One fine body…
January 02, 2019
6 Top Theme Park Industry Developments of 2018
We saw plenty of that kind of news over the past year, as operators sought to encourage repeat business while driving higher revenue. (Exhibit A: the new Toy Story Land at DisneyÕs Hollywood Studios, which is also building an addition devoted to Star Wars.)
International growth also continued to hold promise, as Six Flags signed more agreements for parks in China; Disney announced plans to invest $2.5 billion to expand its Paris property; and Universal reportedly doubled the budget for its upcoming Beijing park.
Beyond the expected additions, though, the industryÕs biggest players made news in other ways. Below are six of the theme park stories that captured our attention in 2018:
SEAWORLD MAKES ALL THE CHANGES
ItÕs been a rough period for SeaWorld, a company often described as ÒembattledÓ in the five years since the critical documentary Blackfish was released.
After an attempt at a turnaround that included replacing top leadership, ending the breeding program for captive orcas, and shifting emphasis away from animal entertainment to rides, the company still wasnÕt seeing much success.
So in February, the companyÕs board decided it was time to try something new. Three years after he was hired, CEO Joel Manby stepped down. The chief creative officer and chief marketing officer, executives Manby brought in, also departed over the next month.
John Reilly, a longtime insider, was named interim CEO; he remains at the helm. Early on, he said the company needed to put more focus on what made it stand out: its animal collection. But SeaWorld also tried some other tactics, including offering free beer at some parks over the summer (a big hit) and cutting prices.
The company also shed some legal baggage, agreeing in September to pay the Securities and Exchange Commission $4 million to settle fraud charges related to comments about the impact of Blackfish. A separate U.S. Department of Justice investigation did not result in any action.
SeaWorld appears to have momentum on its side. In November, the company said attendance and revenue had climbed for three quarters in a row.
UNIVERSAL GETS CLOSER TO CONFIRMING NEW ORLANDO PARK
The Orlando theme park war between Disney and Universal has been raging for decades now with no sign of easing up. In fact, both companies are escalating their offense with massive investments in attractions, expansions, and hotels.
Observers have long expected Comcast-owned Universal Parks & Resorts to add another park in Orlando, which would bring the total there to four including Volcano Bay, a Òwater theme parkÓ that opened in 2017. But the company has been mum on plans, even as executives announced the addition of a Nintendo-themed area and bought more land around the existing property.
That silence was broken Ñ sort of Ñ during an earnings call in July.
In response to an analyst question, NBCUniversal CEO Stephen Burke said the company is Òlooking atÓ an additional park, or gate, in Florida and confirmed the filing of a name registration.
ÒWe have a lot of great [intellectual property], we love the theme park business, itÕs one of our best, most consistent businesses,Ó Burke said. ÒAnd we think we have a lot of very long runway and that another gate in Florida would have the advantage of turning Florida from a two-to-three-day destination to potentially a weeklong destination.Ó
Now the speculation has a new focus: when the new addition will be officially announced, what it will include, and when it will open. Walt Disney World has multiple upgrades in the works for its 50th anniversary in 2021, so thereÕs no doubt the battle for theme park fans will stay in high gear for the foreseeable future.
DISNEY AGREES TO RAISE STARTING PAY TO $15 AN HOUR
This summer, the so-called happiest place on Earth was the site of serious discontent as unions representing workers at Disneyland in California and Walt Disney World in Florida negotiated new labor contracts with the Walt Disney Co.
Employees marched to protest their pay. And a study commissioned by the unions found that nearly 75 percent of theme park workers at the California properties did not make enough to cover basic expenses.
Under pressure, Disney reached an agreement to raise starting pay to $15 an hour by January in California and by 2021 in Florida. Workers approved the plan, which union leaders said would be revolutionary not just for Disney employees but also for hospitality workers at other companies.
In Orlando, both Universal and SeaWorld have since announced they will raise their starting wages, though neither will pay as much as Disney.
SIX FLAGS LAUNCHES INDUSTRY-LEADING LOYALTY PROGRAM
Theme parks have not traditionally played the loyalty game in the same way airlines, hotels, and even restaurants do. But Six Flags Entertainment, the Texas-based regional theme park operator, set out to change that with the announcement in August of its new loyalty program.
Six Flags Membership Rewards gives points to participants for visiting parks and spending money, but also for checking in at rides, watching shows, and taking surveys. Rewards range from churros to free tickets to VIP tours.
Only those who are enrolled in the companyÕs membership program Ñ a kind of pass that gives them access to parks and perks Ñ can earn and redeem loyalty points. Six Flags has been trying to increase its membership base and make joining more valuable; executives hope the rewards program will keep those members engaged, coming back regularly, and spending money.
Industry watchers say the move was long overdue. The question now will be how it works for Six Flags and who tries their own version next.
DISNEY TIES TICKET PRICES TO SPECIFIC DATES
Ever since Disney put seasonal pricing into effect in 2016 Ñ charging higher prices for busier times of year Ñ the industry has been waiting for the company to put an even more targeted pricing strategy into place.
The wait was over in late September, when the entertainment giant announced it was linking Walt Disney World park prices to specific dates for the first time. Under the change, the highest price for a one-day ticket did not go up, but the lowest price did.
DisneyÕs move shows how theme park pricing is growing more sophisticated, though operators still arenÕt approaching airline-style revenue management. Once prices are set based on history and forecasts, they donÕt fluctuate.
The goal, according to Disney, is to better manage crowds so visitors come consistently throughout the year rather than only at peak times such as summer and holidays.
ÒIntroducing date-based tickets and pricing will allow us to better distribute attendance throughout the year so that we can continue to improve and deliver a great experience,Ó the company wrote in a blog post.
DUBAI KEEPS DISAPPOINTING
After falling far short of its attendance goals for the complex known as Dubai Parks & Resorts in 2017, operator DXB Entertainments reorganized its debt and scaled back its goals for 2018.
While attendance crept up, the company still failed to turn a profit, reporting its 20th quarterly loss in a row in November. Expansion plans are under review.
In October, Six Flags Entertainment Ñ which has a deal in place to open one of its theme parks at the Dubai development Ñ warned during an earnings call that the park would likely not be able to open in 2019 as planned.
ÒWhilst we would never want the park not to go ahead, if it happens, itÕs something we would manage through very successfully,Ó Six Flags President and CEO Jim Reid-Anderson said.
Theme park operators around the world have looked to international markets to grow their business. Six Flags has partnerships with developers in China and Saudi Arabia as well as Dubai, and Disney and Universal have both made huge recent investments in China.
DubaiÕs struggles make it clear that global growth is not guaranteed, and Òif you build it, people will comeÓ might ring true in baseball movies, but not necessarily theme parks.
Copyright 2019 Skift. All rights reserved. From https://www.skift.com. By Hannah Sampson, Skift.
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