What is the outlook for theme park attendance this summer?
Last week, I had the chance to ride two great new attractions [The Simpsons Ride
, Toy Story Midway Mania
] that many of you seem to be looking forward to riding
as well. And this week brings a slew of new attraction openings, some of which we will be covering here on Theme Park Insider.
It's looking like a great summer for theme parks, right?
There's this little hitch called a "recession" standing in the way. Stock market guru Warren Buffett said that we are already there. With gas at more than $4 a gallon for 89 octane at the station down my street, many U.S. families won't be able to afford as expensive a summer vacation as they might have in the past.
The tourism business is very sensitive to the nation's economic health. You can substitute cheaper food when prices go up and incomes do down, but you can't quit eating. You still need to pay mortgage or rent. But you can ditch the summer vacation. That would mean fewer trips to theme parks around the country.
In reality, most people don't completely abandon their summer get-aways. But, like with food, they do substitute.
Last week, the Orlando Sentinel rounded up all the usual experts and found they were expecting a slight decrease in the number of Americans planning to vacation by car or airplane this summer. An overall decrease only tells part of the story. A Michigan family still might plan to drive to a theme park this summer, but costs might steer them toward Cedar Point for a weekend instead of Walt Disney World for a week.
Yet, as Americans stay closer to home, international visitors are moving in. The weak dollar is making a U.S. vacation a bargain for European tourists, and many are booking trips to the Orlando area, as the Sentinel story reported.
So the Orlando parks can look to international business. And the regional parks can look to recapture the locals who might otherwise have gone to Orlando. In Southern California, as the parks lose some middle-class visitors, they gain upper-middle-class locals who would have otherwise gone to Vegas or Hawaii.
Ultimately, what will determine how well a park moves the turnstiles this summer is its quality. Which is as it should be. Got something new that people want to see? (Like Toy Story, or The Simpsons?) The visitors will come. The demographics of where they are coming from (Michigan or Manchester) might change, but the overall numbers will be there.
The park managers that need to worry are the ones that failed to offer anything fresh this year. This is going to be an especially bad year to sell potential visitors on nothing more than nostalgia. That's an experience that's just too easy to substitute.
First I want to say I am so tired of hearing the word recession. The preliminary 1Q2008 GDP numbers are in and we had .6% growth. The growth was small, but it was still growth. So now in order for us to have a recession we would need negative GDP in the 2nd and 3rd quarter. As much as the media likes to perpetuate it, we are not in a recession. We may be seeing recessionary trends in certain areas of the economy, but it is not a
Official stats always tell you what life was like six-12 months ago. But business need to forecast what business will be like tomorrow and several months in the future. So for Q2 and Q3 of 2008, official recession or not, it's gonna be tough for a whole lotta businesses, and for those in the tourism business especially.
Tell you what, if I had not booked my Williamsburg (BGE) trip almost a year ago, I would NOT be going this year. The gas for the trip in my 2007 Toyota Sienna is gonna run me about $700. That is about twice what I had originally planned.
We made a commitment several years ago to take a big vacation at least once a year as a family. With that said, we plan well in advance for our vacation. That means money is set aside for the trip including hotel, travel by air or car, etc. As someone previously stated, our trip to BGE, Kings Dominion and touring Washington DC was paid for over 6 months ago. We're also planning a side trip to Disneyland for later in the Summer. With that said, I think regardless we would be taking a vacation. We always plan way ahead so that we are able to do something fun as a family together, away from home. I think if you plan well in advance, you will still be able to do some of the things you've done in the past. But if it becomes too much of a headache and you're having to sacrifice for a trip, it's probably better to skip it and plan for another year.
I agree with Deidre. We also try to plan to go somewhere each year and plan in advance. My husband is a Memphis police officer and each year his vacation days increase allowing us to plan way in advance our trips. Plus it gives us the flexibility to go during the value times everywhere and getting our flights at decreased rates. Our sons are only 3 and 1 years old so at the moment so we don't have worry too much on paying full price for them. You just have to decide what it is you want more. For instance do you want to buy the namebrand items and have full cable lineup for the year, or do you want basic cable and buy sell items to put the extra cash towards a nice summer vacation?
I think that the regional parks will do ok, as long as they have a good product. People in my neck of the woods tend to substitute the good local park flavor in Ohio for a couple of days in place of the big trip to wherever. I think that the same goes for most of the regional markets. I don't forsee a banner year for any park, but most will be fine.
For me, the most fascinating aspect of having increased overseas visitors TO the States is reading their reactions to the major theme parks, mainly from their reviews on TripAdvisor. The best ones are those reviews where they draw comparisons between parks in their native country and the ones here in the States, good or bad.
The key question is whether or not you believe the government reports about "5% inflation" when you've actually seen the prices of key commodities go up anywhere from 10 to 50% in the last 6 months. Regardless, we've seen how the big boys handle the economic fluctuations -- layoffs, discounting, ride "refurbishments" and the like. Perhaps the unpleasantness will shake some of the weaker players from the market...and strengthen the position of the industry dominators. We'll see. I'm holding on to my industry stock -- for the moment, anyway.
Like others have stated, I too plan well in advance. In fact I'm working on next year already, and unless gas prices come down, ya right, I'll be staying closer to home here in Pennsylvania. But for this year, I'll be staying in Disney World, which I booked last summer. Had I not promised my nine year old grandson, we'd go, I would have canceled this trip. But pap-pap's never ever break a promise, at least not this one. So on June 28th,come h-ll or high gas prices, we'll be on our way to Florida. See y'all down there.
Penn & Teller: Bullsh#t!, a Showtime series, had an excellent episode on the middle class. The media has fed us this heap about how the middle class in America keeps suffering, but there is sufficient evidence to say the middle class is doing better than ever. Properties are larger, cars are more luxurious, and families as a whole are taking more vacations. It's just that we feel we're suffering because nothing is ever enough.
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