How changing demographics are changing the theme park business

April 18, 2018, 8:09 PM · What started the theme park industry?

Even though amusement parks had been around for decades prior, many people likely would credit the opening of Disneyland in 1955 with sparking the development of the theme park business. In the years following Disneyland's opening, many developers and communities wanted to get into this business, and we saw the resulting openings of Busch Gardens, Six Flags, SeaWorld, the Great America parks, Kings Island and Dominion, the expansion of Knott's Berry Farm and Cedar Point, the development of Universal Studios in Hollywood, and the eventually the opening of Walt Disney World.

While Disneyland certainly provided not just inspiration but also a template for all those other parks, I don't think many of them would have been successful without the market created by the nation's Baby Boom. So I'd like to argue that the Baby Boom is the real initiator of the theme park industry.

The surge of children being born between 1946 and 1964 created a huge market for family entertainment, which theme parks helped to satisfy. It's telling that the development of new parks slowed in the mid 1970s, continuing through the 1980s, as the Baby Boom gave way to the baby bust of Generation X (roughly 1965-1978). But an "echo boom" as the Boomers began having children of their own helped spark a second wave of attraction development in the 1990s, led by the opening of Universal Orlando and the expansions of Walt Disney World and Disneyland.

Remember when Vegas was trying to become "family friendly" and open theme parks, too. That was the echo boom, or Gen Y. (Or Millennials. The vocabulary gets fuzzy after a while.)

So what's happening now in the business? After Gen Y petered out around the mid-1990s, we have entered what's basically been a 20-year-and-counting second baby bust in America, as the smaller Gen X cohort entered parenthood, followed by the oldest Gen Y'ers turning away from parenthood due to a wide variety of economic factors, including the pressure of repaying ever-growing student loans, the difficulty of finding secure, long-term, benefitted full-time work, and a couple of housing bubbles.

Take a look at the "population pyramid" for the United States. Assuming a constant birth rate, you would see a pyramid (as the name implies) as mortality claims an increasing number of people as cohorts age. But we see a couple of bulges in the US data, the first being the Baby Boomers (aged 53 to 71 in this chart) and the second being their kids in Gen Y (ages 21 to 38).

US Population Pyramid

As we saw in the theme park industry in the early 80s, baby busts can be a very bad thing in the theme park industry or any other business than caters to families with young children. I wrote about the challenges of demographic changes to the theme park industry in my Orange County Register column this week, Disneyland aims beyond families with its Pixar Fest.

Ever wondered why so many parks now seem to be embracing food and wine festivals? Or expensive up-sell experiences including booze-inclusive dessert parties and line-skipping passes? It's because parks need to make more money from older consumers as they have fewer families with kids coming through the front gate.

And this change in demographics is one of the reasons why Disneyland is promoting Pixar Fest with the tag line "Celebrating Friendship & Beyond." If Gen Y and Gen Z fans aren't having kids that they eventually will bring to the park, perhaps Disney can lure those fans to keep visiting with their friends, instead.

Disney has been working for years to broaden the appeal of a Disney vacation into something for people of all ages and family situations. Pixar Fest just provides latest example of Disney making explicit that broader focus — in this case, to visiting with friends.

Yes, the theme park industry is growing. But much of that growth is happening in the emerging markets of China and the Middle East, not here in the United States. This is literally a mature market, and parks that want to continue to grow will need to do so by broadening their focus beyond family entertainment to something that adults without children (or whose children have grown and left home) and continue to enjoy.

So which parks and chains are making this transition well, and which ones are not? Let's discuss in the comments.

Replies (12)

April 19, 2018 at 2:37 AM ·

I believe Six Flags is now making a major move towards attracting an older audience. Their new membership offerings that include 2 fast passes, preferred parking, special seating at shows and other benefits for 18.10 a month versus 7.10 a month for regular admission is aimed at this group. I know I signed up for it because I love two rides at Great Adventure, the safari and Metropolis and the cost is only $131 a year for the extra benefits. The best part is as a stockholder it adds just about all of that 131 to porfits as it costs almost 0 to provide the extra benefits.

April 19, 2018 at 7:25 AM ·

Despite various baby booms and busts, the U.S. population continues to grow. A population of around 150 million in 1950 has grown to over 300 million in 2010, and this will likely increase to 400 million by 2050. That makes for lots of potential theme park guests.

April 19, 2018 at 7:41 AM ·

I don't think population surges and generational changes have much of an effect on theme parks. Guests didn't go to theme parks in the 90's because of the sagging economy at the time, same with the late 00's. I think the shift in marketing is a reflection of theme parks chasing higher profit margins. It has little to do with parks trying to broaden their base or to appeal to a changing generation. It has to do with parks, particularly Disney, realizing they can only squeeze so much money out of low-earning guests toting around kids. They understand that upcharging and providing "exclusive" experiences to higher earning, big spending guests, not only results in higher guest satisfaction, but higher profits. Disney doesn't need APs or value-conscious guests anymore to survive, like they did during past recessions. They would much rather tap deep pockets that are willing to spend whatever it takes to feel special every 5 years (or that once in a lifetime trip) or those so loyal to the Disney brand that they will pay whatever Disney says it costs to enjoy their parks (similar to what Apple has built).

I think generational changes have had some impact (the "me" generation/millennials) that has forced Disney (and some other parks) to cater to the type of guest that needs to feel special and unique, but the result of that has come with the change in the type of guests frequenting theme parks today. I think at some point, a theme park chain will open a "luxury" theme park where admissions are extremely high ($300 or more per day), but lines are virtually non-existent, and the experience is unmatched in the industry. I think we already have one park that somewhat fits this mold (Discovery Cove), but I feel within the next 5-10 years, someone will build a traditional style theme park that is only accessible to the uber rich with luxuries and amenities that are more akin to a 5-star hotel than your local amusement park. The Star Wars hotel may just be a first step towards a theme park experience that costs upwards of a thousand dollars a day (with high end meals, collectible souvenirs, and photo/video package), but would be worth every penny to those willing and able to afford it.

April 19, 2018 at 8:45 AM ·

Back in my day, this means the early 70s, Disneyland meant go ONCE every 3 or 4 years. I was deprived then. Today, it means buy an Annual Pass and go every month. Today's Disneyland is much more aggressive with marketing and promotions. There's also more opportunities to spend your money. The theme park market in Southern California lagged the faster development elsewhere. It shouldn't have to be this way, but Southern California isn't just about theme parks. Orlando became the theme park capital, but Disney minimized attractions in favor of hotel resorts. Hotel amenities became a profit center. Food and wine was popular. Perhaps we can all benefit from the return to immersive attractions again as long as we can still afford to go.

April 19, 2018 at 8:53 AM ·

While Robert has a point that the increase of food and wine festivals and dessert parties may be related to the ebb and flow of the U.S. population, I agree more with Russell: companies are trying to increase their profit margin by attracting those from a higher economical class, and up-charge events are evidence of this.

In 1996, Ruby Payne published "A Framework for Understanding Poverty". In it, she compared the hidden rules among classes, comparing what was important to members of the lower, middle, and upper economic classes. In regards to food those in the lower economic class tends to value the QUANTITY of food (Is there enough?), middle class members value the QUALITY of food (Does it taste good?), and upper class members value the PRESENTATION of food (Was is presented well?). When I see pictures of fancy desserts, higher end dining, and creative alcohol concoctions at Disney and other parks, these options are being made specifically to get more people with more money in the parks and fewer people with less money out of the parks.

Also supporting this is Payne's thoughts on social emphasis. Where a lower economical class person emphasis is being with people they like, the upper class emphasizes EXCLUSION rather than INCLUSION. Sounds a lot like an up-charge event, doesn't it?

April 19, 2018 at 11:03 AM ·

@TwoBits - I REALLY agree with your explanation. And it seems quite spot on. Look at almost any menu from a Disney "sit down" dining experience and it has considerably gotten fancier over time. It's what we lovingly refer to as "Foo-Foo Food" because we're "hot dog and chicken strip" people. We actually have trouble finding food we understand and will eat! :D

I too agree that this seems more looking to increase revenue than it does with population. We don't have kids but we still love going to theme parks even without the upsell or exclusive events.

April 19, 2018 at 12:00 PM ·

I think it has to do with going up. The baby's became older but stil wanted that fix. With higher disposable income due to no (or lesser) children they can afford it. It's unfortunate when theme parks like the Disney company going that route on expense of the experience of their regular guests. I'm afraid this short sighted, short term money grabbing tactic will bite them in the butt eventual. Sure they need to serve that demographic but they have to create separate, non intrusive experiences (like club 33).

April 19, 2018 at 7:09 PM ·

Thanks to access to credit we can all enjoy all that our theme parks have to offer, disposable income or not.

April 19, 2018 at 10:25 PM ·

Great advice Stevo! Can't afford a trip to Disney World? Just get yourself into credit card debt and have the time of your life!!

I do believe one of Robert's (very valuable) tips for taking a vacation is having it paid for BEFORE you leave.

April 21, 2018 at 8:28 PM ·

Aren’t we looking at this too scientifically? Major IPs have proliferated over the last 20-30 years and the main ones are forced fed down our throats. Theme parks have incorporated virtually every major IP which, in turn, has driven attendance and shaped demographics. Baby boom, millennial, gen whatever...... come on. Nobody is too old to have a good time at a major theme park as expendable money is the real driver.

April 21, 2018 at 8:28 PM ·

Aren’t we looking at this too scientifically? Major IPs have proliferated over the last 20-30 years and the main ones are forced fed down our throats. Theme parks have incorporated virtually every major IP which, in turn, has driven attendance and shaped demographics. Baby boom, millennial, gen whatever...... come on. Nobody is too old to have a good time at a major theme park as expendable money is the real driver.

April 22, 2018 at 4:37 PM ·

I've been at Shanghai Disneyland this week where pretty much all the major attractions are IP except for Roaring Rapids and Soarin - easily my two least favorite "major" attractions in the park, and didn't even notice until after I left.

Disney is very much a brand centric company, pretty much everything they do revolves around its major brands (Disney, Pixar, Marvel, Star Wars, ABC, ESPN). If it weren't working i'd say they have a problem but the "Iger strategy" has been hugely successful for them. I don't see any problem with it.

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