Abstract
The American themed amusement park industry—begun in July 1955 by Mickey Mouse, the famous Disney character—has evolved into a multibillion-dollar travel and entertainment segment that draws visitors from around the world and has spawned many imitations. This chapter sketches the economic outlines of amusement/theme parks—which may be broadly defined as capital intensive gated attractions that contain rides and/or shows in a themed environment.
Mickey is the mouse that roared.
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Notes
- 1.
Actually, the oldest amusement park is Bakken , just north of Copenhagen, which began attracting visitors in 1583. See Amusement Business, March 3, 1996.
- 2.
The first true U, S. amusement park was Steeplechase Park at Coney Island , which was opened in 1897 by George Tilyou. Luna Park , in competition with Steeplechase and Dreamland, in 1904 attracted four million people—a remarkable number for that time (Nasaw 1993, p. 85).
- 3.
- 4.
The 160-acre site for Disneyland was selected by the Stanford Research Institute.
- 5.
In attempts to emulate Disney’s concepts on a smaller scale, the Marriott Corporation , Taft Broadcasting , Six Flags , and others began a construction boom that lasted throughout most of the 1970s. A total of at least $500 million was spent in the construction of parks such as Busch Gardens Old Country, Great Adventure, Kings Dominion, Great America, and Canada’s Wonderland. As of 2014, the largest corporate park operators after Disney in terms of total admissions are Sea World (also including Busch Gardens Tampa, Florida, and Williamsburg, Virginia, and Aquatica); Six Flags ; Cedar Fair (Kings Island, Kings Dominion, Canada’s Wonderland); and Universal Studios (Orlando and Los Angeles). In 2011, Comcast bought Blackstone’s share of Universal Studios Florida for around $1.025 billion. Blackstone bought the Anheuser parks in 2009 for $2.7 billion. And Cedar Fair was acquired by Apollo Global Management in 2010.
- 6.
That was followed by an initial investment of $1.1 billion to open the EPCOT Center in 1981, as well as $500 million for the Studio Tour, which opened in 1989.
- 7.
A subset of the themed amusement business involves regularly scheduled state fairs and regional expositions . These fairs are, in essence, movable, impermanent theme parks that have operating characteristics similar to those of permanent facilities. According to compilations by Amusement Business, the industry trade journal, in 1999 the top 50 fairs attracted a combined attendance of 45.5 million. However, because only about 60 % of all admissions are paid, the industry generates less than $200 million at the gate. Several times this amount, however, is derived from activities conducted within the fairs. Water parks, another subset, have also become popular, with more than 30 million people visiting the top 20 global facilities. See also Lyon (1987).
- 8.
A study by the consulting firm Economics Research Associates indicates that, in the year 2000, 340 parks worldwide generated a combined attendance of 545 million and revenues of $13.5 billion, with North America accounting for 49 % of all revenues. The data include North American parks with attendance greater than 500,000 and “significant” parks elsewhere. In the 1990s, the number of parks and revenues approximately doubled and attendance grew by 80 %. See Amusement Business, January 10, 2000.
- 9.
Location-based entertainment is a term that has generally been used to describe ride-simulator theaters and advanced video-game arcades built in urban or suburban shopping centers. However, LBE would also describe theme parks, movie theaters, themed restaurants, sports stadiums, or casinos.
- 10.
A number of major European parks date to the early 1900s. As shown in Brown and Church (1987), Alton Towers in the United Kingdom was opened in 1924 and Kantoor (Duinrell) in the Netherlands in 1935.
- 11.
Both traditional carnival-type games and electronic video games also generate high marginal profits.
- 12.
The industry speaks of design days, which are used to estimate the times of occurrence and peak attendance capacity. Design days in the seasonal parks might normally average 1–2 % of the annual expected attendance, and estimates would be based on the number of weekends, holidays, and special events that occur in a specific month. Hourly operating capacity is also of importance and is related to the number of “entertainment units” in which the average visitor participates per hour. In most parks, the average guest might participate in 1.5–2.5 entertainment units (i.e., rides, parades, and other attractions) per hour. See McClung (1991), Barnes (2010), and Wanhill (2013).
- 13.
The number of visits to ski resorts has not recently grown much even while the industry has been powder-deep into consolidation. However, since the mid-1980s there has been a decided shift away from downhill skiing and toward cross-country skiing and snowboarding, which attracts younger and less wealthy participants. Although there is no reason to think that skiing and snowboarding will become less popular any time soon, it would seem that the major companies (including Doral International, Intrawest, and Vail) will likely find that much of their growth will come from acquisitions, provision of more lodging and entertainment activities, greater development of vacation home villages, and stronger brand marketing to families and to skiers based abroad. Excluding equipment, personal consumption expenditures on skiing totaled around $4 billion in 2015.
Given that an estimated 15 % of all golfers are residents of a golf course community, as much as one-third of all new course construction is tied into some type of lodging and/or residential project development. The number of golfing participants in the U.S. (about half of the world’s total) has not grown over the last decade, and the number of courses has actually diminished, as debt-fueled expansion in the early 2000s could not be sustained and constraints on time and income availability for play increased.
However, with approximately one-third of all U.S. golfers being over the age of 40, it seems likely that the number of participants in North America will again increase modestly. In all, personal consumption expenditures for playing fees and equipment likely amounted to $10 billion in 2014, but with an important slice of this spent on daily fees at private and municipally owned courses (which together amount to around 65 % of all courses). The largest gains in participation rates will instead probably be seen in the more rapidly expanding Asian economies. Hotel operators Hilton and Marriott as well as REITs (e.g., National Golf Properties, Golf Trust of America, and Meditrust) own and/or operate golf courses.
- 14.
Because camping and tennis resorts are more geographically dispersed, require much less capital investment per facility than ski or golf resorts , are smaller, and are much less well-defined for purposes of this section, they are therefore not further discussed.
- 15.
Particularly in the case of smaller parks, it is conceivable, though not likely, that operation of the park will turn out to be merely an interim holding action in anticipation of the maturation of higher-value alternative uses. In such instances, the park would be worth more dead than alive.
- 16.
Some examples include transactions by Taft Broadcasting, Marriott, and Bally Mfg. in the 1980s, Six Flags and Time Warner in the 1990s, and Blackstone Group Partners involving Universal Studios and Sea World acquisitions in the early 2000s. And Cedar Fair was acquired by Apollo Global Management in 2010.
- 17.
See Kolesnikov-Jessop (2009).
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1 Further Reading
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Vogel, H.L. (2016). Amusement/Theme Parks and Resorts. In: Travel Industry Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-27475-1_6
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