The insurance crisis in the Australian amusement industry has intensified in recent years, leaving business owners and operators unsure about their future.
The Australian Amusement, Leisure, and Recreation Association (AALARA) revealed that amusement-related businesses have been facing 300% price hikes for their insurance over the past couple of years. Theme parks, for example, have struggled to secure affordable insurance coverage as public liability insurance prices have jumped from $150,000 to up to $1.5 million in the past four years.
Most recently, a Lismore City News report revealed that an inflatable attraction was forced to withdraw from the Royal Adelaide Show because it could not secure appropriate insurance. The Perth Royal Show added that other jumping castle operators have been facing the same insurance issue. Meanwhile, in Tasmania, the Royal Hobart Show has seen a gradual decline in attractions over the past four to five years, with showrunners expecting a further decrease in the next three years.
“They are smaller operators down here, and they haven't spent the money to invest in the infrastructure as what people on the mainland have,” a spokesman for the Royal Hobart Show said, as reported by Lismore City News. “We are definitely concerned about the impacts of the limited insurance options and severe increases in insurance costs that our amusement exhibitors are facing.”
The amusement industry employs over 7,000 people in Australia and contributes $1.84 billion to the economy.
AALARA vice president Damian De Jong said the amusement industry runs with only around 70% ride capacity, threatening family-owned amusement businesses.
“My kids now are starting to think about other things to do when this was the perfect opportunity for them to take over the next generation,” he said, as reported by Lismore City News.
Last year, Australian Small Business and Family Enterprise Ombudsman Bruce Billson claimed that an industry-initiated discretionary mutual fund (DMF) – which lets members pool their money to meet each other's financial risk obligations – was the only “workable and durable” solution for the industry's problem.
However, the industry may only set one up by relying on the federal government's loan of up to $5 million in “seed capital.” As a result, the AALARA will meet with the government to discuss their DMF pitch.
On the bright side, calls from the insurance industry and operators for other sectors have reached the Australian governments' ears. In the live music sector, for example, South Australia (SA) recently announced that it will launch a $10 million program to help it survive during challenging times.
