Rich Greenfield, partner at LightShed Ventures, gives more details on amusement park revenue on The Claman Countdown.
Inflation and rising costs continue to strain household finances in the United States, causing some major theme park operators to see revenue declines.
Disney, Universal and Six Flags all reported declines in theme park revenue for the second quarter of this year.
It’s been a rollercoaster few years for the industry, following a surge in visitor numbers following the pandemic.
Operators say the high costs for families, plus a strong dollar, have led Americans to prefer international vacations and cruises to theme parks.
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Visitors ride the “Scream” roller coaster at Six Flags Magic Mountain in Valencia, California, in April 2021. (Valerie Macon/AFP/via Getty Images)
Disney said last week that theme park revenue rose 2% to $8.4 billion in the latest quarter compared to the same period a year ago, but overall operating profit fell 3% to $2.2 billion.
The company announced last year that it would spend approximately $60 billion over the next decade to expand capacity at its theme parks and cruise lines around the world. The increased capital spending is being pumped into the Theme Parks, Experiences and Products (DPEP) division of the company’s business and is touted as nearly double the amount it has spent on DPEP in the past decade.
Disney’s flagship theme park, the Magic Kingdom, in Florida, is set to undergo its biggest expansion in its 53-year history, adding a new “land” dedicated to classic Disney villains and another focused on Pixar’s “Cars” films, The New York Times reports. Disneyland Resort in California will add an “Avatar”-themed water ride and the resort’s first “Coco” attraction.
Comcast, which owns Universal Destinations and Experiences, reported a 10.6% decline in second-quarter results compared with the second quarter of 2023.
“Theme park revenue decreased primarily due to lower revenue at our domestic theme parks due to lower visitor numbers and the unfavorable impact of foreign currency at our overseas theme parks,” the company said in its second-quarter 2024 earnings report.
“The stronger dollar has also led to surging demand for other travel options, including cruises and international vacations, while attendance at our theme parks is normalizing,” Comcast President Mike Cavanagh said during the company’s earnings call last month, The Wall Street Journal reported.
Meanwhile, Six Flags on Thursday reported a 1% drop in total revenue and a 2% drop in attendance in the second quarter.
The company said severe weather conditions since the end of the second quarter, including the effects of Hurricane Beryl and record heat and heavy rains that hit much of North America, affected demand at several of its theme parks.
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Preliminary results showed attendance across the portfolio for the five weeks ending August 4 totaled 10.9 million, down 3% compared with attendance for the same five weeks last year.
Six Flags said most of the attendance decline was attributable to four parks that had operations partially or fully suspended due to macro events, including utility outages at Michigan’s Adventure, excessive flooding at Valleyfair and the impacts of Hurricane Beryl on water parks in Galveston and Houston.
People ride the Wonder Woman Flight of Courage roller coaster at Six Flags Magic Mountain in Valencia, California, in July 2022. (Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images/Getty Images)
Excluding those four parks, attendance across the portfolio was down 1% to about 150,000.
“While demand in recent weeks has been impacted by exogenous macro factors, we remain pleased with overall attendance trends, supported by a robust season pass sales program and strong group bookings,” Richard A. Zimmerman, president and CEO of Six Flags Entertainment Corporation, said in a statement.
“Given solid attendance patterns earlier this year and strength in advance sales channels, we believe underlying demand for the entertainment value of our theme parks remains strong and position us well for 2024 and beyond,” Zimmerman said.
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Universal Studios Florida theme park in Orlando (iStock)
This summer, Six Flags Entertainment Corporation merged with Cedar Fair Entertainment Company. Six Flags says the merger will create the largest amusement park operator in North America, with 42 new parks across the United States, Canada and Mexico.
The merger values the company at an estimated $8 billion.
Len Testa, president of trip-planning website Touring Plans, told Axios that the average cost of a Walt Disney World vacation (four days for a family of four) has risen by nearly $1,000 since 2019.
He added that the overall decline in attendance is also due to theme parks not building new rides.
