechanical attractions.
(Credit: via Sim Leisure)
“The simulation provides an authentic roller coaster experience, complete with sensory stimuli such as wind, movement, sound, and smell,” he explains, adding that unlike conventional, mechanical rides the Sim Coaster will be accessible to everyone.
The only difference is that you won’t be scared. This is not going to kill you. If you are scared you just take off the headset. Therefore, everyone can ride. Roller coasters are no longer only for those who are young. Now everybody, even small kids with no age limit, can also go on (the ride).
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
Sim is confident that the innovative ride will usher in a new era of global family entertainment, providing people with customisable and interchangeable adventures. Whether voyaging to the moon or delving into the depths of the earth, each ride promises a distinct and thrilling experience.
From a business perspective, Sim Coaster will be 20 times cheaper than a typical theme park roller coaster ride. This will seriously disrupt the industry and be a total game changer for theme parks as we know them.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
The Sim Coaster will be a component of the company’s broader vision of the “Play Mall” concept, where shopping malls are transformed into vibrant hubs of leisure and entertainment, as well as, a new reason for people to frequent malls again.
(Credit: via Sim Leisure)
Sim envisioned this concept as a way to rejuvenate the shopping experience for patrons and reverse the downward trend in mall visitations and occupancy rates, something which many outlets have been grappling with.
By bringing the theme park business into a weather-proof, controlled environment, he says, they can operate all year round, a feat previously impossible in the theme park business.
With offerings like the Sim Coaster and HavenXR, the company’s other foray into virtual reality entertainment, they plan to shake things up in the mall business and breathe new life into the experience by catering to the evolving preferences and higher tech-related spending of today’s generations.
He is confident that Play Malls can bolster the growth of the retail industry, as well as support the food and beverage businesses and other services within malls.
Remember when going to the mall was a weekly ritual? Nowadays, it’s like, malls just aren’t cutting it anymore. The foot traffic’s dropping by the day. But with this concept, trust me, it’s going to breathe new life into malls. It’s about time they became cool and fun again.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
Sim envisions this concept will put a nail in the coffin of the mechanical theme parks to usher in a new era.
This will bring new life to the industry, and to malls as well. We are not making malls irrelevant but the opposite, relevant again, at the price of killing mechanical theme parks.
Sim Leisure Group founder and executive chairman Datuk Sim Choo Kheng.
He anticipates the Sim Coaster and the Play Mall concept to be operational by the end of 2024.
Share your thoughts on TRP’s Facebook, Twitter, and Instagram.
