By Gary Symons
TLL Editor in Chief
When the COVID-19 pandemic was first announced by the WHO in 2020, among the first corporate victims were those businesses that relied on in-person attendance. Among the hardest hit of all sectors were theme parks and other forms of experiential entertainment; in short, anything that relied on people travelling or showing up to a location in person.
But in recent months the experiential entertainment industry has truly shown its grit, posting impressive growth numbers, despite a global economic decline created by the Russian invasion of Ukraine, soaring inflation, and lingering after effects of the pandemic.
According to public filings of earning reports, theme parks have been posting greatly improved revenue numbers as life gets somewhat closer to what we used to call “normal.”
Disney, the granddaddy of them all, went from a near-total shutdown in 2020, then saw revenue rebound somewhat to $3.2 billion in Q2 2021, and then more than double to $6.7 billion in Q2 2022.
Competitor Universal Parks and Resorts also impressed as parent company Comcast posted a 151.9% increase in revenue for the division in Q1 2022, compared to the same quarter in 2021. Revenue rose from $619 million to $1.56 billion.
“Our recovery from the pandemic at theme parks has been fantastic and shows no signs of slowing down,” said Comcast CEO Brian Roberts, as he announced construction on a new park in Orlando, Fla., would resume.
Still given the tough economic climate, combined with ongoing uncertainty around a potential resurgence of the COVID-19 variants this winter, it’s undoubtedly a challenging time to be expanding a theme park business.
That’s what makes it so remarkable to see the progress of Falcon’s Beyond, an innovative company built by licensing and entertainment veterans, that has launched a building blitz in four countries.
Falcon’s Beyond already opened the well-loved and popular Katmandu park on the Spanish playground island of Mallorca back in 2007, but its current plans are far more ambitious in scope, and are based largely on its ability to create mutually beneficial licensing agreements.
In fact, the agreement that has allowed for Falcon Beyond’s aggressive strategy is a multi-year, multi-territory with the luxury resort giant Meliá Hotels International.
As a result of that and other licensing deals that import popular content into the Katmandu system, Falcon’s Beyond is currently working on a large new theme park at a Melia resort in the Punta Cana resort area of the Dominican Republic, and on three new resorts in the Mexican resort towns of Playa del Carmen and Puerto Vallarta, and in the sun-drenched Spanish island of Tenerife, part of the Canary Islands.
Given the challenges faced by the industry, we wanted to know how Falcon’s Beyond is pulling off this massive expansion effort, and the role licensing is playing in the company’s success. So we interviewed Daryl White, the company’s Vice President of Global Licensing & Business Development at Falcon’s Beyond.
The full interview follows.
TLL: What was it like for Falcon’s Beyond when COVID-19 led to lockdowns in many countries around the world, not to mention the decline in tourism?
Daryl White: Coming out of COVID, the interest in physical experiences is back up, but there has been a fundamental change in that there is a desire for a more connected experience among the various forms of entertainment, hospitality, and tourism. People have become very attached to their favorite IPs and want to experience them in a cohesive way among a variety of platforms, including online and streaming content, video games, location-based entertainment (LBE), themed destinations, and consumer products. At Falcon’s, this cohesive 360-degree approach is exactly how we developed our IP Expander flywheel; we are expanding a given IP across entertainment content, consumer products, and physical destinations. So now, we are very much set up for success.
TLL: Here at The Licensing Letter, we’ve seen this huge increase in experiential tourism, starting really in May or June of this year. Can you describe what has been happening for your properties, and how your business is doing as the pandemic is coming to an end?
Daryl White: We couldn’t agree more as to the demand in experiential tourism. Our property in Mallorca, the Sol Katmandu Park and Resort, is having a tremendous season and exceeding our expectations. Tourism in Punta Cana, Dominican Republic, where we are finishing construction on our Katmandu Park | Punta Cana theme park has been very strong, and we have had a great response to our recent announcement of Falcon’s Resort by Meliá, a new all-inclusive resortainment destination adjacent to our theme park in Punta Cana.
TLL: Falcon’s has a very different approach to experiential licensing, essentially activating your IP across all forms of licensing categories. Licensing deals aren’t that easy, so how is Falcon’s Beyond achieving this simultaneous licensing program?
Daryl White: It’s true that licensing deals aren’t necessarily easy, by their own nature. There are a couple of factors that we look at with any licensing partner to simplify the process. First and foremost is the culture with our partner. If we can’t have a solid, open and trusted relationship from the very beginning, then we would be setting ourselves and our partners up for failure. We aren’t looking for a “simple licensing deal,” we are looking for long-term true partners. Secondly, we want to be able to work with our partners across more than one lane in licensing. In licensing our IPs, we want partners to have broad reach in areas where they can add great value to their portfolios by working with us.
TLL: As opposed to revenues from guest visits, how important is licensing to the overall revenue picture for Falcon properties?
Daryl White: We foresee guests and fans interacting with a variety of our IPs in different areas of our properties and media content. With that, the opportunity for our partners is quite substantial to see a benefit in licensing as the exposure will be quite broad. We are definitely counting on custom merchandise and F&B sales to play a strong role in revenue growth.
TLL: Can you tell me or list the most important licensing agreements you have, and why those licenses are so important?
Daryl White: We are extremely excited to be working with our friends at PBS Kids and several of their most popular brands, including Dinosaur Train, Xavier Riddle and the Secret Museum, Odd Squad, and Wild Kratts! Likewise, we can’t wait to bring CoComelon and Blippi from Moonbug into our LBE venues as well as kids’ camps. With this combination, we are able to connect with children from one to 11 years old and enhance their family vacation and tourism experiences.
We have additional IP relationships we will be revealing in the near future.
TLL: What do you look for in a licensing partner?
Daryl White: Top priorities for us include the company culture, the quality of the IP and existing distribution network, the current foothold in the industry, and what the vision of the possible is for that IP. Going back to my previous comment, we want to be true partners in these ventures, and if we both work together with an attitude of trying to make each other’s businesses successful, then our own successes will come naturally.
TLL: Conversely, what do you offer your licensing partners?
Daryl White: We offer simultaneous 360-degree activation. We will go well beyond the expected to ensure that our partners have what they need to be successful in their endeavors. Not to mention, we have an absolutely amazing group of creative artists, writers and designers who can build on to our IPs to help expand the story and the fan connection points into multiple avenues with our partners.
TLL: Can you outline for us your overall growth goals as a company, and in general terms how you plan to get there?
Daryl White: Our company growth is set on a pretty amazing trajectory. Aside from our 22 years of designing and delivering amazing experiences for others’ IPs, we’ve spent the past four years planting the seeds of our current growth phase with our entertainment destinations through our expansion of the Katmandu IP into the site at Punta Cana, followed by a slew of other locations. Our relationship with Meliá Hotels International continues to blossom and we are working on a number of opportunities with them to bring “resortainment” to market. We’ve publicly mentioned locations in Tenerife, Playa Del Carmen and Puerto Vallarta as important steppingstones.
Building out our Consumer Products lane is absolutely another huge priority for us, and we have a few announcements in the pipeline on that front. We are super excited to be sharing opportunities to connect our propriety and partnered IPs across a whole range of toys, games, apparel and so on.
TLL: We’ve heard a lot about Augmented Reality and Virtual Reality blending into experiential entertainment. How do you see that happening as the technology develops? Also, what types of AR, VR, or metaverse activations has Falcon already been involved in?
Daryl White: We’ve been in the AR and VR world for quite some time. There are good and not-so-good ways in which these formats excel. Our approach, which we use for just about any experiential design project, is to first define the guest experience and then let the technology which best supports that experience float to the top. If a product or technology doesn’t yet exist which supports our vision for the experience, then our team in Falcon’s X-Lab will see if we can develop it.
A perfect example of this is our Falcon’s Vision AR system. We wanted to provide an AR experience for guests in a high-capacity setting which involved multiple non-trained guests picking up and using a piece of tech to view and hear a story. The only options we saw on the market were either multi-thousand dollar development units or ultra-low quality pieces which didn’t perform or just fell apart. We had an idea of how we could create a solution, followed through with multiple development rounds, and ended up with a robust product that works automatically every time a guest picks one up and provides better performance and Field Of View (FOV) than even the most expensive competitors.
Regarding the metaverse, this is something we’ve been working on for the past several years, before anyone was even using the term “metaverse.” We recently revealed our BeyondME platform with connects our physical locations, retail, F&B, video games, consumer products and other experiences using a customizable avatar and persona on a common platform.
TLL: For someone to understand Falcon’s Beyond as both an entertainment company and a licensing partner, what would be your core message to them?
Daryl White: Our goal is to connect people with their favorite IPs across as many touch points as possible. We know that the way people consume content is changing—they want to be connected at all times, and we want to embrace that through our true 360-degree approach to experiential design, entertainment content, and consumer products.