In an exclusive interview with Business Today recently, the founder of the SGX1-listed Sim Leisure Group Ltd and long-standing themepark insider, Datuk Sim Choo Kheng, shared the previously unknown twilight zone tales of the leisure and entertainment sector, which has been largely stereotyped as "scary mechinical rides with screaming riders".
With 34 years of experience up his sleeves, the veteran themepark designer, builder and operator revealed that the amusement park is a misunderstood business. He said many themeparks in Asia are suffering because of the straight-forward implementation of the western model without taking into consideration the local cultural practices and preferences, and it's upsetting to see lots of themeparks in the region falling apart.
Western park visitors often end up with a large leisure and entertainment bill, by comparison, Asian park goers are frugal and safety conscious, spending perhaps just one third of the exorbitant bill. In this regard, all the Asian countries demonstrate the same consumer behaviour except for Japan and South Korea, said Datuk Sim.
Sim Leisure was the appointed contractor to design and build Qatar's waterparks for the country's hosting of the 2022 FIFA World Cup. In 2024, Sim Leisure's revenue for the first half of the year jumped 56.2% to RM87 million contributed by themepark design and construction work in the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia, which houses renowned themeparks such as the Six Flags Qiddiya and First Dragon Ball.
Given the expertise and experience, Sim Leisure is capable of completing a themepark project serving the same amount of visitors with only 10% of the investment capital needed by other big investment projects.
The group's low construction cost even won the praises of the Penang state government when a waterpark project in Johor cost just RM28 million as contracted by a native of Penang, compared to RM300 million spent by competing builder.
But Datuk Sim has a vision that goes beyond building themeparks for others. He has prioritised the development of an in-house themepark brand or identity that can "carry his business everywhere" and unlocking lots of potential especially within the Southeast Asian region and China.
Among the three major segments under Sim Leisure, namely Escape Park, Playmall and Kidzania, the Escape Park series is the best revenue drivers. Internationally, Escape Park is the only local brand that can compete with the western names.
The themepark strongman vowed to "suffocate" the roller-coaster business by a secret business weapon that occupies a small space area the size of an H&M store in a shopping mall, and monetarily costing just 5% of the regular investment budget.
Perhaps the best-kept secret in the industry, the new business strategy capitalises on shifting market preferences as youngsters especially those aged around 35 years and their peers are now looking for adventurous and memorable experience, giving rise to the popularity of kayaking, mountain climbing, and any experience-enhancing tourism. They don't rely on the tour bus to bring them to famous temples or touristy towers just to snap some photos.
It seems that the secret weapon is actually a state-of-the-art simulation chamber that offers potentially endless "experiencing" trips within the capacity of a supercharged server and high-tech equipment, plus accompanying peripherals.
Datuk Sim said with zero risk of death and heart attack (stemming from aggressive physical activity), visitors to the chamber can experience their roller-coaster ride entirely based on simulated experience, complete with special sound and wind effects for a safe yet thrilling ride. When they feel the ride is still too intense, the riders can simply take off the headphones and sci-fi goggles right away.
Looking at the dry urban leisure sector, Datuk Sim told himself that it's high time to bring the fun of "kampung" or countryside to the city. His business vision and outlook include 30-acre land areas to house Escape outdoor challenges, as well as bringing "outdoors" indoors by building themeparks within shopping malls through his PlayMall crusade.
The PlayMall initiative carries the themepark guardian's salvation plan of repopulating the malls with shoppers by giving them a substantial reason to visit the malls. Unsurprisingly, Datuk Sim said he has received a lot of phone calls and emails enquiring about PlayMall and he is currently shortlisting suitable mall sites for further negotiation.
Kidzania, on the other hand, is an acquired brand that has flourished under the leadership of Datuk Sim. Currently Sim Leisure manages two Kidzania centres, one in Kuala Lumpur and one in Singapore. The Asian brand of blending fun and learning caters to education-oriented Asian parents who treasure hands-on experience in role-play sessions.
Cost-wise, Datuk Sim said themeparks' most prominent cost item is the fixed cost and the variable cost is minimal. Therefore, any rise in revenue through ticket sales can go straight into the profit pool – pure bottom line.
Sim Leisure generates the group's revenue by ticket sales. Operational efficiency and cost optimisation drives have reduced its reliance on ticket agents. The group used to sell 50% of its tickets through its own portal, while getting the other 50% from the ticket agents. Now the ratio is 90 to 10.
Cost saving can also be observed from the doing-away of ticket counters, in turn sparing visitors of long queue, as well as the elimination of the marketing and customer service departments in favour of automated online enquiry system (emails and Whatsapp), digitalised ticketing system, and outcourced call centre. The fast ticket sales and processing have contributed to faster conversion rates for the themeparks.
In terms of customer demographics, "families and friends" category is the main focus of Sim Leisure, making up 80% of the total number of visitors while corporate team building sessions and school excursion tours account for 20% of Sim Leisure's business.
Sim Leisure has projected around 550,000 visitors and double-digit growth in park revenue for 2024. By mid 2025, the park portfolio of Sim Leisure will have expanded to include five indoor parks and three outddor parks.
Looking ahead, Sim Leisure is eyeing East Malaysia for its expansion of Escape Park to Sabah.
Datuk Sim said that all the elements of business success have always been out there, it's up to us to put them together in a way that can hit it big. For example, computer, screen, CPU, touchscreen, keyboard, music, video, telephone have been present everywhere in our environment, but only one guy, that is, Steven Jobs, managed to put them together and create a new versatile device called "smartphone" that has become the staple of modern-day living.
- SGX: Singapore Stock Exchange ︎
