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 3,300 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 employs 330 workers, and generates $40 million annually, while the average arcade establishment employs about 20 workers, and generates $1.2 million annually.
- The amusement park industry includes about 500 establishments that employ over 162,000 workers and generate about $18 billion annually. The arcade industry includes about 3,000 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. Dave & Busters is a large firm with arcade operations.
- 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
Recent Developments
Mar 13, 2024 - Producer Prices, Wages Increase
- According to the Bureau of Labor Statistics (BLS), producer prices for amusement and theme parks rose 6% in December 2023 compared to December 2022 and were 18% higher than in 2019. Employment levels for amusement parks and arcades fell 5% in December 2023 from a year ago but remain 2.5% higher than pre-pandemic figures in 2019. As the labor market remains competitive, wages for amusement, gambling, and recreation firms have increased by 4.1% in December 2023 compared to December 2022 and rose 24% from 2019. Average hourly wages reached their highest level last year in Q4 2023, per the BLS. Additionally, Reuters reports that consumer spending levels grew in the second half of 2023, with a 3.1% increase in the third quarter and 2.8% in the fourth quarter.
- According to a recent ConsumerSignals survey by Deloitte, more discretionary categories, including recreation and entertainment, leisure travel, restaurants, and electronics, represented an estimated 22% share of consumer’s wallets in January, up slightly from a year ago. According to the Spending Intentions index, global total spending intentions remained consistent in January compared to December and were significantly higher than a year ago. Spending intentions have gradually returned to their 2021 levels after inflation stunted global spending confidence. The survey also revealed that over 60% of survey respondents reported their finances had either remained the same or improved in the past year, up from 58% a year ago.
- Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
- Amusement park and arcade operators will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
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