Wonderla Holidays’ net profit fell 19 per cent in the first quarter compared with the same period last year as revenues were hit due to high prices leading to fewer footfall. Speaking to BTVI , Wonderla Holidays MD Arun Chittilappilly says revenue growth will return when footfall rises in Bengaluru and Kochi amusement parks. The Hyderabad park is generating robust revenue. For the first time, customers are paying more than ₹1,000 for a ticket, which has led to some decline in footfall, he said. Excerpts:

Wonderla’s revenues have gone up, but your operational performance has been a little weak and the EBITDA margin has gone down. There is pressure on the bottom-line as well. What are the factors behind these pressure points?

This year, we opened our Hyderabad park and that has contributed largely to the revenue growth. We had extra ₹20 crore of revenue coming only from Hyderabad and that has helped us maintain a good revenue growth.

The reasons why we have knocked out on some margins is because we have a high depreciation cost for the new park, which was expected. It is about ₹7 crore for this quarter. The other reason for the margin drop is we have had to make provisions for our service tax disputes. That also has taken our margin down.

On top of that, we also have footfall drop in Kochi, which again was expected. But in our business, any kind of footfall drop affects the margin. So these three factors have contributed to the margin contraction.

If we start growing in Bengaluru and Kochi , I think these trends will be reversed. We are very happy with the way the Hyderabad park has started. It is already operationally profitable in the first quarter. So that is something; which we were not expecting and came as a pleasant surprise.

The Bengaluru park has seen a drop of almost 12 per cent and the Kochi operation has seen a decline of 24 per cent despite the fact that April-May was holiday season. If you see a drop in the peak season, is it not a matter of concern as the next quarter is seasonally weak?

Our parks have already been running pretty full for the last few years. There is not really much we can add in terms of footfall in Q1. That is one point. The other point is that our prices in Bengaluru and Kochi have gone up by 25 per cent. If you compare against last summer, there is a huge difference because of the service tax and other things. So again we were expecting an impact in our footfalls.

Also, our pricing for summer is the highest — almost 15 per cent more than other seasons. So all put together, this is something that we have to pass on to our customers because it does not make sense for us to absorb almost 18 per-cent hit on our top-line. We passed on the entire service tax to the customers. And the drop in revenue is one of the repercussions of that.

This might continue for another quarter or so and then I think it will be stabilised. For the first time, customers are paying more than ₹1,000 for a ticket. It has never happened before. These are expected. But there is nothing we can do about it.

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