How to Increase In-Park Spending

Dear Mr. Theme Park:

We operate a mid-sized theme park.  We have had to include free parking, free drinks and other benefits to our season passes, but our in-park spending is still down.  What can we do?  

Thanks,

Roland

Dear Roland:

Your question about how to improve in-park spending is certainly germane to today’s leisure business.  When we look at park revenues, we see that they typically come in this manner:  50% from admissions and 50% from in-park spending.  As our industry matures, we have seen definite swings in our per capita spending.  We have seen season pass sales all but eliminate the a la carte, or full price ticket.  When you examine Six Flags and Cedar Fair, it is fair to estimate that approximately 40% to 50% of their annual attendance comes from season passes – unimaginable 20 years ago. 

Our admission ticket sales are divided into multiple categories, including a la carte, promotions, group sales, good-any-day (GADs), and special events.  As I stated, the season pass category has seen the largest growth, primarily due to premium additions and selling, as you stated, free parking, “bring a friend” days, and “buy early” promos.  Also making an impact are the programs that allow purchasers to “make payments”. Parks have started to sell large quantities and sell them early.  The reason is to lock the season pass holder in early and to get the cash on cash usage.  These are just a few of the approaches that operators are taking to increase season pass sales. 

Now, we have seen programs such as “free soft drinks” (as much as you want) have huge impacts on park attendance.  Holiday World in Santa Claus, Indiana introduced this concept a few years ago to remarkable results.  What else they did – if memory serves me correctly – was to also increase the front gate admission by two or three dollars.  People loved the idea and did not flinch at the price increase, which was an increase larger than normal.  But, hey, people got something free – something that was to them a real bargain.  It worked well there and at other parks who appropriately adopted the concept and also raised prices.  Remember, Roland, “to accept the dilution you have to increase the volume.”

The Holiday World free drink program gave away a very lucrative high profit item, but more than made it up at the front gate where the majority of the increase fell directly to the bottom line.

Games revenues have suffered ever since the mid-2000s economic downturn.  People stopped playing the impulse games because it was not something that they absolutely needed to spend money on in order to enjoy a day at the park.  Cutbacks were made and games were impacted.  When we study the pricing on playing games, we see that many games which started out priced at $0.50 and $1.00 are now in the range of $3.00 to $5.00.  This is quite an increase and not a necessity to spend in order to enjoy a visit as I stated.  So, if you have a skill games program, you may want to re-examine your pricing model and “give” to see if lower prices might induce more players.  You can always adjust your cost of sales, based on the prizes you give.  Finding the correct plush or premium that fits your pricing model is do-able.  It takes proper calculation and study to correctly select product and price the games.  Remember, Roland, games typically have a higher margin yield than food and beverage and general merchandise.  So it behooves you to properly plan the games from time to time based on economy and player popularity.

The other major program larger parks are adopting is evening programs.  These programs keep the guests in the park longer.  Longer stays promote particularly more and higher food and beverage per capitas.  So, anything you can add to your park to extend the visit will have a positive impact on your in-park per capita spending levels.

I suggest that you and your management team review these programs annually to determine what is best for your park.  Price increases alone can turn off the public, so any in-park price escalations need to be tied to a “price / value” plan that makes sound product economics.

Roland, good luck.  If we can ever assist, please do not hesitate to call us.

My small park operates in a mid-sized market and we’ve never had any safety or security issues.  I have now read that Disney and others are putting in metal detectors.  There seems to be so much violence anymore.  I’m wondering what steps a small operator like us should take.  Obviously the safety of our guests comes first, but we operate on such a limited budget.

William

Dear William,

You are absolutely correct.  One only needs to watch the evening news to see how crazy our world has become.  Amusement and theme parks, as we well know in the industry, are the safest places on the planet to be.  This is due to our continuing upkeep and inspection of product, property, and personnel.

 

Just Sunday in Las Vegas, a woman with a child in the car, ran down people on a crowded major thoroughfare in the heart of Vegas.  Every week, we see more and more situations occurring that 5, 10, or 20 years ago, we could never have imagined happening.

Everywhere we go now, metal detectors are becoming a “way of life”.  We see them at hospitals, schools, churches, businesses, banks, malls, sporting events, concerts, bars, etc.  It is very normal now to pass through a metal scanner or be wanded to gain entry to a venue.

Last week was a very busy week in our industry from the media standpoint, due to Disney, SeaWorld, and Universal announcing the addition of metal detectors at all of their facilities.  William, it’s only a short matter of time before we see more and more security added to both main entrances and service entrances at major parks.  Metal detectors really do not inflict any invasive search.  Depending on how they are set, they alarm when a park believes an unusual amount of metal is being carried into the park.  Typically, guests who alarm are pulled aside and are “wanded” by a security guard to determine what set off the alarm.  Normally, it has been a view that metal detectors do not greatly slow the admission process.  Most importantly, an overwhelming number of guests do not really care or worry about being screened.   The majority actually feels safer for both themselves and their family members.  Through the years at facilities which have used metal detectors, there has been very little negative feedback from guests for utilizing this process.

William, metal detectors are a good first line of defense against getting various types of weapons in a facility.  With all the “permit to carry” holders, we have seen where they have brought a firearm to a park, but because of metal detectors, they were identified and asked to deposit their firearm with the park’s security department until they were ready to depart.  Permit or no permit, parks are not places to have people toting guns.

You indicated you are a small operator with a minimal budget with which to invest.  My suggestion is meet with your operating staff, and identify all of the points of ingress and egress to your facility.  Once complete, go online to study the myriad of types available.  Here at ITPS, we bought two metal detectors online for a local small project for around $2800 each.  Not too pricey when you consider the inherent technology that went into their manufacturing, and how valuable they can be to your operation.

In addition, I suggest that you have some type of secure system where employees pass through.  The “back of house” in many parks can offer a much easier way to sneak something in or out if desired.  Today’s world dictates stepped-up security here as well.

I also suggest that you identify your needs as stated before, and then test the process to actually determine how many detectors you require.  It is a smart consideration that you are evaluating.  This program can provide you with added safety, security, and great piece of mind.  For a relative small investment, you can make a facility safe.

Please let me know if you proceed and how the programs work in your park.

The Middle East Theme Parks - Can they all succeed?

Legoland Dubai under Construction

Dear Mr. Theme Park,

We are expecting the opening of 4 to 5 huge theme parks in the UAE in the next 2 to 3 years.  What kind of a support business to theme parks do you think we should consider opening?

-      Mujtaba

Dear Mujtaba:

The UAE and surrounding areas are extremely busy planning and constructing theme parks.  When looking at Dubai primarily, one has to wonder…….can all of these parks being developed actually succeed?

At our last count, there are more than 20 parks being planned and developed in the Middle Eastern marketplace.  We currently know that the parks under development are:

Park	Expected Opening Year
Dubai Butterfly Garden / Miracle Garden	2015
IMG Worlds of Adventure	2015
Motiongate Dubai	2016
Bollywood Parks	2016
LEGOLAND Dubai	2016
Majarat Oman (Oman Galaxy Star City)	2016
Dubai Safari	2016
Qatar Entertainment City	2016
Entertainment City Qatar	2016
KidzMondo	2016
XtremeLand	2016
Juniverse	2016
Angry Birds Theme Park	2016
Virtuocity	2016
Snow Park	2016
KidZania Qatar	2017
Pearl of Dubai	2017
Adventure Island	2017
Warner Bros. Theme Park	2018
20th Century Fox World Dubai	2018
Mall of the World	2018 First Phase
Bluewaters Island	2018

  

Mujtaba, the supporting infrastructure for major theme park development and the success of same is quite important.  Theme parks require major access and easy ingress/egress for the attending guests.  They also require good visibility from the highways serving the parks, decent topography, and well-located utilities in the inherent area.  Major parks also require ample hotel rooms, restaurants, and retail support.  “The more the merrier” as we say from the theme park support standpoint.  And, above all, sufficient local population and the extremely important and necessary tourist market are required to support the theme parks.

Keep in mind, Orlando is now celebrating 45 years of major theme park development.  Orlando has been built on demand – demand by the visitors who come and go annually.  Orlando now attracts 50 million tourists per year.  It has taken years to achieve this level of incredible tourism.  Remember, Orlando has seen upturns and downturns through the years.   This has ranged from the negatives of the economy, oil prices, and September 11, 2001, to the positive out come of the well-planned attractions Orlando enjoys to this very moment.

In 2008, Anheuser-Busch planned for an
entire island of theme parks in Dubai.

I have a saying that I have used many times during my involvement in the global attractions business.  That saying is, “Why would someone drive past one McDonald’s to go to another McDonald’s to get the same Big Mac?”  In other words, Mujtaba, the new product offerings in the Middle Eastern markets really must be different from one another, not only from the Intellectual Property (IP) standpoint, but also in terms of product offering and experience -- enough to make a significant difference in the eyes of the ticket buyers.

The Middle Eastern markets are extremely hot for a greater part of the year.  Air conditioning and comfort are going to play a pivotal role in utilization.  120-degrees is a hot temperature in which to recreate.  My friends who work in Dubai and the surrounding contries say temperature will not be an issue with the outdoor parks.  I will have to wait and see if the extreme temps have an impact or not.

Keep in mind too that Disney ran into problems, and to a certain degree, still has problems with their Paris and Hong Kong parks because they misread the “build on demand” factor, cultural issues, and competitive factors.

Too much too soon can leave an attractions market thirsting for visitors.  Lack of attendance impacts the continuing growth in the surrounding infrastructure programs.  You have to have tourists to achieve occupancy, fill restaurants, and continue to drive retail.

"They said it couldn't be done..."
Now Closed Hard Rock Park - South Carolina

The days of “build it and they will come” are basically gone.  It is going to be very interesting to watch and learn from this incredible Middle East growth.  If you reflect back to the mid-2000s, there was enormous theme park program development planned during that time.  However, when the global economy saw the massive downturn, basically all of the projects on the planning board stopped - while only a few continued.

So, we shall see.  There are big plans underway out to 2020.  Can demand keep up with the plans?  Only time will tell.  Supporting infrastructure will be an important feature.

I know this:  to support all of the themed attractions coming on line, a new theme park mecca will need to exceed Orlando if all are to be financially successful.

Christmas Holiday Program

Dear Mr. Theme Park:

I am a small to medium amusement park in the southeastern part of the USA.  I am considering putting in a Christmas holiday program.  I have seen some of these come and go through the years.  Any thoughts on how and if this can be a success if I did put it in?

-       Adrienne

Dear Adrienne:

Holiday programs in amusement parks have been in existence for many years.  One of the first was WINTERFEST at Kings Island in Cincinnati, which I helped establish in the 1970s.  It was a prototype Christmas event that we created to achieve several goals.  First and foremost, we wanted to bring in revenue in the off-season.  Second, we wanted to keep the Kings Island name “in place” a few months longer, giving the park greater awareness.  And, third, we wanted to create an event that would bring the entire family out to the park.

All of these objectives and goals were achieved during our first year of operating our Christmas event.  It was amazing to see how successful the first WINTERFEST really was.  At the end of the one-month event, we had entertained over 330,000 people – basically in 1/5 of the park.  The event occurred in the International Street area and the surrounding Esplanade, which also offered the German Festhaus that we had built as a huge performing restaurant.  It offered a great stage on which to present a Christmas Pageant show.

At the end of the first WINTERFEST, after all expenses, capital, and operating expenses cleared, we netted $500,000!  It was amazing.  And, equally amazing, we achieved all of our objectives and goals during the winter!  People – mainly families – enjoyed the event and loved coming to the park experiencing carolers, and special food and drinks such as roasted chestnuts, hot chocolate, smoked turkey legs, and wonderful bakery goods.

Moms, dads, children, grandmothers, and grandfathers came to experience the ambiance, shows, food and beverage, and specialty merchandise.  One thing we did to help promote sales of Christmas/Holiday oriented items was to bring in concessionaires.   They sold out of basically everything they had to offer.  It was truly phenomenal.

The park charged a mere fraction of the summer entry price to attend WINTERFEST.  The goal was to price it so that the entire family could afford to come together in the same visit.  And come they did!

After the success of WINTERFEST, and after I had left the Kings company and started ITPS, I went to my friends at Six Flags and presented the benefits of opening a winter program in the Texas park.  We named it “Holiday in the Park.”  It opened over 25 years ago and is an integral and important part of the annual business at Six Flags Over Texas.  Six Flags is now expanding the “Holiday in the Park” to other parks as a way to expand attendance and revenues.  Other companies are doing the same, and I believe we are going to see more parks adding Christmas/Holiday programs to their current operations.

Adrienne, let me leave you with some things to keep in mind.  It is best offered as an evening experience when the lights bring the park alive.  It will not be affected by snow.  Rain does affect attendance, however.  A good operating schedule is from the Friday after Thanksgiving through New Year’s Day, and from 4:00p.m until 10:00p.m. or 11:00p.m. is an ideal operating time.

Also, keep the admission to the event reasonable. 

Offer traditional holiday food and beverages that cannot be gotten at the park during the summer operation (some duplication is ok).  Flood the park with all of the great Christmas seasonal music you can (people love it!).  Also, start a program to dress your employees in old-time Holiday costumes, at least the Christmas carolers.

Realize that you need a three-year commitment for establishing the program.  It will take three seasons for people to “buy in.”  Properly launched and executed, you will get a tremendous amount of PR from the local media.  You may even want to bring in some local sponsors and affiliate your program with a local charity.

So, the answer is YES – properly designed, marketed, and executed, a Christmas program can be a wonderful addition to your park’s business and your community’s Holiday experience.

Be sure when you dismantle the program, you carefully and strategically store the decorations so you do not lose any and they can be easily installed the following years.

Each market is different and each park has its own personality; however, done properly, you can create a wonderful seasonal and family event.  I would try it.

Six Flags Holiday in the Park Concept Art

Winterfest 1985 at Kings Island

The Return of Winterfest at Paramount's Kings Island

Six Flags Holiday in the Park - 2015