We started this article by asking ourselves the following question: instead of just comparing theme parks by their attendance levels, what happens when you compare theme parks by revenues?
A Park Database Feature
By Wonwhee Kim, Founder of The Park Database (left)
Ultimately, the developers, investors, and operators (read: clients) of everyone in the industry care about how much money a park generates, and not just the number of people that pass through its gates.
It turns out that evaluating attendance alongside revenues for a park yields some interesting insights.
First, let’s start with overall theme park revenues for the major chains in the industry. Below is a chart of the top theme park brands in the world. The number in the bubble represents the number of total parks/attractions. Bubbles of the same color represent those of the same brand.
In the theme park industry, it is basically Disney – and everyone else. With nearly $14 billion in theme park revenues around the world, Disney is the giant star of the theme park universe. While Universal is second at approximately $3.5 billion, it is a distant second. Merlin has almost 100 attractions around the world that gross $1.6 billion in revenues. Seaworld rivals it in revenues, although with a far fewer number of parks.
How does it look at the per-park level?
The gulf between Disney and Universal Studios, at the entity level, narrows significantly at the per-park level. Nevertheless, you see that the two chains dominate the industry in a very major way, like two giant planets around which the others revolve.
- We hope this chart illustrates that there is much more nuance to the long-standing Ocean Park vs. Hong Kong Disney feud. When measured only by attendance, Ocean Park has outperformed Disney during the latter’s entire life, but that gap has narrowed significantly. However, in terms of both revenues (shown here) and profitability, Hong Kong Disney has overtaken Ocean Park by more than two times!
- By concentrating on per capita revenues and total revenues, we can see that two parks can generate the same amount of money, but have completely different business models. Compare Universal Studios Singapore, at 3 million visitors but nearly $80 in revenues per guest, against Ocean Park, with 8 million visitors, and roughly the same level of total revenues. These two parks operate under two completely different operating models. This points to an important issue about priorities and park design. Clients often put an emphasis on attendance, but we can see here that per capita revenues are just as important.
- The horizontal axis on these charts is very important. Notice that some of the regional parks in red perform just as well as Disney Paris or Universal Studios Singapore in terms of per capita revenues, although their attendance levels are much lower. What should a park emphasize? Attendance? Or revenue per visitor? More on this later.
- The major Asian regional, non-branded destination parks are very high on attendance, but low on per capita revenues (Everland, Lotte World, Ocean Park). These are operated this way intentionally, with various social and cultural goals, and they are not strictly comparable to other types of parks in this chart.
Could you categorize parks in this manner?
We would propose the following:
- The Disney/Universal Zone
- Major Asian Regional Parks – these generate very high levels of attendance, at Disney/Universal levels, but have dramatically lower levels of per-visitor revenues. These parks are operated with a variety of social goals in mind and are not strictly comparable to a for-profit park.
- Regional/Major Regional parks – the majority of parks in the world are regional draws with attendance in the range of 2-4 million. There were many parks that we did not show here, for lack of space.
- Major Chinese parks – we chose to separate this category from the Regional park category, because while Chinese parks usually generate attendance at the upper end of the range, their per capita revenues are usually very, very low.
Now what about some detail on regional parks?
Regional parks tend to gross in the $50 to $100 million range. Some further observations:
- As beleaguered as Seaworld’s share price and attendance have been, in recent years, they achieve very high per capita revenues at above $60.
- Legoland parks are the jewels in Merlin’s crown, literally – with performance in per capita revenue terms that are higher than those of chains that achieve much higher attendance levels. Even among Merlin theme parks, it is the highest performer.
- Happy Valley Shanghai’s performance in per capita revenue terms makes it the highest performing Chinese park, to our knowledge. In this sense it is an outlier. Most major Chinese parks perform as well as Song Dynasty and Happy Valley Chengdu (as pictured), in both attendance and per capita expenditure terms.
In closing, revenues are the starting point of profitability, and the measure of the depth of a theme park’s market and drawing power. Comparing parks by both per capita revenues and attendance yields a more complete picture in understanding the industry, and aids the development and strategic planning process.
Note that this analysis compares only the top line, or revenues. Actual profits are not including here, and would be a function of the total development budget, as well as management’s ability to manage costs. And that will be the subject of a future feature.
Thoughts? Comments? Complaints? Please share!
By The Park Database.
Charts: Pro Forma
Image: Kind courtesy Six Flags Great America Milwaukee