Rating Manual section 6 part 3: valuation of all property classes

Section 70: amusement parks and theme parks

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This Instruction applies to all Amusement Park and Theme Park premises.

Amusement Parks and Theme Parks vary considerably and are frequently individual in nature. They form part of a spectrum of leisure attractions containing pleasure piers, amusement parks, zoos and safari parks and theme parks. Often distinctions are not clear cut, as can be seen by the gradual metamorphosis of Chessington Zoo into Chessington World of Adventures.

“Theme Park” is an American term, originally describing a park where attractions centred around a theme or themes. Over time this term has become widened to cover large leisure parks, generally, although not always, situated on inland sites and containing a significant number of different “white knuckle” or “pink knuckle” rides. There are also a large number of ancillary attractions, stalls, retail and restaurant facilities etc.

The British Association of Leisure Parks, Piers and Attractions (BALPPA) distinguishes theme parks from amusement parks (“traditional parks”) on the basis of pricing policy. A theme park will charge a single entry fee per person, with all rides thereafter included in that price, whereas an amusement park will allow free or nominal entry but require payment on a ride by ride basis. Whilst not definitive, such a distinction provides a useful guide.

Amusement parks were traditionally associated with coastal resorts although the increase in inland theme parks, resulting in the upgrading of many coastal amusement parks to compete, has led to the distinction becoming blurred. Over more recent years farm diversification has led to Farm Park attractions. There are a few instances where these have been developed to such an extent that there may be little to differentiate them from a small theme Park. Refer to section 385 Farm Diversification for the approach to Farm Parks.

2. List description and special category code

Amusement parks

List description: Amusement Park and Premises

Primary Description Code: LT4

SCAT code: 012, suffix S/G

This is a split class of property with Specialists in each Business Unit valuing the more complex and larger properties.

Theme parks

List description: Theme Park and Premises

Primary Description Code: LX

SCAT code: 280, suffix N

This is a national specialist class of property dealt with by the National Specialists Unit.

3. Responsible teams

Paragraph 2 above details the team/s responsible for each of the classes covered by this Section.

4. Co-ordination

The Class Co-ordination Team has overall responsibility for the co-ordination of these classes. You can find contact details here (P:\CEO1\Intranet\Reval 2017\VP & CCTs). The team are responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers and referencers have a responsibility to:

  • follow the advice given at all times
  • not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
  • seek advice from the co-ordination team before starting on any new work

Apart from the usual planning and licensing requirements associated with the operation of properties in these classes there are particular health and safety provisions that need to be adhered to.

The Health and Safety Executive works closely with the members of the Fairgrounds and Amusement Parks Joint Advisory Committee to improve standards.

The Amusement Device Inspection Procedures Scheme (ADIPS) ensures that amusement devices are checked for safety before they are first used and at least once in a 12-month period thereafter to assess their ability to operate safely throughout their working life.

ADIPS involves a series of pre-use and in-service inspections, and applies to all fairground rides and amusement devices. ADIPS is managed by the Amusement Device Safety Council (ADSC), which comprises all major industry trade associations, and is supported by the Health and Safety Executive (HSE).

Once all mandatory inspections are satisfactorily completed and a report has been issued an Inspection Body can issue certification known as a Declaration of Operational Compliance (DOC). An ADIPS DOC is widely accepted and recognised ride certification. With around 7,000 certificates being issued each year throughout the UK and accepted as the best practice means of demonstrating amusement device safety.

ADIPS Ltd. maintains a central database of registered amusement devices, their DOCs and inspections.

6. Survey requirements

Amusement parks and theme parks should be measured to Gross Internal Area (GIA) in accordance with the VOA Code of Measuring Practice. A site plan is essential showing the location of the different attractions. Site areas should also be measured.

Care will be needed to correctly identify and measure rateable plant and machinery, particularly having regard to any changes as a consequence of the Valuation for Rating (Plant and Machinery) England Regulations 2000,,SI 2000, No.540 and for Wales, Valuation for Rating (Plant and Machinery) Wales Regulations 2000 SI 2000,No. 1097 (W75). Monitoring of frequent changes to rides and facilities will be required.

7. Survey capture

In all cases plans and surveys should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

8. Valuation approach

8.1 Rental method

Rents may provide the best evidence of value although it is unlikely there will be much rental evidence available.

8.2 Receipts and expenditure method

Given the commercial nature of such enterprises use of the receipts and expenditure (R&E) method is the preferred valuation approach. Careful scrutiny of accounts and/or receipts information will be required and revenues or costs relating to other than the subject hereditament should be taken out.

Valuations arrived at using a full R&E valuation should be analysed as a percentage of gross receipts to facilitate comparison with other amusement and theme parks where full accounts are not available.

Care needs to be exercised to ensure that all income has been included. Where the subject is part of a group, eg Merlin Entertainments, sales of an annual ticket, which provides access to all sites in the group, may be accounted for in a separate company.

It is not unusual with these types of hereditaments to find concession occupations. Checks must be made to ensure that any such occupations are identified, terms of the concession understood and the appropriate income identified and valued correctly.

8.3 Percentage of gross receipts

This should be used as a method of comparison of valuations derived from a full R&E, and of valuing hereditaments for which full accounts are not available.

9. Valuation support

All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant Scat Code.

Additional support is available through:

  • Survaid
  • Class Co-ordination Team for Leisure Attractions

Practice note: 2017 - amusement parks and theme parks

1. Market appraisal

During the post 2008 recession the amusement and theme park sectors benefited from the trend of consumers with less disposable income staying in the UK for their holidays. Revenue growth outstripped rising admissions as operators made the most of the trend to visit attractions in the UK. This was achieved in particular by the major theme park operators through the addition of extras to increase revenue potential from visitors. As a result, people have increased their spending on premium tickets or virtual queuing options to avoid long waits for the rides.

Consequently the theme park industry came through the recession relatively unscathed. However, high overheads, such as electricity prices and staffing costs, have had an impact on the attractions’ operating margins. Staffing levels are high in theme parks and wage bills and staffing costs account for 20-33% of turnover.

Although a large number of attractions compete with theme parks, there are fewer than 20 major parks in the UK. Merlin Entertainments dominates, with its parks accounting for almost 60% of admissions and 70% of revenues. It has invested in its attractions with new rides, and its strategy of providing accommodation has also proved popular.

Reports suggest a 19% growth in total theme park revenue between 2009 and 2014, but when inflation is taken into account it means the market remains static. Individual sites will have performed differently subject to the level of investment undertaken by the particular operator. Any return to more holidaying abroad is likely to act as a drag on those that have seen strong growth in recent years.

2. Changes from the last practice note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach therefore is the same.

3. Ratepayer discussions

None at present.

4. Valuation scheme

Valuation guidance on these classes for 2017 is contained within Rating Manual: section 6 part 3 - section 1085 : Leisure Attractions: practice note 1 - 2017.

Practice note 1: 2010 - amusement parks and theme parks

1. Co-ordination

The responsibility for these classes is indicated below:

Amusement Parks Scat Code 012 SRUs deal with those over £25,000 RV, remainder Group
Theme Parks Scat Code 280 Theme Parks are dealt with by SRU

Responsibility for effective co-ordination lies with the Specialist Rating Units. For more information see RM : S6: Pt 1.

As a split class, the appropriate suffix letter for Amusement Parks should be either G or S, and as an SRU class Theme Parks should be S.

2. Valuation guidance

Valuation guidance on these classes for 2010 is contained within RM: S6: Pt 3: S1085 : Practice Note 1 2010 : Leisure Attractions.

This property is valued using the non-bulk server.

3. IT support

The development a new facility on the Non Bulk Server (NBS) should enable input of factual data to achieve valuations that follow the recommended approach for amusement and theme parks. All valuations should be entered onto the NBS under the relevant Scat Code.

Practice note 1: 2005 - amusement parks and theme parks

1. Co-ordination

The responsibility for these classes is indicated below:

Amusement Parks

Scat Code 012

SRUs deal with those over £25,000 RV, remainder Group.

Theme Parks

Scat Code 280

Theme Parks are dealt with by SRUs.

Responsibility for effective co-ordination lies with Specialist Rating Units. For more information see Rating Manual: section 6 part 1.

As a split class, the appropriate suffix letter for Amusement Parks should be either G or S, and as an SRU class Theme Parks should be S.

2. Valuation guidance

Valuation guidance on these classes for 2005 is contained within Rating Manual: section 6 part 3 - section 1085 : PN1.