Here it is — the current age distribution of the United States population. Why is this interesting for theme park fans? Because it explains a lot of what has happened in this industry over the past couple of decades.
No one is born at age 5, so, absent a huge wave of immigration, a distribution chart such as this would be widest at the bottom, assuming a uniform birth rate in the country. The chart would taper very slowly as it moves up, due to deaths from accidents and unusual illnesses, until you get to the bars for people in their 60s and above, when they would begin to narrow more severely, as people die from more common causes.
But that's not what this chart shows. You can see a couple of prominent bumps here. The top one, for people in their 50s, shows the Baby Boom, representing people born between 1946 and 1964. The second bump, for people between 20-34, represents their children, the Gen Y "echo boom." My "baby bust" Generation X — people born from the mid-1960s through the 1970s — is sandwiched between.
Look below Gen Y, though, at the bottom four bars on the chart. That illustrates another baby bust — one that's be going on for almost 20 years now. The cohort percentages are getting smaller for each of the bottom three age groups. That means the current baby bust is accelerating.
What is the core market for the theme parks — the traditional foundation upon which the industry rests? Families with young children. And, for a variety of reasons, those have been getting more scarce over the past decade.
[FWIW, I would suggest the reasons are crippling student loan debt, the rise of the second housing bubble in many metro areas, and a decline in availability of full-time, benefitted employment. In other words: People don't want to get start families when they can't make end meet themselves. But that's another column for my other website.]
What does an industry do when its core market declines? Well, you adapt and either expand or change that focus, or you don't, and watch your sales decline. Over the past decade, we have seen two companies at the top of the industry excel at adapting to the changing American audience, and one company, especially, fail.
A change in population distribution isn't the only demographic change confronting the theme park industry. Income inequality also has swollen over the past several decades, leading to an increase of wealthy (and poorer) Americans at the expense of the size of the middle class. Theme parks long were the middle class' vacation destination, so a decline in middle-class households along with a decline in families with young children has created a dangerous double whammy for the industry.
Parks that want to thrive in this changing environment need to do two things:
1) They must find a way to appeal to older audiences, including empty-nesters and other adults without children.
The best way to do that in the theme park business is to develop attractions that focus more on entertainment elements rather than physical thrills. In addition, the entertainment elements should appeal across multiple generations. Rather than invest in creating new, unproven narratives, risk-averse parks instead turn to established franchises to theme these new attractions, such as Harry Potter, Pixar, Transformers, etc.
2) They must create plausibly exclusive and luxury experiences at higher price points to serve wealthier visitors.
That means new on-site hotels with concierge levels and premium transportation options, as well as extra park access and exclusive events for high-paying customers.
Who's done that well over the past decade? Disney and Universal. Which two theme park companies have pulled away from the rest of the industry in annual attendance over the past decade? Disney and Universal. This is not a coincidence. It is causal.
Ten years ago, Disney still had a big lead on the industry, but the SeaWorld/Busch Gardens parks stood next to the Universal parks in the industry's second tier in the United States. But while Universal has ridden its mastery of the two needs above to grow its attendance even faster than Disney, SeaWorld and Busch Gardens have fallen behind, watching their attendance slump as they have failed to connect with aging audiences with compelling IP or non-thrill attractions, and failed to develop compelling luxury experiences across their parks on any significant scale.
SeaWorld/Busch Gardens now rank with Cedar Point and Six Flags as regional amusement parks, content with getting by with drifting attendance as Disney and Universal ride the changing demographics in the United States to growing success.
Look, there are still millions of thrill-seeking teenagers in this country. And millions of middle-class families looking for a more affordable theme park experience than they can find at Disney or Universal. So there's plenty of money to be made running a thrill-based, regionally-targeted family amusement park. But if you want to see big attendance growth from one of these parks, it's probably going to come at the expense of another. The real growth in this industry overall is coming from parks that are expanding the market by appealing to older, wealthier and child-free households. (Or by avoiding America's demographic changes by expanding their business overseas.)
So the next time you see a news report about another dessert party or upcharge event at a Disney theme park, or a fancy new hotel rising at Universal Orlando, this chart above is what is driving that. You want to make money in this, or any other business? Then you gotta go where the money is. And these days in the United States, that no longer is with middle-class families with young children.
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