Why Projects Fail: Hard Rock Park
While a lot of theme parks are successful, at least for a while, others that are built are suddenly gone within just a year or two. Why is it some fail and what is the single biggest reason that parks fail?
More parks are actually developed than fail. However, there have been some enormous failures during the last 15 years. The most significant that comes to mind is the Hard Rock Park, built in Myrtle Beach, South Carolina. This was a project doomed from the beginning. The developers of the park literally reached out to almost everyone in the industry for advice and assistance, but in reality did not listen. Why was the park a failure? Let us capsulize the reasons.
The Myrtle Beach market, known as the “Redneck Riviera”, is known for servicing two very distinct markets – golfers and beach-goers. Each of these groups has distinct characteristics.
First, the golfers come for one reason – to play golf. On average, the golfers try to work in about 24 to 36 holes of golf each day. At the end of the day, they like to have a few beers, have dinner, and then it is bedtime. Incidentally, there are more than 100 golf courses in Myrtle Beach, and if you cannot get enough long courses, there are over 50 miniature golf courses to play on all day long and into the evening.
The second group of visitors in Myrtle Beach are the beach-goers.
Their day consists of getting up, going to one of the dozens of pancake houses, having breakfast, and then hitting the beach for the whole day. They then go back to their hotel, clean up, and stroll the strand. They are then ready to get up the next day to hit the pancake houses again. If this seems silly, keep in mind it is true. Typically, this group is on a tight budget.
So, back to the failed Hard Rock Park, and why it failed.
Fundamentally, it was built in the wrong place. As we have all heard…….location, location, location. The Hard Rock Park was built on 55 acres of property between 501 and the Intercoastal Highway. This was the former site of the failed Waccamaw Factory Shops (outlet malls). It was in an area people did not want to visit, as it was too far away off the beaten path.
Not only was it in the wrong location, the park was also ill-conceived, poorly designed, and highly overcapitalized.
Additionally, it was expensive to visit. With a general admission of about $50, it was far too expensive for the type of park and the attractions it offered. People who came to Myrtle Beach had a theme park in their own “backyard”, which was bigger, better, and typically less expensive.
So, Hard Rock Theme Park really missed the mark on many essential aspects of planning, designing, and operating a park. These included bad location, poor layout / design, poor product line-up, over capitalization, and no real market to play to. This development was really a classic case of “if you build it, they will come”. NOT! The park opened in April 2008 at a cost of $400 million and closed in September of that same year. A very sad loss for the investors and a blemish on our industry.
Wrong place, wrong concept, wrong market to cater to, wrong, wrong, wrong. But, they went ahead and did it anyway.
I mentioned at the outset that the developers canvassed the industry for advice and assistance. I know that they approached Six Flags, Cedar Fair, our company ITPS, Herschend Entertainment, other large operators, and ex-officials of the industry – all of whom said “don’t do it.”
After the fact, ITPS was hired by Cerberus Capital to perform a forensic audit on the collapse. We were mortified by the planning mistakes made and the amount of money that was “supposed” to have been spent on the park. This was clearly the most unprecedented “meltdown” of any park failure in recent time.
Sometimes, you have to tell a potential client, “just because you have an idea does not mean it is a good one!”
Usually there are early warning signs. Feasibility studies normally point out the glaring errors that need to be cautioned. If a site location is wrong, if too much or too little capital is being planned, if the market population is not there to support strong initial and repeat visitation, if the design is poorly conceived and then executed, disaster is sure to strike. There was and remains a lot to be learned from the Hard Rock failure.
We like successes in our industry. Here at ITPS, when it comes to “possible projects”, we see them all -- the good, the bad, and the ugly.
ITPS
2200 Victory Parkway, Suite 500A
Cincinnati, Ohio 45206 USA
513-381-6131
itps@interthemepark.com