2006 Theme Park Attendance Numbers
A Quick Sketch of The Global Picture
Overall, the 2006 numbers point to stability and moderate growth, showing a worldwide attendance increase of 2.2%. In all tallies, few parks have changed position from 2005. Disney remains the leader, topping the worldwide list and all regional lists except Mexico/Latin America. The latter market is less developed compared to North America and Europe because of a disparity in income levels and a more moderately-sized middle-class population (although growing).
Nonetheless, several years ago this region introduced a most promising new product type in La Ciudad de los Ninos (Kidzania), a unique facility set up as a functional mini-metropolis in which children role-play at being working adults. This Mexico City innovation has begun to have sister facilities worldwide, most recently in Tokyo. Asia is experiencing stronger growth, especially dramatic in China where the middle class is expanding rapidly. Several major attraction projects are in the pipeline in the region including a Universal Studios theme park in Singapore in 2010.
European parks are being wellmaintained and replenished by continuing private investment.
Some Key Figures:
* 119.8 million: Total visits to the Top 20 parks in North America in 2006, representing growth of an estimated 1.5% compared to the previous year.
* 59.2 million: The 2006 attendance total for the Top 20 parks in Europe, representing a growth rate of 1.9% compared to 2005 (higher than the comparable US growth rate for the same period).
* 11 million: Visits to the Top 10 parks in Latin America for 2006. This number is estimated to be flat or slightly down compared to 2005, tempered by a couple of parks in Brazil and Mexico having performed very well.
* 68.3 million: Visits recorded for the Asia/Pacific Top 10 parks in 2006, up 4.4% from 2005. The increase is mainly due to the opening of Hong Kong Disneyland and a record year at Ocean Park.
* 11.8 million: Visits for the Top 15 waterparks in the United States in 2006, up 2.5% from the previous year. Several new entrants on the list helped to achieve this healthy growth figure.
* 186.5 million: Total attendance for 2006 among world’s Top 25 parks (parks with attendance above 3.9 million), up 2.9% from 2005.
* 2.2% growth: Percentage by which the report found that worldwide theme park attendance continued its growth from last year.
Attendance
2006 Theme Park Attendance Numbers
Investing in A Family Tradition
“The basic purposes of a theme park visit—a family outing and interaction as a group—haven’t changed,” observes Christian Aaen, senior associate in the Los Angeles office of ERA.
The simplicity of a family coming together in a safe and secure, attractive and unique themed setting remains the fundamental magnet— whether to enjoy a thrill ride, see a show or simply amble among landscaped paths and eat ice cream. The setting and its details are key. Wise operators are making sure their environs are top-notch and up to date. “Rule number one in the theme park industry is ‘Thou shalt reinvest,’” says Ray Braun, senior vice president of ERA in Los Angeles.
Adding new rides or zones that address families will tend to result in a higher attendance impact than improvements with a more specialized or niche appeal. “If you go for the broad market, adding a major ride or ‘land’ to a park can bring a 5%-10% increase in attendance,” confirms John Robinett, senior vice president of ERA in Los Angeles. The 2006 numbers bear this out. Attendance increases of better than 4-5% were seen at parks that added major family-oriented improvements, such as Disney’s Animal Kingdom (Expedition Everest), Sea World (“BELIEVE”) and Legoland California (Pirate Shores), among others. The latter is credited for a stellar 16% attendance boost. “Legoland California was a top performer this year,” notes Aaen.
“The $10 million spent to create Pirate Shores represents a significant reinvestment that hit critical mass and then some.” [See Notes for more on Legoland California.] He adds, “Sixteen percent is all the more impressive because in North America, where the industry is mature, double digit growth is rare.” According to Robinett, “We’ve passed where we were before 9/11 and moved into a phase of steady, modest growth. An increase of 1% to 5% is a good year.”
Along with Legoland, Disney’s Animal Kingdom beat those odds, with an 8% surge in attendance.
The Role of Technology
Integrating technology into rides, games, shows and attractions in creative, modern ways—as all the above-mentioned facilities do—helps a park stay relevant to the contemporary market. The bar continues to be raised in terms of the quality of guest experience that can be provided by integrating audiovisuals, lighting and effects, show-control technology, theater technology and modern fabrication techniques with ride elements and great design. At the same time, the relative cost for such packages is more and more within reach of the mid-size and smaller parks.
Operators also are applying sophisticated technology to enhance the guest experience and make the park environment more interactive in customized, personal ways. Interactive and wireless technologies (Wii,RFID badges and kiosks, others) are finding their way into family entertainment centers (FECs), attractions (MagiQuest, Kidzania, Negone), resorts (Great Wolf Lodge) and children’s museums. Nintendo’s Wii video game system has become the official gaming console of Six Flags parks, through a recent sponsorship and marketing agreement.
Adding a new ride, attraction or zone is a proven way to add value and revenue, now occurring across the board. “The trend, which started with larger parks that added a second gate or an entertainment retail zone, has shifted downward and smaller-scale parks are now benefiting from the same approach,” explains Robinett.
Other land uses are also important in preserving and adding value. Basic curb appeal counts: the kind of investment that keeps the entrance area of a park looking fresh and well- kept is not lost on guests. “You can’t neglect central operating expenses and continue to perform,” says Robinett. And increasingly, parks are implementing what Robinett calls “pre-emptive development of peripheral land”—taking an interest in the neighborhood to ensure quality accommodations and services, as well as aesthetic consistency.
“You want to preserve the visitor experience, establish an entry sequence, and have it be of your design,” notes Robinett. “If you don’t pay attention you will suffer in the long term.”
Regional & Cultural Factors
Reinvestment can also include expansion into new regions. In Asia, the industry is experiencing its fastest growth, geographically. The Hong Kong government is actively promoting the area as a family destination and Hong Kong Disneyland, which opened in 2005, is the latest global extension of Disney’s brand. Its first full-year run in 2006, plus growth in Disney’s Orlando parks, are the main factors in Disney’s 6% attendance increase as a chain.
A new Disney park brings significant competition to the existing entertainment operators of an area, and in the case of Hong Kong Disneyland, Ocean Park has faced the challenge by masterplanning a $700 million redevelopment to take place over the next several years, and by making the most of certain regional advantages.
“With the borders opened up, there’s been a strong market in daytrips from China, which Ocean Park knows how to cater to very well,” observes Aaen.
“Between the tour groups, good marketing, park upgrades and lower price points, Ocean Park had a record season. Knowing your local market is always an advantage—and the longterm reinvestment will enable Ocean Park to continue holding its own.”
Braun drew a parallel with the approach taken by Parc Asterix when Euro Disneyland opened near Paris.
“Asterix repositioned itself more strongly as a local attraction and reaped the natural advantages of cultural and regional loyalty.”
Cultural sensitivity and redevelopment have enabled Happy Valley, the most-attended theme park in China (2.9 million visitors in 2006), to also remain competitive with Disney’s entry into the market. Happy Valley recently added a new waterpark section and has future improvements on the drawing board. Whereas the Japanese like Western-style thrill rides and well-stocked gift shops, the Chinese are partial to mini-worlds, landscaped areas and cultural shows.
Happy Valley excels in these areas while expanding its range through selectively adding major rides. “They have the formula down,” says Aaen.
Braun concurs: “Happy Valley is the top performer of the Overseas Chinese Town [OCT] chain.” Owneroperator OCT’s properties also include Wonders of the World and Splendid China Folk Village in Southern China, plus another Happy Valley which opened in Beijing in 2006. Combined, the OCT parks accommodate some 7 million annual visits. There are plans to expand into Shanghai and other locations.
Reinvestment requires reinvestment capital, and if a chain is burdened with excessive debt and underperforming properties, it must first divest itself of these. The Six Flags chain is in the midst of this process as this report is being written. “The problems are known,” says Robinett.
“Their investment was spread too thin. The job at hand is to focus and recalibrate: focus on the best parks, take down the debt load, reposition the brand, improve the guest experience, broaden the market appeal. You’ve got to generate capital to do all that.”
Extending the Range, The Stay and the Calendar
Categories throughout the industry are blurring on all continents as parks add second-gate attractions and hundreds of hotel rooms, and otherwise expand in ways that transform them into integrated resorts capable of operating yearround or nearly so, with increasingly diverse revenue streams. In the US, the second gate waterpark added several years ago at Dollywood (Pigeon Forge, TN) grew sufficiently to land it in the waterparks’ Top 15.
Mainstay waterparks operator Schlitterbahn added its third park (Galveston, TX) and, with indoor and outdoor components, welcomes guests 10 months of the year.
The integrated resort is a season extender and in some cases, it can also be the means of introducing a lucrative component that might not appeal to the community as a standalone. For instance, parts of Singapore are being opened up for the first time for gambling in this context. On Sentosa Island, a major tourist and family destination, the first integrated resort will soon appear (2010) contained within a larger, family-themed resort being developed with Universal Studios. The Sands casino (Las Vegas) is involved in developing Marina Bay, an urban, integrated casino resort in downtown Singapore to open in 2009.
The resort approach also points to ways of extending the length of the operating day. “There’s a media infusion across all experiences that can be used to broaden the appeal of a destination,” explains Dan Martin, VP of ERA’s Chicago office. “Music, sound, and lighting packages can be programmed and cycled to attract different age groups at different times of day and night.”
The growth, success and business creativity of indoor waterpark resorts—of which there are currently about 40 across the US—invites study. They are not turnstile attractions; they distribute a certain number of passes per room night booked. (That makes it difficult to gauge actual park visits, and has kept them from being listed in these attendance tallies.) Todd Nelson’s family- and business-friendly Kalahari resorts in the US boast some of the world’s most extensive indoor waterplay attractions in combination with hotel and convention facilities plus retail, restaurants and condominiums.
“If indoor waterparks were on the Top 15 list, Nelson’s would be there,” says Martin. “And the Wilderness Hotel and Golf Resort in Wisconsin Dells would be right behind them.”
Potential age-range appeal within waterpark resorts is especially broad and resorts are making the most of it by offering such diverse experiences as hydrotherapy and spa facilities; open-ended adventures that are not physically demanding (i.e. lazy rivers); specialized areas that accommodate more challenging activities such as surfing wavepools; thrill providers such as water coasters and centrifugal force rides; and spray pads and wading pools for the youngest guests. “Everyone likes to play in the water,” observes Martin.
European parks have a method for extending the season that has little to do with adding infrastructure: the Christmas market. Denmark’s Tivoli Gardens, Germany’s Europa Park, Sweden’s Liseberg Park and Italy’s Gardaland are among those that open for a few to several weeks during the winter period, providing a special, seasonal gathering place for local families and visiting tourists.
According to Aaen, Tivoli has been the top performer in Europe in successfully extending its season— with a new Halloween celebration in October that attracted 250,000 visitors over 10 days and 965,000 visitors to the Christmas event in December. Both events significantly boosted the park’s attendance (to almost 4.4 million—up 5%) and revenues.
In overall attendance figures, the European park scene is relatively static compared to the United States or Asia. The Top 10 have not changed much. Geography and strong national identity are major factors. “Each country has one big park and one lead market,” points out David Camp, an ERA director based in the company’s London office. “Apart from Disney, European parks are regional parks. The big ones get a little bigger each year.” Some have added hotels and other elements, such as Alton Towers’ new indoor waterpark, Cariba Creek. “Adding a hotel can be good for an attendance increase of 50,000 - 100,000 over the course of a year, depending on the number of rooms,” notes Camp.
Two additional chains that don’t appear on our 2006 tallies (because they are all-indoor facilities and do not have theme parks) but that deserve notice for significant numbers are Ripley’s Entertainment (13 million annual visitors) and Palace Entertainment (10 million). [Others are listed in the Notes: Selected Parks.]
The Consolidation/ Investment Cycle
The real dynamism in the Euro parks scene is behind-the-scenes investment and consolidation, where the potential exists for significant profits in a relatively short period. “Ultimately, park ownership is a long-term investment business,” says Camp. “When the market matures, we’ll see parks in the hands of institutions’ pension funds, or as publicly held companies. But in Europe you can buy underperforming parks at a good price now.” Entire chains have been changing hands, but some of the current opportunity also has to do with small, family-owned parks begun in the 1970s or ‘80s. The original owner retires and the family puts the property on the market. Private equity investors active in European parks acquisitions include Hermes, Palomon, Dubai International Capital (DIC), Advent, Blackstone and CDA/ Grevin, among others. Chains that have recently changed ownership include Six Flags Europe, the Tussauds Group, StarParks, Legoland Parks and Parques Reunidos.
The current popularity of European parks with investors is a benefit to the industry as a whole, bringing in capital that stimulates business, fuels creativity and fosters innovation. It is also a boon for the park-going public who flock in to enjoy the improvements, facelifts, new rides and attractions. A number of these investors are also active in other regions—for instance, Blackstone, a key private equity player in theme parks, owns Merlin Entertainments, which owns 70% of Legoland parks and gets credit for the Pirate Shores expansion that has returned so well in the California property. Merlin operates a large number of indoor attractions in Europe, and in 2006 acquired Italy’s Gardaland. Merlin’s properties have grown from 12.2 million to 16 million in attendance on a chain basis [and with their £1.03 billion ($1.98 billion) acquisition in March 2007 of the Tussauds Group, the combined attendance for the group will be more than 30 million, elevating the group to the second spot on the Top 10 chart just behind Disney].
Consolidation in the US is still going on, though the overall cycle is further along than in Europe. For the most part, consolidation of parks in the US has resulted in positive attendance numbers. Universal parks (now owned by GE and Blackstone) are up 1.2% as a chain. Cedar Fair is down 0.6%, but this figure is to its credit: this major successful operator, that began years ago as the lone Cedar Point, absorbed the Paramount Parks chain in midyear. (Viacom sold the properties but has retained rights to continue to use the Paramount Parks name.) “Cedar Fair does most things right,” observed Robinett. “The integration seems to be going well and there’s a very strong management team in place. You’ve got an operator that understands the business, and reinvests consistently.” SEC filings and management numbers show the Six Flags chain down 14% from 2005, but this may well turn around based on the new owners’ improvements as noted above.
In total, according to ERA, the 2006 worldwide indicators for the industry look good with 2.2% growth overall in comparison to the previous year. Looking ahead, some of the things to watch for will be the evolution of the investment/consolidation cycle especially in Europe and Asia, upgrading and expansion of existing parks in North America, the continuing trend to indoor facilities (urban locations) and destination resort development, and the inexhaustible capacity of this industry to reach new heights of creativity and invention.
Notes: Selected Parks
Legoland California,
Carlsbad, CA, USA
2006 Attendance: 1,660,000
Change: up 16.1%
It was a record year for Legoland California, which enjoyed a very strong reception of its new interactive Piratethemed attraction (Pirate Shores), an area of interactive water games and rides. A pleasant, warm summer season also helped drive the strong attendance.
Merlin Entertainments acquired all four Legoland parks in 2005 and has been actively expanding and improving the property. A new expansion of Miniland opening in March 2007 will be the largest such in Lego history. It features a miniature version of the Las Vegas Strip.
The park will spend $3 million on improvements in 2007, including the Miniland expansion and the construction of a new ride at Pirate Shores set to open in May. The new investment comes on the heels of $10 million spent last year for construction of Pirate Shores.
Kennywood,
West Mifflin, PA, USA
2006 Attendance: 1,240,000
Change: up 3.3%
Strong attendance in September and October. The park added a new slingshot ride, and expanded its marketing into Cleveland. There were no price changes, but admission is set to go up in 2007.
Silver Dollar City,
Branson, MO, USA
2006 Attendance: 2,050,000
Change: up 7.3%
The park benefited from the opening of the Grand Exposition, a kid-oriented new ride development, and from new festival elements.
Dollywood,
Pigeon Forge, TN, USA
2006 Attendance: 2,410,000
Change: up 2.1%
It was a record season for Dollywood (2.41 million) and Splash Country (0.4 million). There was a favorable weather pattern with less rain and warm temperatures during the peak season, and mild temperatures through the fall and Christmas. Timber Tower and Timber Canyon were successful, providing publicity opportunities. These successes combined with a new award-winning summer show, a new festival and a new million-dollar Christmas show resulting in strong attendance for all time periods. At Splash Country, the addition of Firetower Falls was a good marketing hook for tweens. Cumulatively, the additions over the past three years (Big Bear Plunge, Bear Mountain Firetower and Firetower Falls) continued the attendance increase.
Lagoon,
Farmington, UT, USA
2006 Attendance: 1,200,000
Change: up 4.2%
Up from the previous year’s 1.15 million, despite no significant marketing. There were some additions to children’s rides.
Cypress Gardens,
Winter Haven, FL, USA
2006 Attendance: 1,400,000
Change: Flat
The area suffered a very wet January and February but had optimal weather from March through July for the first full season of the new Splash Island Waterpark. No price changes were implemented. A new Starliner coaster opens in June 2007; also in spring 2007 opens Bugsville Children’s Area, with 13 rides and shows and a four-story interactive play structure.
Wild Adventures,
Valdosta, GA, USA
2006 Attendance: 1,475,000
Change: Flat
A strong first half of the year did not carry through due to the lack of new attractions and a limited concert line-up. The venue is adding a new amphitheater for 2007 with a bigger stage and larger seating capacity, which is accompanied by a much improved concert schedule for 2007
Non-Gated, Pay-As-You-Go Parks
Adventuredome at Circus Circus,
Las Vegas, NV, USA
2006 Attendance: 4,200,000 (estimate)
Change: down -6.7%
There were no price changes and no new rides. With the Wet’N’Wild waterpark in Las Vegas having closed, Adventuredome, the top attraction at the Circus Circus hotel/casino, is now the only children’s park in Vegas. The downturn in attendance is attributed to high gas prices (75% of customers drive in from California) and heavy construction on the I-15 freeway.
Santa Cruz Boardwalk,
Santa Cruz, CA, USA 2006 Attendance: 3,000,000 (est.) Change: Flat; similar to 2005 Because the well-known amusement pier has no gate, it is not included in the Top 20 list. The venue has begun Spanishlanguage and Internet marketing, and has a new restaurant and new ride, Wipe Out. The area had a wet spring but weather in the summer was excellent.
Other Large Chain Operators
Ripley’s Entertainment
Ripley’s Entertainment exceeded attendance expectations for 2006 with a record-high 13 million visitors to its family of worldwide attractions, which would rank them as no. 8 on the Top 10 list among major theme park operators. Currently with 60 attractions in 10 countries worldwide, Ripley’s Entertainment has expansion plans in place for 2007 that will bring the number of attractions to 64 in 11 countries. The entertainment company will be opening Ripley’s Believe It or Not! on 42nd Street in New York City and Bangalore, India within the next year. Ripley’s opened Great Wolf Lodge in Niagara Falls, Canada in 2006, marking the company’s first venture into the hospitality industry.
Palace Entertainment
Palace Entertainment is one of the largest family entertainment center and waterpark operators in the US, with 32 facilities and over 10 million visitors annually. Palace Entertainment waterparks include; Wet ‘N’Wild, Raging Waters, Splish Splash, Big Kahuna’s, Water Country, Mountain Creek and Wild Waters. Palace Entertainment also owns Boomers, Castle Park, Silver Springs, Malibu Grand Prix, Mountasia, and Speedzone family entertainment parks in CA, TX, FL, GA, and NY. Established in 1998 after the initial acquisition of four independently owned family entertainment companies, Palace Entertainment continues to consolidate the fragmented family entertainment industry and recently announced the acquisition of Waterworld USA Cal Expo from Six Flags.
