Would You Buy Shares in Port Aventura?

1. Would you buy shares in Port Aventura? Study the economic and financial business model, the competitive environment, and the market trends. What are the critical levers that influence the profitability of the business? How do they relate to one another?

• Passive activities

o Shows etc

• Active activities

o Roller coaster etc

• Additional activities

o Food services etc

Market size: 60 million visitors (euro theme) + 160 million visitors (NA theme)

92% of the total revenue is contributed by entrance fees, catering & shops.

Critical levers:

• Entrance fees

• Expenditure per person (entrance fee + money spent inside the park)

• Yield - Actual income as a percentage of official ticket price

• # of days that the park stays open in a year

• Labor costs

• Promotion strategies

• # of ticket sales – right now @ 2,100,000

• Total # of visitors - right now @ 2,760,000

• Segmentation – which segments contribute max to sales & profit

2. What is your assessment of the results obtained in the first year?

• Good gross margin – 82.9%

• Poor profit before tax – breakeven?

3. What should be the management agenda for Port Aventura's second season? What should be the priority for 1996 with regard to attracting customers? Is it a good idea to reduce to a minimum the use of joint promotions offering Port Aventura tickets as free gifts? Is it practicable and reasonable to reduce the discounts offered to the channel in 1996?

• Build brand

• Increase yield

• Stabilize labor costs

• Forecast demand (# of people coming in) better

• Increase expenditure per visitor

• Increase