Amusement Parks and Arcades

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 3,800 amusement parks and arcades in the US offer a variety of rides, games, or other attractions for entertainment purposes. Amusement parks include theme parks, water parks, boardwalks, and piers, which offer a variety of rides, shows, restaurants, and retail shops. Arcade operators include electronic game arcades, family fun centers, indoor play areas, pinball arcades, and video game arcades.

Seasonality and the Weather

The amusement park industry is highly seasonal and subject to uneven cash flow.

Capital Intensity of Development

Amusement park operations are highly capital-intensive, with firms investing millions to develop, upgrade, and expand facilities.

Industry size & Structure

The average amusement park establishment operates out of a single location, employs 406 workers, and generates $50 million annually. The average arcade establishment operates out of a single location, employs about 22 workers, and generates $1.4 million annually.

    • The amusement park industry includes about 470 establishments that employ over 162,000 workers and generate about $20 billion annually. The arcade industry includes about 3,400 establishments that employ over 66,000 workers and generate $4 billion annually.
    • The amusement park industry is concentrated; the top 50 companies account for 97% of industry revenue. The arcade industry is more fragmented; the top 50 companies account for 56% of industry revenue.
    • Large domestic amusement park operators include Walt Disney Co., Seaworld, and Cedar Fair. Large firms may have operations in foreign countries. The arcade industry consists mainly of independent operators. Large firms with arcade operations include Gameworks and Dave & Busters.
    • The most-visited theme parks in the US include the Magic Kingdom, Disneyland, Disney’s Animal Kingdom, EPCOT, Disney’s Hollywood Studios, and Universal Studios.
                            Industry Forecast
                            Amusement Parks and Arcades Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            Nov 5, 2022 - Attendance Rebounds
                            • Travel remains strong ahead of the holidays, according to executives at hotel chains, cruise-line operators, vacation-booking platforms, and other leisure companies. Executives said in recent earnings reports that the desire to spend on experiences is overcoming concerns about inflation and the economy. NBCUniversal’s theme parks are packed. “It kind of defies logic a little bit,” said Jeff Shell, CEO at NBCUniversal. “People at the beginning of the pandemic were spending unlimited amounts on home improvement, on Pelotons, you name it, and the bloom is off that rose entirely,” Hyatt Hotels CEO Mark Hoplamazian said. “What they’re now spending on is experiences.”
                            • A safety program called The Leisure Equipment and Asset Protection Scheme (LEAPS) has been developed for attractions assets from roller coasters and amusement park rides to high ropes courses, trampolines parks, aqua parks and, more. The goal of LEAPS is to offer assurance to the public that the three main causes of accidents are managed within an attraction: Competent Operator, Safe Asset, and Competent Inspector. These are known as the three LEAPS stars. LEAPS certification will be awarded to facilities that meet all three of the safety standards.
                            • Adventureland in Altoona, IA, closed two rides due to supply chain issues that could impact rider safety. The park's Storm Chaser ride won't open again until 2023, and its Sidewinder is closed as the park awaits parts for the ride. The Sky Ride remains closed as the park continues an extensive safety review.
                            • Improvements made during pandemic-mandated closures could lead to a more profitable amusement park industry, according to research and analytics firm S&P Global. Companies identified efficiencies, updated rides, and improved experiences, changes which executives say will drive bigger returns. Some improvements focus on attraction upgrades, but operators implemented others for pandemic-era health and safety precautions. Many now offer touchless payment systems for in-park purchases, including tickets. Digital queues help keep customers from standing in long lines, and self-pay systems for food orders reduce contacts between customers and staff. In addition to easing health and safety concerns related to crowded venues, the upgrades also created financial efficiencies for operators and in some cases allowed for upselling opportunities. Mobile-app-based food-and-beverage ordering, self-service check-in kiosks at resort hotels, interactive smartphone park maps, and other technology solutions introduced or enhanced during the coronavirus pandemic to allow for safe operations are popular, especially among Generation Z, and are likely to remain in place, according to a study by technology developer Oracle Food and Beverage and park operator Merlin Entertainments.
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