London Entertainment Resort: All Discussion

[Benjsh]

If they had any money they'd already be building the park by now. The government from what I can see have been nothing but positive as it will bring jobs to the region and attract tourists to boost the economy. They were never going to be against the idea.

So what's the hold up? They don't have any money clearly. It's a nice idea and would obviously be welcome to all us enthusiasts but there's more chance of pigs flying than this going anywhere. They are just kicking the can down the road for the umpteenth time.

Hope someone asks them during the public consultation how much money have they received so far in investment. That should be the first question. If its less than 10% which I think it's very likely to be then that should be that. Stop wasting everyone's time.

 

[Matt N]

I think the hold up has been down to the amount of red tape involved in the planning process. A project like this will have a very long and complex planning process due to the planning laws in Britain, so it’s naturally going to take a really long time. PY Gerbeau suggested that it will take 15 months (in a best case scenario) once the DCO application has been submitted for the Secretary of State to make their decision.

They also need to refine the proposal and make it palatable for locals as well as compelling for tourists, hence the many rounds of public consultations (this is the final one, whereas the previous two were more early stage) and years of compiling reports and doing environmental studies. Building a Resort like this from scratch is no quick task; many years of work need to be put in. Disney scouted land options for Shanghai Disneyland as far back as 1999; the park did not open until 2016. A lot needs to be done in order to get a place like this off the ground.

Also, PY Gerbeau has previously suggested that the Resort does not need funding due to its owners, and they are not currently trying to raise any debt or equity.

If they did receive this funding in late 2018/early 2019, then surely this would be a huge leap forward for the project, no?

 

[Swarm Chris]

In terms of make or break, I believe that's exactly where the project is. I can't find the original sources, but it seems when the new leadership came in last year, the expectation was the project would be financed through to the end of 2020, and if there wasn't a successful application, the project would be over.

This public process at least means the project is on track, at least on those terms. But yes, they've taken forever to get to this stage, and the next stage of funding won't be simple either.

 

[Rick]

Have they claimed to have all the money? The consultation is important for a number of reasons, but it does provide some clarity and assurance for investors. It's perfectly normal for projects of this magnitude to be funded in this way.

How is this project wasting anyone's time other than of those who are actively following it?

Are people misunderstanding the scale of this thing or misunderstanding the complexities of getting something like this funded and approved?

The set up time has been long and drawn out, but the fact anything is still happening is a positive.

@Benjsh You're hating on Thorpe in another thread and wishing for its most likely competition to fail here. I don't get it.

 

[Benjsh]

Have they claimed to have all the money? The consultation is important for a number of reasons, but it does provide some clarity and assurance for investors. It's perfectly normal for projects of this magnitude to be funded in this way.

How is this project wasting anyone's time other than of those who are actively following it?

Are people misunderstanding the scale of this thing or misunderstanding the complexities of getting something like this funded and approved?

The set up time has been long and drawn out, but the fact anything is still happening is a positive.

@Benjsh You're hating on Thorpe in another thread and wishing for its most likely competition to fail here. I don't get it.

Please show me once where I'm wishing it to fail. Just one example will do. I have said throughout it would be fantastic if this place goes ahead. Who wouldn't want this to happen as an enthusiast?

Wanting it to happen and thinking it will aren't the same thing. I hope I'm proved wrong but I don't think I will be. This project has been very questionable from day one.

 

[Matt N]

In terms of make or break, I believe that's exactly where the project is. I can't find the original sources, but it seems when the new leadership came in last year, the expectation was the project would be financed through to the end of 2020, and if there wasn't a successful application, the project would be over.

This public process at least means the project is on track, at least on those terms. But yes, they've taken forever to get to this stage, and the next stage of funding won't be simple either.

So if the application is successfully made in November as PY Gerbeau has implied it will be, then KEH will continue to finance the project?

 

[Matt N]

Sorry for double posting, but it would seem that the team behind the Resort have gone to extreme lengths to replicate a normal consultation process, as they even have a “virtual consultation room”, whatever that is: https://consultationspace.com/LondonResort/virtual-consultation-room/


Just as a warning, it won’t load on mobile devices.

 

[Alastair]

The welcome video isn't exactly the most professional!

 

[Swarm Chris]

So if the application is successfully made in November as PY Gerbeau has implied it will be, then KEH will continue to finance the project?

I believe it was a case of if an application isn't made or isn't successful, that's the point where they would cut their losses. So if successful you would have to assume they would want to keep with their original funding plan.

 

[Benjsh]

The welcome video isn't exactly the most professional!

To be fair what's been professional about any of this so far you could say. Why change now? Lol.

I get that there's people gagging for this to go ahead (i hope it does) but these kind of videos along with everything else don't exactly give you much confidence do they? The park map images with each themed area set out looked like it was done on Microsoft paint.

The image of their vision and company has been woefully presented so far which just backs up my fears this won't ever happen.

 

[Rick]

Please show me once where I'm wishing it to fail. Just one example will do. I have said throughout it would be fantastic if this place goes ahead. Who wouldn't want this to happen as an enthusiast?

That's what I took from this...

Hope someone asks them during the public consultation how much money have they received so far in investment. That should be the first question. If its less than 10% which I think it's very likely to be then that should be that. Stop wasting everyone's time.

My view has been and continues to be that all this stuff takes time and irrespective of whether they have the funding or not right now, that's inconsequential. It's a vast & complicated project. I don't think we're in the Dubailand space just yet!

 

[Matt N]

My view has been and continues to be that all this stuff takes time and irrespective of whether they have the funding or not right now, that's inconsequential. It's a vast & complicated project. I don't think we're in the Dubailand space just yet!

Not to mention that Dubailand’s failure was caused by a number of issues, the main one being the huge drop in oil prices (oil is one of the main providers to the UAE’s economy, isn’t it?) during the financial crisis meaning that there was far less money to actually bring anything to fruition than there was before. I think there was also a massive crash in property prices in Dubai as well, wasn’t there?

I think the situation in Dubai is quite unique, as the UK has a far more stable economy than the UAE that does not rely solely on one resource in the same way that the UAE does.

 

[Dave]

Not to mention that Dubailand’s failure was caused by a number of issues, the main one being the huge drop in oil prices (oil is one of the main providers to the UAE’s economy, isn’t it?) during the financial crisis meaning that there was far less money to actually bring anything to fruition than there was before. I think there was also a massive crash in property prices in Dubai as well, wasn’t there?

I think the situation in Dubai is quite unique, as the UK has a far more stable economy than the UAE that does not rely solely on one resource in the same way that the UAE does.

UK economy is almost completely reliant on the service sector which is currently taking a huge hit (we are also in a recession).

I would love a park to come along and challenge Merlin in the UK but we have seen this all before from the London Resort (this is their 2nd go at a public consultation). I don’t think complexity is the problem here, they just don’t have the investors.

Anyone with any knowledge of the industry knows their numbers don’t add up. Only 2 non Disney parks get more than 5 million guests a year in Europe and they have taken decades of development to get to that point, if the predicted guest numbers are dodgy what else is? If I was an investor I would be incredibly cautious about this.

 

[Benjsh]

That's what I took from this...



My view has been and continues to be that all this stuff takes time and irrespective of whether they have the funding or not right now, that's inconsequential. It's a vast & complicated project. I don't think we're in the Dubailand space just yet!

I don't think it's legit mate. In fact I'm almost certain from all I have read, seen and heard it isn't. It doesn't sound like a professional enterprise at all.

That doesn't mean I want it to fail. I'd love a world class theme park in the UK. It's badly needed. I just hope you guys don't get your hopes up with this stuff that's all.

 

[Matt N]

UK economy is almost completely reliant on the service sector which is currently taking a huge hit (we are also in a recession).

I would love a park to come along and challenge Merlin in the UK but we have seen this all before from the London Resort (this is their 2nd go at a public consultation). I don’t think complexity is the problem here, they just don’t have the investors.

Anyone with any knowledge of the industry knows their numbers don’t add up. Only 2 non Disney parks get more than 5 million guests a year in Europe and they have taken decades of development to get to that point, if the predicted guest numbers are dodgy what else is? If I was an investor I would be incredibly cautious about this.

They have repeatedly insisted that they have the financial backing to progress with the project. Gerbeau has previously said that they are not trying to raise any debt or equity, and that the project does not need funding to be raised by investors due to its owners.

Provided they can get the DCO application in by the end of this year (which seems to have been the cause of the numerous delays and setbacks), KEH have said that they will continue to back the project financially.

By 2024 (the current target date for the Resort’s opening), most indicators seem to suggest that the economy will have recovered to a reasonable degree (for example, air travel is predicted to recover by 2024, and I’m assuming a similar date is expected for other forms of foreign travel & tourism. The theme park industry specifically is expected to recover by 2022/2023.), so the developers currently have nothing to lose in pressing ahead with the project.

With regards to your point about the projected guest figures, Gerbeau said in the BBC Southeast interview that they are aiming for 4 million guests in the first year (roughly comparable with parks like PortAventura, and not a huge amount more than Legoland Windsor, the current leading park in the UK, got in 2019), so assuming that the waterpark takes up around 500,000-1.5 million of this (at a guess), that leaves around 2.5-3.5 million for the park. Given that PortAventura got 2.7 million guests in its first year in 1995 (and this may not even represent the first 365 days of operation), I’d say that this seems very much attainable.

The 12.5 million figure is not expected until 2038, by which point the completed Resort will have had around a decade of operation and growth. When you split this between all of the different attractions at the Resort (2 theme parks & waterpark), I’d say a 90:10 split between theme park attendance and waterpark attendance seems reasonable, perhaps slightly more weighted in the direction of theme park attendance. With that in mind, that leaves the two theme parks with around 11 million in targeted guest figures, meaning that they would get around 5.5 million each, assuming roughly equal distribution of guest figures. With a total 14 years of Resort operation and growth (assuming it opens in 2024), that also seems attainable to me; Disneyland Park in Paris grew by at least 3-4 million during this time frame, so it’s definitely not impossible with good investment over time.

With regards to the point about public consultations, I should stress that these are not a repeat of the ones conducted in 2014/15. These are the final stage consultations before submitting the DCO application, whereas those were early stage. This is evidenced by the fact that they have quite majorly revised the proposal using the feedback from these earlier rounds of consultations (for example, the Resort has been made quite a bit smaller, and targeted guest figures have gone down accordingly), and they have conducted in-depth reports since 2015 in order to determine how they can do this.

I don’t mean to sound like a broken record, I’m only compiling the evidence I’ve found so far through various sources. I’m not saying the project is certain to go ahead by any means (if 2020 has taught me anything, it’s that anything can happen), but to me, the evidence I see tells me that the chances of it coming to fruition are far, far higher than many think they are, and they’re growing with every positive step that occurs, in my opinion, no matter how small it may be.

Of course, you are all entitled to your own opinion as to whether you think it will happen or not, and I apologise if any of my evidence is wrong or if my post comes across rude or patronising, as that’s not what I intended at all. I was only trying to evidence my opinion a little, as I know I’m in a huge minority. I won’t claim to be an economist or have in depth knowledge of economics by any means; I’m only forming an opinion based on the evidence I’ve found and can see from those involved.
EDIT: Sorry for the really long post.

 

[Benjsh]

UK economy is almost completely reliant on the service sector which is currently taking a huge hit (we are also in a recession).

I would love a park to come along and challenge Merlin in the UK but we have seen this all before from the London Resort (this is their 2nd go at a public consultation). I don’t think complexity is the problem here, they just don’t have the investors.

Anyone with any knowledge of the industry knows their numbers don’t add up. Only 2 non Disney parks get more than 5 million guests a year in Europe and they have taken decades of development to get to that point, if the predicted guest numbers are dodgy what else is? If I was an investor I would be incredibly cautious about this.

Totally agree. Had they said they plan to be taking 5m guests a year by their 5th year you could maybe, just maybe, think they had a sensible plan.

They won't get 5m guests in the first year in a million years even if it goes ahead. Europa Park is a world class theme park, often rated number 1 in the world, and situated in a country of over 80m people and they get just over 5m after decades of trying.

It's nonsense to think they could top that in one year. Absolute nonsense.

 

[Tim]

I see Covid-19 being mentioned quite a few times as a reason this won't happen but if anything I think it could have the opposite effect. Tourisem is suffering at the moment but this project is not due for completion until 2024 at the earliest. By that point the effects of Covid-19 will have passed and tourism could be booming as a result.
On top of that the government are looking for big ambitious projects to kick-start the economy again. This is such a project, and long term potentially quite a profitable one.

If this project is ever going to become reality I'd say it's now or never.

 

[Craig]

They have repeatedly insisted that they have the financial backing to progress with the project. Gerbeau has previously said that they are not trying to raise any debt or equity, and that the project does not need funding to be raised by investors due to its owners.

Yes, they have backing to progress with the project, but not backing to just continue on after that and build the park. The exact quote from PY was:

“The project is well-funded by Kuwaiti European Holdings (KEH), which is part of the Al Humaidi family of Kuwait. The family holds the majority shareholding in the London Resort Company Holdings. We are not raising any debt or equity currently,”

Currently the project as it's referred to is getting the plans in place AND the investors on board to actually build it. Note that nowhere in that article (which is basically an advert begging for investment) does it state that no funding needs to be raised, just at present they're not looking to take on more debt whilst the planning phase is ongoing. That quote is in there to make reassure potential investors that they're not looking to burn through cash. As they shouldn't be with £55m+ already with nothing tangible to show for it!

Even London Resort's own website makes their funding plans clear:

"The London Resort is being delivered by London Resort Company Holdings (LRCH), which is majority owned by the KEH Group. KEH is funding the initial planning phase of the project, with further funding through a blend of equity, debt and asset finance sources."

Ride Rater actually did a very good article summing up the major concerns with this project, and what's happened to both current and past investors to this project. I'd encourage everyone to have a read of it, as there's been a lot of factual inaccuracies or old information quoted despite many past names pulling out of the project.

 

[Matt N]

Yes, they have backing to progress with the project, but not backing to just continue on after that and build the park. The exact quote from PY was:

“The project is well-funded by Kuwaiti European Holdings (KEH), which is part of the Al Humaidi family of Kuwait. The family holds the majority shareholding in the London Resort Company Holdings. We are not raising any debt or equity currently,”

Currently the project as it's referred to is getting the plans in place AND the investors on board to actually build it. Note that nowhere in that article (which is basically an advert begging for investment) does it state that no funding needs to be raised, just at present they're not looking to take on more debt whilst the planning phase is ongoing. That quote is in there to make reassure potential investors that they're not looking to burn through cash. As they shouldn't be with £55m+ already with nothing tangible to show for it!

Even London Resort's own website makes their funding plans clear:

"The London Resort is being delivered by London Resort Company Holdings (LRCH), which is majority owned by the KEH Group. KEH is funding the initial planning phase of the project, with further funding through a blend of equity, debt and asset finance sources."

Ride Rater actually did a very good article summing up the major concerns with this project, and what's happened to both current and past investors to this project. I'd encourage everyone to have a read of it, as there's been a lot of factual inaccuracies or old information quoted despite many past names pulling out of the project.

Sorry @Craig; I was confused, because I saw another article where Abdulla Al-Humaidi said that he “couldn’t wait to personally open the amazing facility in 2024”, which to me implied that KEH was providing funding for the project right through to completion. However, that obviously isn’t the case.

I think that the submission of the DCO application could be the thing that attracts investors, if they don’t already exist. The main stumbling block that has delayed the project over the last few years is the DCO application, so if that finally gets submitted, then that will presumably show investors that the London Resort means business.

There is the possibility that they already have some sort of financing plans in place to make the project come to fruition, however; we just don’t know.

Even if they haven’t gained investors yet, however (we don’t know whether they have or not), this is a perfectly normal way to go about planning a huge project like this one, as @Rick said.

 

[Rojo]

It was only in February when Ebbsfleet were hit with a transfer embargo because KEH didn't pay their bills and then were hit with a compulsory struck off notice (which was discontinued after they paid the bill) and further back in May 2019 the players were demanding meetings Dr Abdulla Al Humaidi and KEH over unpaid wages. Now Ebbsfleet have relegated (unfairly by .002 of a point) mostly due to the lack of investment from KEH

Nothing about KEH's involvement leaves me with warm fuzzy feelings when it comes to money promises, especially given their mishandling of Ebbsfleet. I would even suspect that Ebbsfleet is purely a vehicle to offset their losses against tax, much like Vince Dale does with Forest Green Rovers and his business Ecogreen. Maybe that's the plan with London Resort and Ebbsfleet but the football club could be out of business before the park even opens at this rate.