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 270 workers, and generates $51 million annually, while the average arcade establishment employs about 15 workers, and generates $1.9 million annually.

    • The amusement park industry includes about 500 establishments that employ about 136,000 workers and generate about $25.7 billion annually. The arcade industry includes about 2,800 establishments that employ over 42,760 workers and generate $5.3 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
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            May 14, 2024 - Summer Growth Expected for Theme Parks
                            • The International Association of Amusement Parks and Attractions (IAAPA) projects an estimated 2% increase in North American theme park attendance in summer 2024. The uptick will bring the 2024 attendance total to over 300 million visits. Consumer spending at theme parks is expected to rise 7% in 2024, reaching $32 billion. According to President and CEO Jakob Wahl, “We’re seeing consumers shifting spending from material goods and instead investing in those trips and memories with family.” Wahl noted that many parks have invested in new family entertainment experiences, such as the new Penguin Trek at SeaWorld Orlando and Good Gravy at Holiday World in Indiana. Parks have also expanded technology and inclusiveness; Peppa Pig theme parks are certified autism centers, and new technology at the Wild Waves Theme and Water Park in Washington allows season pass holders to load their digital passes onto their Apple or Google Wallet.
                            • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                            • 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.
                            • 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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