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Business Observer Friday, Jul. 29, 2011 10 years ago

Huge Fun

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Orlando becomes the first U.S. city to top 50 million visitors, thanks in part to Harry Potter and cheap flights. Those visitors are fueling expansion, and local businesses.
by: Dan Ping Editor/Central Florida

John Arie Jr. credits an unusual source for the boost in his business and the Orlando economy — wizards.

“Harry Potter kicked-started the Orlando economy, there's no doubt about that,” says Aria, who is chief operating officer at Fun Spot, a Central Florida-based attraction that features multi-level go-kart tracks, carnival thrill rides, arcades and carousels.

The Wizarding World of Harry Potter attraction opened in June 2010 at Universal Orlando's Islands of Adventure and brought a surge of tourists to the Central Florida area.

Universal Orlando reported a 20% growth in attendance in 2010 with 11.2 million visitors, up nearly 2 million from 2009.

Overall, Orlando saw the number of tourists jump 10.5% to 51.4 million visitors in 2010, up from 46.6 million in 2009, making Orlando the first city in the U.S. to top 50 million visitors in a single year.

For small tourist-related business owners like Arie, the increases are more than just tourism milestones.

Increasing thrice
The success of Harry Potter trickled down to attractions like Fun Spot.

“Last year was a record year for us. In fact it was a huuuge year,” says Arie, mimicking the company's catchphrase — “It's Huge” — used in local television spots.

Fun Spot is a privately held, family-owned business, and Arie declined to provide revenue numbers. He did reveal that 1.2 million people visited Fun Spot's two parks in Orlando and Kissimmee, a 5% increase over 2009. Through the first six months of 2011, Arie says attendance is up nearly 11%.

In part because of the strong rebound in tourism in Central Florida, plans are under way to triple the size of the Orlando park, Fun Spot America. The park is currently squeezed into a five-acre lot on Del Verde Way, a block off the busy tourist corridor of International Drive and less than two miles southeast of Universal Orlando.

Fun Spot recently purchased the 10-acre parcel of land just north of the existing park for $3.2 million from the Albert G. Hartog Trust. Arie says land was bought using company reserves.

Researching rides
Arie says his father, John Arie Sr. who founded Fun Spot, is currently on a research mission to develop ideas for the expansion. Arie Sr. is visiting small attractions throughout the U.S. to get a feel for what rides might appeal to customers.

“Our guests have said they are interested in water rides,” Arie Jr. says. “They're not asking for a water park, but they say they want some rides like flume rides. They want rides that get you wet and cool you off.”

Arie says some of the possibilities for the park include new go-kart tracks, batting cages, a paintball field, a Statue of Liberty-themed slide, a seasonal splash park and a 100-foot skycoaster.

Arie says the expansion will allow Fun Spot to add about 500 new parking spaces. The master plan should be completed by November, he adds. The total cost of the expansion has not been set.

“We don't know what the budget is going to be because we're still researching what types of attractions to add,” says Arie, who says part of the expansion will be funded by the company's capital reserves, with the rest coming from bank loans. “In our talks with the banks, we've been in the $10 million to $20 million range.”

The company is finishing the permitting process for a temporary employee parking lot on the new land. The expansion will occur over a five-year period, allowing Fun Spot to remain open during construction.

Marketing to visitors and locals
To be sure, Harry Potter is not the sole reason for Fun Spots' success during the recent recession. The company boosted its marketing budget by 40% in 2008. The bulk of the money is spent on television ads to attract locals.

The company also has an extensive network of hotel concierges and guest services workers who promote Fun Spots to out-of-town guests. Under the program, concierges provide visitors with a $10 voucher to Fun Spot. They can give the vouchers away or charge up to $5. Each participant is allowed to keep whatever money they receive.

Arie also credits his company's emphasis on customer service as a key component of Fun Spot's continued growth since 2002.

“We want to give our customers a great experience at a reasonable price, and we've never had a price increase,” says Arie.

More visitors, more jobs
The increase in visitation not only boosted local businesses like Arie's, it brought with it a jump in employment. Central Florida added 15,500 jobs in the tourism industry, half of 31,100 hospitality jobs created in Florida last year according the Agency for Workforce Innovation. The average hospitality job in Orlando pays $23,374.

Arie employs about 250 people during the peak summer months. He estimates he'll need to add another 200 people once his expansion is completed.

In addition, the increase in visitors has resulted in a nearly 16% increase in Orange County's Resort Tax collections. Through the first eight months of the fiscal year, the county has collected $115.8 million, some $15.9 million more than the same period last year.

Resort taxes — which are charged on hotel, motel and other short-term rentals — are used in Orange County to pay for expansion of the convention center and tourism marketing. They will also be used to partially fund a new performing arts center, the new Amway Center and renovations to the Citrus Bowl.

Arie says he is not surprised his business and the overall Orlando tourist market is rebounding after a weak 2009.

“If there were any city in Florida that was going to be the first to come out of the recession, it's Orlando,” Arie says.

Huge marketing efforts of Disney, Universal, SeaWorld and Visit Orlando, the region's visitors bureau, are part of the reason he says.

“Disney has done a phenomenal job of telling people that if you can only take one vacation, you should come to Disney and Orlando,” says Arie.

Cheap airfares also help. According to a recent study, Orlando is the third most competitively priced large airport in the U.S. behind Fort Lauderdale and Milwaukee, Wis.

“Business is good. We're in the right spot and the right town,” says Arie.

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