It’s been a crazy 15-plus years for the aerial adventure industry. The pace of growth, innovation, creativity, and popularity have been breathtaking. Understandably, the financial success of many aerial parks/tours has led myriad individuals and organizations to see aerial adventure projects as the long sought cash cow that could make their economic dreams come true. For many, it’s worked out just that way. Others, however, have encountered severe setbacks and sometimes, titanic financial loss.
Why do some ventures succeed while others fail? Having designed, built, and operated commercial aerial adventure courses for our own company as well as others, we’ve had the opportunity to see and experience the great, as well as the disastrous, and nearly everything in between. Through that process we’ve been able to identify—sometimes in quite exquisite detail—the unanticipated hazards that can turn the exhilarating plunge into a drowning nightmare. Many of these hazards are common to business ventures in general, but others are unique to our industry and its current stage of development.
A leap into aerial adventure ownership or expansion without investigating the unknowns is very much akin to swan diving into unfamiliar water—it might all work out splendidly, but it may not. Knowing what you’re getting into, based on very intentional research as well as engaging the expertise of the right people, will vastly improve your odds. So let’s see what potentially lies beneath the tantalizing surface of aerial adventure ownership.
Hey Look, Here’s Some Water!
Let’s start with the ever-critical question of “where.” At present, you can’t just build and expect guests will come. In the early days, picking a good site for a tour meant finding the best site available on the property you already had or had access to. If that property happened to be an hour from a city or population center, the attitude was, “Meh, no biggie. People will drive for the experience.” And at that time, they weren’t necessarily wrong.
Today, nothing could be less true in most markets. Watching the shift, both as a builder and operator, I have developed a few theories about the “why.”
Wow, That’s a Lot of People in the Pool
1. Simple market saturation is one major reason. Many major population centers or tourist destinations have an aerial adventure experience within close proximity, and some have several to choose from.
Only a certain percentage of a given population will want to take part in an aerial adventure experience. Entering a market with an already established aerial adventure experience will almost always be exponentially more difficult and considerably more expensive, especially in terms of marketing, than a viable market without an aerial adventure presence. And if the existing competitor has already established market dominance, or is much closer geographically to the population or tourism center than the proposed new location, the challenges as well as the required marketing budget will increase dramatically, sometimes to the point of making the whole endeavor non-viable.
2. Marketing has been one place where all but the most astute and savvy aerial adventure developers miscalculate costs. It’s not easy for a new or expanded business to gain attention. That’s why effective marketing is expensive. I don’t mean, “Oh wow, that’s a couple hundreds bucks more than I thought” kind of expensive. I’m talking “Holy cow, I could pay for a semester of college with what that one billboard costs for a year” kind of expensive. Marketing is a huge budget item that will only get bigger as market saturation continues. Consider that before investing.
Hey, Wait, I Already Swam Here …
3. Life cycle of an activity. Market saturation isn’t just about physical presence (i.e. every town in America having a zip tour or adventure park). There is also a psychological component to it. New and novel experiences, as well as new inventions and innovations, take time to get traction, and tend to have a life span to them. Entrepreneurs create something new, and then folks with an adventurous streak—the “innovators” and “early adopters”—jump in first. Over time, more and more people—the “early and late majority”—get in on the act. And once the product or activity has become commonplace and a known quantity, the category of folks often referred to as “laggards” (who would rarely venture into the unknown) wake up one day and think, “Hey, you know, I think I’m gonna put that zip line thing on my bucket list!”
This life cycle concept helps explain the obvious flattening of participation in aerial adventure experiences over the past several years. All new products and services experience it and must deal with it at some level.
So, what next? An activity’s lifespan can be long, spanning generations, or it can be quite short. Beyond the adoption model described above, each generation tends to discover its own favorite activities, which will ultimately cause an activity to rise or fall. If aerial adventure mirrors the course of, say, amusement parks, the lifespan could be quite long. If it’s more like bungee jumping or the hula-hoop, it could be much shorter.
If aerial adventure follows the latter path, or mirrors the European aerial adventure market, the overall industry is likely to shrink and consolidate around smart, well-established operations who have multiple experiences to offer, who do a good job of keeping the experience fresh and its presentation professional and high quality. My hunch is that operations that present as low-budget, stagnant, unprofessional, or quaint are not likely to survive.
The key point: More than ever before, it’s critically important to do serious homework regarding a potential course location or expansion. A thorough market analysis is essential. That includes local traffic potential, tourist numbers, why people visit that particular area, plus the cost of critical marketing assets and opportunities.
This process can be time-consuming and has a cost itself, especially if one engages knowledgeable professionals to assist with it (which is highly recommended). However, it’s a small price to pay should the process help sharpen the concept or reveal that the project, as conceived, will likely fail. And that analysis has become more difficult: sites that would have been judged an “A” site in 2010 might not even rate a “C” today.
The Swim Team
Besides the actual location itself, the next most important decision concerns your partner(s). Unless a partner is a known quantity, you must put the same level of effort and research into vetting potential team members or partners as into vetting a location. Potential investors, business partners, land owners/lease holders, designers, builders, and operational leadership can make the endeavor a joy or a nightmare. So do your due diligence:
• Ask for references, and actually check them.
• Talk to others who have worked with potential partners to see if they report a pattern of attitude or behavior that would be incompatible with your personality, values, and priorities.
• Spend time around them and be sure you actually like them and can imagine being in a long-term relationship with them.
If something concerns you, or if your gut tells you getting involved with an individual doesn’t seem like a good idea, trust your gut. I’ve never been sorry that I trusted my instinct about a situation or individual, but not trusting it has caused me more stress and hardships than I care to recall. An individual might be a fine person but a poor business partner, and the time to determine that is before you’re in business with them.
Wait, You Call That a Pool?
The above applies especially to the entity that you engage to plan, design, build, and train staff for your project. Course design and operational efficiency are central to the success of an aerial adventure business, so the course designer and builder is a partner of the highest magnitude. What the designer/builder leaves behind impacts every facet of the operation, and unlike many other aspects of business, you’re pretty much stuck with a course once it’s built. If it’s wrong, that can be disastrous.
Your builder needs the insight and experience to understand the dynamic of the market and patron demographics, as well as the staffing model and finances necessary to operate a given project. All the aspects of an operation—design, gear, staffing, participant flow, and throughput—are intertwined, and there are many ways to get it wrong. Missteps can range from simple things that make the course mildly inconvenient to operate, to huge design and construction errors that leave you with an expensive course that won’t pass inspection. It happens.
So it’s critical to choose a builder you can work and communicate with and you can stand to be around. Visit projects your candidate has built that are similar in nature to what you’re intending to build. If you have something completely unique in mind, make sure the builder understands just how different your idea is. Do your homework, don’t rush making a decision, and pick someone you can both trust and work with long term.
Better Read That Sunscreen Label!
Then, make sure you have very accurate, well-thought-out, and professionally reviewed contracts. Having thorough and precisely worded contracts for every aspect of the business relationship is critically important.
Think through the potential pitfalls, answering the “what if” questions, and then draft contract language that addresses those pitfalls. Good contracts make for good business relationships.
This applies especially to insurance contracts. Too often, entrepreneurs assume they have coverage that they don’t. Don’t assume anything. Read and ask questions of your broker or agent about all your policies. Will your course be covered in the event of a fire? What about natural disasters, such as a hurricane, tornado, or other wind event? Depending on the contract, any/all of these may or may not be covered. If your course is in the trees, are your trees covered in the same way that a pole or an artificial structure is covered? Ask the questions and make sure the answers are in writing. Otherwise, you could discover that you don’t have coverage for that specifically named (or not named) peril or loss.
To Dive or Not to Dive…
When all is right, aerial adventure ownership can be a wonderful, lucrative, feel-good business to be in. I love the fact that, over the past decade, we have helped hundreds of thousands of people face fears, have great experiences, and depart with great stories and photos to share. However, when all is not right, or the right questions aren’t answered or understood on the front end, it can be a devastating experience, both personally and financially.
So, ask the questions. Seek the expertise. Do the homework. If it all checks out, then dive in. If it doesn’t check out, be thankful that you saved yourself a lot of potential hardship, regret, and financial loss, and ultimately made the right decision.
Don Stock is president of The Adventure Guild, a Professional Vendor Member of the Association for Challenge Course Technology. Don has served the challenge course, zip line, and adventure park industry for 20 years, and is also the lead consultant for AerConUS (AerConUS.com), which provides professional consulting services for the aerial adventure industry.