How Two Large Parks are Dealing with Today’s Tough TimesSeptember 15, 2010 No Comments
As the weather gets cooler and children return to school, the peak summer season is winding down for many theme parks and resorts. That makes now a good time to look back and consider how some of the industry’s larger parks continue to deal with an economic downturn that seems to linger on like an unwelcome guest.
While some resorts like Universal Orlando have countered conventional wisdom by investing big money during tough times, others have looked to less traditional methods for drawing crowds. This month, The Large Park Report takes a closer look at how two industry leaders are using different approaches to keep guests clicking through their turnstiles despite the continuing economic challenges.
Turning Flat Attendance Into Increased Revenue
Early reports indicate that attendance at nearly every large park and resort continues to decrease or remain flat. Even in those instances where attendance is up, it is often the result of big discounts or significant incentives like free dining. With this reality in mind, large parks are increasingly developing strategies for capturing more spending from the fewer guests that are arriving.
By increasing guest per capita spending, parks can help offset the decreased admission revenue from the smaller crowds. This strategy comes with a word of caution though: it is unlikely to work as a permanent strategy because, ultimately, there is a limit to how much a single guest will spend during a visit, especially in tough economic times like these. Indeed, for some time during the last decade, Universal Orlando made this tactic a primary strategy only to learn that, after several years, even a very efficient operation bumps up against a guest wallet that has been maxed out of the ability to keep spending.
Still though, clever marketing can help convince visitors to open up their wallets to buy more food and merchandise, especially if the strategy is used as an interim measure rather than as a long-term revenue increaser.
Along these lines, several large parks have creatively devised ways to stabilize revenue even in times of decreased attendance. One increasingly popular tool is the All-You-Can-Eat option. The general strategy is to increase guest food spending per capita by making the food appear to offer a greater value than if purchased individually. One of the real innovators in this area among large parks and resorts has been Busch Gardens Tampa.
For several years, the park has offered a fixed-price “All You Can Eat” option for guests. The idea is that the cost of this option will produce more revenue than the park would receive if guests simply purchased meals and snacks as needed. While such a program requires a strong understanding of a park’s food costs and related expenses, if done correctly it can increase revenue while also providing the guest with a better sense of value. Add in the fact that many guests won’t eat more than the total value of the meals if bought individually and this type of program can increase flexibility and convenience while also giving visitors the sense that they got more, for less.
Recently, Busch Gardens took the program to the next level of sophistication by offering a free “All You Can Eat” option for guests that purchase a daily ticket at the regular admission rate. The “Play All Day and Dine For Free” promotion is designed to, among other things, convince guests to stay in the park longer in order to get the full value of their free dining. This might mean arriving earlier, staying later or both.
Any of these results are a good thing since, generally, the longer you can keep a guest in the park, the more money they will spend. By enticing them to eat more meals in the park through an all-you-can-eat strategy, you can increase the opportunity for them to spend money in other revenue stream items such as merchandise and in-park upgrades like tours.
As with the earlier all-you-can-eat program, this promotion could be a big revenue drain if Busch Gardens did not fully understand how guests spend money inside its park. This means that, whether via surveys or other methods, effectively mining accurate guest data is key to showing a park how to shift guest purchases from one revenue stream to another in order to generate even better overall profits. Doing so hopefully allows an amusement facility to decrease revenues in one area (in the case of Busch Gardens, food receipts) while generating more than they would have received in admission and merchandise purchases had the food been regularly priced.
All of this is aimed at giving guests flexibility and the feel of receiving a good value. “Guests like having options when planning their theme park visit. Our parks not only have something for every member of the family, but our ticket products also allow guests to customize their Busch Gardens experience,” explained Gerard Hoeppner, Vice President of Marketing for Busch Gardens Tampa Bay and Adventure Island. “The Play & Dine ticket is popular because of its great value in offering guests myriad dining options throughout the park for as often as they like.”
In tough economic times, this emphasis on value and options can be a powerful motivator in someone picking your park over another entertainment option.
Renewing Existing Attractions for a Short-Term Boost of Interest
Another strategy has been to “update” existing attractions rather than invest the capital to build new ones. If done correctly, this can be an effective approach. Take, for instance, Walt Disney World’s Summer Nightastic program.
This summer, the Summer Nightastic event introduced several entertainment options short of actually opening a new ride. These included a return of the Main Street Electrical Parade and the Captain EO 4-D movie—two popular former attractions that were reworked and returned to the resort. For Captain EO, the company kept the original film and added in-theater upgrades based on new tricks of the trade that were not available when EO originally debuted nearly 25 years ago.
According to Epcot Vice President Dan Cockerell, “the return of Captain EO shows how great attractions from the past can be renewed through technology while still keeping the classic show and making it popular to new guests.”The Nightastic event also offered a new drop sequence for the Tower of Terror ride where guests experience the thrills of a haunted, out of control elevator (or so the story goes.) The advantage of the ride enhancements is that it gives guests a new experience when economic times might make the capital investment for an entirely original attraction tough to justify.
The tricky part is that this approach requires a delicate balancing act. Parks cannot fall into the temptation of only making small, incremental additions because they are less expensive. Instead, these types of changes are better used as interim moves in between larger new rides and shows.
Another point related to this approach is the importance of advance planning. When Disney built Tower of Terror, it was much easier on the front end to design the new technology for subsequent enhancements like a new drop sequence rather than trying to do that after the fact.
Indeed, the company used the same approach when it introduced its wildly popular Toy Story Mania attraction. This family friendly attraction allows riders to participate in different virtual carnival games (such as ring tosses) themed to the Toy Story movie as they ride through different virtual vignettes. As with Tower of Terror, Disney designed Toy Story Mania in such a way that the different vignettes and games in each of them could be modified through changes to the computer programs that operate the attraction. This allows the company to regularly introduce new virtual games that give the ride a fresh appeal while not having to expensively construct an attraction from scratch.
Disney recently implemented this strategy on the ride by introducing a new virtual game as part of the Toy Story 3 movie release this summer. Not only does this allow the company to quickly adapt to changes but it also gives guests a relatively new experience that provides them an incentive to revisit the attraction. Ultimately, by incorporating the ability to make changes over time to a single attraction, Disney placed itself in the position to offer its guests new experiences this summer even though the economy has placed a strain on capital budgets.
Further proof that, like the Busch Gardens Tampa promotion, in an economic downturn, parks have options to generate interest and attendance short of building expensive new attractions. -
(Reach Contributor Chad Emerson at email@example.com.)