Thursday, 15 October 2009

The Official Under Waterworld Unfeasibility Study

With all the bullshit floating to the top of the Barron River water table about Paul Freebody's proposed Waterpark, I thought we'd do a little maths.

Thanks to Jeremy Blockey, chief of the Cairns Chamber of Commerce, who also runs Blockey Consulting, he has done an economic impact statement for Paul Freebody's Under-WaterWorld, planned to be situated right in the middle of an active river system, just north of Cairns.

Blockey concludes that the project is a $30 million investment, producing 57 full time jobs (not 200 as Freebody and the Cairns Post keep ranting on about), with an annual $2.7m wage bill.

With the help of a CairnsBlog reader, here's a few quick "back of a beer coaster" calculations, result in the following operating costs, excluding wages:-
  • Rates
  • Water charges.
    Present rate is $1.03 per kilolitre for commercial users. Would expect massive water usage with initial filling, maintenance, evaporation, splashing and visitors showering.
  • Electricity.
    Would expect costs to be high with water pumping, filtering, chlorination, power, and security lighting
  • Property insurance on large capital investment
  • Public liability insurance on activity with risk of injuries or drowning.
  • Workers compensation.
    Based on the Queensland average premium of 1.15%, the cost on $2.7 million would be $31,050 per annum.
  • Compulsory superannuation contributions.
    9% of $2.7 million is $243,000
  • Payroll tax.
    Approx. $107, 500 per annum on $2.7 million total wages if only entity. Higher if other related entities also pay wages.
  • GST
  • After hours security
    They didn't catch the
    CairnsBlog photographer last week.
  • Maintenance costs including repairs and chemicals
  • Telecommunications costs
  • Vehicle expenses
  • Etc, etc, etc

As an off-hand rule of thumb, one could realistically expect the other costs to at least equal, if not exceed, the wages total.

Paul Freebody has "conservatively estimated" annual visitor number to be around 250,000, based on some neighbouring tourism ventures are achieving.

  • Even if he achieves this figure, based on an annual operating cost of $5.4 million, he would have to charge $21.60 admission per person just to break even.
  • At 100,000 visitors per annum, the cost rises to $54.00 per person. After investing $30 million, he would probably expect a return on investment of 10% to 20%, equating to $3 to $6 million per annum.

  • At 250,000 visitors per annum, a 10% ROI is $12, and a 20% ROI is $24 per visitor.
  • At 100,000 visitors per annum, a 10% ROI is $30, and a 20% ROI is $60.
  • Thus, if the operating cost assumptions are correct, even if he achieves 250,000 visitors per annum, and he is happy with a 10% ROI, he will need to charge every visitor $33.60.
  • If Freebody wet dream only achieves 100,000 visitors per annum, and he requires a 20% ROI, the charges rise to $114.00 per visitor.

A little Google research provided the following details on some leading local tourism ventures.

  • Kuranda Scenic Railway: 500,00 visitors per annum. One-way fare Adult $41, Child $21, Family $103. Return fare Adult $61, Child $21, Family $153

  • Skyrail: Visitors per annum confidential Investment $35 million One way fare Adult $41 Child $20.50 Family $102.50 Return Adult $59 Child $29.50 Family $147.50
  • Tjapukai Aboriginal Cultural Park: Visitors per annum 150,000 (2006) Investment $10 million Adult $33 Child $16.50 Family $82.50
  • Green Island: Visitors per annum 385,000 (2004) Adult $73 Child $36.50 Family $183
  • Paronella Park: Visitors per annum, around 150,000. Adult $32, Child $16, Family $86 (admission includes unlimited return visits for 12 months, nice.)
  • Cairns Tropical Zoo: Adult $32 Child $16 Includes returns for next 2 days Yearly Pass Adult $56 Child $28 Family $140
  • Sugarworld: Adult $12, Child 5-14 years $10, 3-4 years $4, 2 years and under free, Family $38
  • Wet n Wild Gold Coast: Adult $49.95, Child $32.95. Annual pass: Adult $145.95, Child $95.95

Sugarworld at Edmonton, only opens on weekends, public holidays and school holidays, obviously as the majority of visitors are locals who either work or attend school.

Whilst Paul Freebody could realistically expect a lot more tourists on his pie-in-the-sky visitor numbers, he would still have a much higher number of visitors on weekends, public holidays and school holidays.

As there are 11 weeks of school holidays in Queensland, 42 weekends outside school holidays, and 4 public holidays outside school holidays, there would be 165 busy days and 200 quiet days.
On an assumption that visitor numbers would be 4 times greater on 165 days than on the other 200 days, then visitor numbers on the busy days would be 465 daily based on total visitors of 100,000 per annum, or 1,162 daily based on total visitors of 250,000 per annum.

The lower number, which is in keeping with his planned number of car park spaces, would result in extremely high entry prices, or very low gross income.

The higher number, which is in keeping with his expected visitor numbers, would require a much larger car park. He's planned on less than 200. Council say 700 is the minimum. Deputy Mayor Cochrane wants a compromise at 300.

Visitor numbers could also be expected to be lower during inclement weather during the annual wet season, and during the winter when unheated public pools actually close for the season.

I bet you didn't know, but in the 1980’s, a water-slide facility operated on a site on the western side of Lake Street near where the Playpen used to be. It used to be very popular prior to some moron placing old razor blades in the water, resulting in a few visitors sustaining cuts. There was a considerable amount of concern following the incident, with many visitors and former visitors worried about it occurring again, and the facility eventually closed down.

Some of the slides were transported to another water park in South East Queensland, and the remainder ended up at Sugarworld. I think the Lake Street facility was called Cairns Waterworks.

Now, where do I send my consulting bill to Paul? I mean, we are here to help.

Some food, and numbers, for thought.

10 comments:

Trevor Herrington said...

Oh Michael, Blockey Consulting forgot to offset against the overall costs the proceeds from the sale of the Excavator for scrap steel! Perhaps Blake, Bonneau or Cochrane could be on commission to organise the disposal thereof.

nocturnal congress said...

I remember the Cairns Waterworks in Lake Street very fondly. Sadly some mongrel of a person did sabotage it.

Blogster said...

Freebody maybe?

(sorry for the cheap shot)...

Freebody's Neighbour. said...

With all the controversy surrounding this ill located enterprise I will be surprised if any local or Australian financier would lend Freebody any money at all.

I imagine that it would be vendor finance that would commit funds, desperate for a sale of water slides etc.

It would be wise for Freebody and Cairns Regional Council as the approving authority, to factor in a class compensation action.

I have spoken to adjoining landholders and they have indicated to me that if approval is giving a class action will ensue.

The initially action will be to apply for an injunction, to stop the project proceeding with the construction of the levee bank.

Legal precedent originating in England on which our laws are based, states that if the natural flow of a stream is interfered with and up stream or down stream land holders show that a deleterious effect has occurred, the applicant and approving authority are held responsible.

I suggest that Freebody withdraw his application and or Council refuse the application.

Nikkiwi said...

As a parent with two children and a past and future tourist to Cairns, I probably fall into Mr Freebody's target market. As such, there is NO way I'd pay those kinds of prices to visit a waterpark (which I can do in my hometown very easily anyway), when there is:

a) Any number of perfectly good beaches (free)

b) The lagoon on the esplanade (free)

c) A swimming pool at my accommodation (included in my accommodation costs, so at all intents and purposes, free)

I'm sure many of the other tourists coming to Cairns will feel the same way. After all, as has been pointed out in the article, there are many other tourist attractions that I can't access in my home town, and I only have so much money to go round, why spend it on something you can get at home...

Lillian at Yorkeys said...

Interesting points above - I would suggest that the Clifton Beach crew somehow get in touch with Freebody's Neighbour & investigate the rule of law re the streams. Surely, this would apply to the Glencorp development?

Second interesting point - from Nikkiwi - hi there, good to hear from a regular visitor to Cairns - yep, just waht I thought, there's no way ordinary folk will be able to afford expensive waterpark rides a la Freebody's proposed developemtn. Just what I thought several weeks ago.

And you make good points Nikki as the resources you find already around you as, I would assume, a visitor, with kids, on a budget. I wish some of the other tourist companies in Cairns would take this into account over the long-term.

I just did a google on Sugarworld, & it's still functioning, still cheap, & still looks very affordable. It's at Edmonton, Nikki, about 15 minutes south of Cairns.

Do we really want another waterpark in such a small city? And more - do we want a Really Ugly Gold Coast type of development in that beautiful pristine part of the Barron Delta? Apart from all the yays & nays of the issue, it would be bloody ugly.

One last thought - if Freebody wants to really utilise that land, hows about we redivert it back to rich agricultural land? Yep, market gardens. Let's make it the food bowl of Cairns - there's such a need for fresh agricultural products here in Cairns. It could not only be a growing bowl, but also could become a visitors centre for local products & produce - & I'm sure that in future times, Mr. Freebody, you would be vaunted for being such a far-seeing creature. Think about it, Paul.

Otherwise, sell it again. It's SO silly.

The Grateful Mac said...

"And more - do we want a Really Ugly Gold Coast type of development in that beautiful pristine part of the Barron Delta?"

No we don't, but people are strange. I remember years ago, when still a regular visitor to Cape Tribulation, some couple at PP's backpacker resort complaining that "there was nothing to do for the kids !"

So why go there if you are so dependant on artificial entertainment. It's a bit like many of today's pubs and clubs where conversation has been replaced by poker machines and a tv screen in every corner.

And Lilian, your idea of market gardens will never get up. It just makes too much sense and there are no developer dollars in it.

Fiona Tulip said...

To Lillian from Yorkey's.....

It is a very sad truth, that it has been our experience that no government department or their legisation, policy, moratoriums etc in the State of Queensland (you know "the Smart State", be it local, state or even federal jurisdiction has been effective in saving/preserving any creeks, riparian corridors, waterways and wildlife corridors on the Northern Beaches of Cairns in the last 5 years.

We lost a cause last week, whereby the developers of North (Trinity Projects), Clifton Beach, who are currently in the Planning and Environment court over Council's refusal to grant an extension to their DA currency period, were able to take out an operations permit to build a huge walkway, over Deadman's Creek, to connect two buildings that are not yet built, because they do not have a current DA for.

Unfortunately, the IPA, has failed again to do its job, and the permit was obtained legally.

This will be the sixth crossing of Deadmans Creek (includes vehicular and pedestrian) in a space of about 1klm (Captain Cook Highway, Clifton Views unit development, Yule Ave, North development and Arlington Esplandade X 2).

So much for sustainable development and protection of biodiversity. Deadman's Creek has been destroyed by developers!

Its that simple really!

Trevor Herrington said...

An update on the comings and goings at Freebody's 'Underwater' Park. A citizens inspections was conducted over the weekend. It was noted no activity was conducted over the week.

What did I see, one might ask ?

1. One broken down old Excavator on the edge of a lagoon. It appears the front tracks bearings have collapsed. They have been removed and sent for repairs. It seems Freebody is waiting for development approval before he can pay for the repairs.

2. Freebody has employed a Security service that calls at random. It seems, not withstanding a $35 million project, he does not have the financial resources to employ them full time.

3. An inspection was made of the abutting old Barron River channel, that is 30 metres wide and 6 metres deep, that is proposed to be dammed so that his Underwater Park is not totally demolished with the first Q5 flood.

4. I call on Cairns Regional Councillors to have an on site inspection with adjoining landholders, before further consideration is given to Freebody's application.

5. Failure to have an inspection will be further evidence of a dereliction of duty and care in the discharge of their community responsibility. Two Councillors have Law degrees and would be familiar with this claim and the claims made by "Freebody's Neighbour" in previous commentary.

nocturnal congress said...

Let's hope the serious issues raised in this online debate, don't get annihilated by the emotional call for jobs.