While reading the latest economic forecast put out by the University of California, Los Angeles, I was struck by the dreary numbers and the prediction of even slower growth, or what UCLA economists sum up as a "stalled" economy. And then, there it was -- a sparkling tidbit of information.
Attendance at Disneyland Park and Knott's Berry Farm set records in 2010, and it appears attendance for 2011 will be even higher, according to the report.
Curious, I checked the financial statements of amusement park operators across the nation, and I found the same thing -- attendance is up. That doesn't always mean more revenue or higher profits, but in recent months, theme parks have reported both. Who would've thought more people than ever were eating cotton candy, buying souvenirs, and getting cheap thrills on roller coasters?
In 2010, attendance at the top 20 theme parks in North America was up nearly 2% over 2009, according to the Themed Entertainment Association. The industry is projecting higher attendance and revenue for 2011, thanks to good weather and new attractions and rides.
Cedar Fair Entertainment Co. (NYSE: FUN), which operates several amusement and water parks in the US and one in Canada, had record attendance last year and is expecting 2011 to be another banner year. "The 'staycation' is real," says Stacy Frole, director of investor relations for the Sandusky, Ohio, company. Families are vacationing closer to home. "People want to get out of their house, and they're looking for entertainment at a value."
For the quarter that ended Sept. 25, Cedar Fair reported a 5% increase in net revenue to $572 million, due to increases in attendance, in-park spending (food, merchandise, etc.), and out-of-park spending, such as lodging. Many park operators own hotels.
Gene Jeffers, executive director of the Themed Entertainment Association, says theme parks offer families a relatively cheap form of escape during bad economic times.
"During the Depression, people went to the movies more often than they had before. Even though they didn't necessarily have a lot of money, it was a small enough amount of money to escape from the realities of the economic perils," he says. "People are still trying to give their families cool experiences and a little break from the weekday routine, the worries, and the day-to-day problems."
The US has about 400 theme parks, which employ about 50,000 full-time and seasonal workers annually and contribute $57 billion to the economy, according to the International Association of Amusement Parks and Attractions. About 300 million people visit amusement parks in the US yearly, the trade group says.
Amusement parks have been wooing visitors with new rides and various types of discounting and incentives. Disneyland Park and Disney's California Adventure in Anaheim, Calif., both properties of Walt Disney Co. (NYSE: DIS), don't typically discount admissions (admission tends to go up). However, "quite often they will offer really nice three-day hotel packages," Jeffers says.
Building rides and attractions fuels the amusement park business. The 20-acre Wizarding World of Harry Potter, which opened in June of last year at Universal Studios Orlando, remains a huge draw, boosting sales and profits for Universal Parks & Resorts, part of NBC Universal Inc., a subsidiary of Comcast Corp. (Nasdaq: CMCSA).
The amusement park business appears to be as recession-proof as an industry can get. But not every year. Many parks reported flat or lower attendance in 2008-09, along with lower sales, as people spent less at the parks. What theme parks aren't is weather-proof. They're dependent on good weather.
It will be interesting to see if families across the nation continue to frequent amusement parks in 2012. The parks will do their part to lure the masses, offering many new rides and attractions. Here are a few set to open next year:
- Universal Studios Orlando will open a 3D attraction based on the movie Despicable Me.
- Six Flags parks have several new rides coming, including SkyScreamers in New Jersey and Texas. The Six Flags park near Los Angeles will get a Drop of Doom, which drops riders from 400 feet at speeds of 85 miles per hour.
- SeaWorld in San Diego will add a Manta roller coaster, which will travel through a marine life exhibit.
- Holiday World in Indiana will add the Mammoth, set to be the world's largest water coaster.
- Cedar Fair is spending $90 million on rides set to open in 2012, including the Stinger, a roller coaster that resembles a scorpion, at Dorney Park in Allentown, Pa.