Parks face bumpy ride

Reopening no quick fix for Ardent, Village

ARDENT Leisure and Village Roadshow’s plans to reopen their parks from later this month has provided a boost to investor sentiment.

But Citi warns in a new report that big hurdles remain including the NSW border closure and an expected increase in Ardent and Village’s cash burn due to the higher costs associated with restarting rides and attractions.

Village announced this week it will reopen Sea World plus Paradise Country on June 26 followed by Australian Outback Spectacular on July 3 with family favourites Movie World and Wet’n’Wild 12 days later on July 15.

Ardent on the same day said it would follow suit and open its SkyPoint Observation Deck and Climb on July 10.

However, it did not fix dates for reopening Dreamworld and WhiteWater World, saying it needs more “clarity on the opening of the Queensland border, the lifting of other restrictions and the outcome of current discussions in relation to Federal and Queensland State Government funding”.

Both Ardent and Village have been under immense financial pressure due to the shutdown of their parks on March 23 due to the coronavirus pandemic.

Village has been burning through $10 million to $15 million and Ardent $5 million to $10 million in cash each month of the shutdown.

Citi analyst Sam Teeger said in a report released earlier this week that while the reopening plans were good for sector sentiment they would not have a material impact on earnings in the short term.

He said this was because of the closure of the NSW border in Queensland preventing interstate visitors coming and the lack of international tourists due to the ongoing ban on international travel. Mr Teeger also said extending the validity of passes that expired during the shutdown would impact new pass purchases.

“However, over the medium term we see the Gold Coast theme parks to benefit from a resurgence in domestic tourism as international borders remain closed,” the report reads.

Mr Teeger said he “suspects” Ardent may be delaying its reopening announcement because of a lack of government funding.