What is the outlook for theme park attendance this summer?
Published: May 20, 2008 at 9:25 AM
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.