Analyses - February 4, 2005



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February 2005


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Amusement parks: What can we expect in 2005?

The opening of the gigantic Tropical Islands theme park just outside Berlin has all of Europe talking. What amusement park trends will emerge in 2005? +++ The Commentary from Liping A. Cai, Professor and Director at the Purdue Tourism & Hospitality Research Center.

Water play

One segment in particular seems to be enjoying exceptional growth: indoor waterpark/hotel resorts. Although this trend could be a passing fancy, recent developments in this sector are too significant to ignore.

In North America, hotels with indoor waterparks are becoming increasingly popular and will continue to develop at a faster rate than the traditional hotel sector. In fact, according to some experts, in 2005 this new type of resort will experience an annual growth rate of 23% to 29%, while traditional hotels will only grow 1.3%.

Many facilities have already opened their doors and more are on the way. For example, in January 2005, Ripley Entertainment broke ground on a hotel/waterpark/aquarium complex in Niagara Falls.

This CA$200-million project is one of Ontario’s latest major family resort destinations. Covering 25 acres (10.1 hectares), the complex will include a 406-suite hotel (the Great Wolf Lodge), an indoor waterpark and an aquarium (to be built in 2006). Once the entire development is completed, it is expected to draw 2.5 million people annually.

Like the city of Orlando, Florida, Niagara Falls is developing at an incredible pace. Over the past few years, various tourist projects have transformed this small industrial town into a veritable vacation destination. Over 40 hotels and motels have been built in the past decade and the tourism industry pumps more than CA$1.73 billion into the local economy each year.

When asked about changes in the theme park industry, Philippe Pichon, Director of Development for Grévin & Cie in France*, emphasizes that locating a hotel near attractions (aquarium, waterpark, shopping mall, casino, museums, restaurants, etc.) creates a “one-stop shopping” effect that keeps customers on-site for an additional day or two. Captive visitors tend to take part in “local” recreational activities and stay close to the hotel.

In the medium term, it would not be surprising if this type of pairing (hotel/indoor waterpark) also became popular at winter sports resorts, golf courses, convention centres, etc.

Other changes on the horizon in 2005

  • Technology. According to Philippe Pichon, European parks are not likely to scramble for high-tech additions. Such a strategy requires a level of investment that only the United States can afford. Along these lines, in January 2005, LegoLand California announced it would build five new attractions at a cost of US$5 million, thanks to a significant increase in earnings in 2004 (+11%).
  • The China factor. China represents an enormous potential market, but it is uncertain whether it will turn out to be the expected windfall because only a small portion of its population can afford to visit a theme park. Mr. Pichon believes that it would probably be more profitable to develop recreational projects designed especially by and for the Chinese. Activities should be based on the Chinese culture and admission fees should be adapted to the Chinese standard of living. However, American amusement parks like Disneyland are unquestionably very popular among Asian tourists.
  • Distribution channels. Distribution channels are not likely to undergo any major changes. However, theme park operators could use the Internet more efficiently to enhance customer loyalty through targeted marketing campaigns.

The year 2004 in review

According to recent estimates from trade magazine Amusement Business and research firm Economic Research Associates, attendance at the United States’ 50 top amusement parks jumped nearly 4%, the first significant increase since the terrorist attacks of 2001 (this compares to the 2.2% rise recorded for the world’s 50 most-visited parks).

Some reasons behind this increase are the weaker US dollar (which probably encouraged European tourists to stay longer and spend more) and the desire of Americans to stay close to home.

Major amusement parks are fighting a fierce battle for customers: millions are spent on new attractions each month, each one larger and more modern than the next. For example, the Six Flags Group has announced five new “adventure” rides for its parks, including the Halfpipe, a U shaped, 100 foot high roller coaster in Denver, Colorado.

There is also the growing phenomenon of Retailtainment (a combination of retail and entertainment) (for more information, see Les parcs à thèmes en Amérique du Nord: maturation, consolidation et diversification). By transforming an entire shopping mall into an adventure, operators can hold the interest of both local and foreign visitors for several hours.

In Europe, the year was marked by two phenomena: profit margins dropped 7 to 9% and attendance fell. This was due to poor weather and the fact that demand was spread among an increased number of European products. Fortunately, average spending increased, which helped maintain overall sales.

As for the theme-park clientele, it is ageing. Although the children of baby-boomers are taking their own young families to amusement parks, these children are still too young – 0 to 10 years old – to constitute a new, distinct market segment. And teens do not have the purchasing power of baby-boomers. Furthermore, today’s young parents are less attracted to amusement parks. They seek educational opportunities and so prefer theme parks like Vulcania and Futuroscope.

* Grévin & Cie is a French company that operates thirteen recreational facilities (amusement parks, tourist sites, nature and animal parks) in the Netherlands, Switzerland, Germany, Great Britain and France, including Astérix Park and the Bioscope. In 2005, the company intends to pursue its Europeanization strategy. Finally, Grévin & Cie was also the company that wished to purchase Montreal’s La Ronde amusement park in the winter of 2000.

See also

On the web:
– Amusement Theme Parks
Great Wolf Lodge
– Grévin & Cie
– Futuroscope  

– Orlando Sentinel. «Forecast 2005: Theme parks outlook», 10 janvier 2005.
– USA Today. «Attendance at theme parks increases, reversing 2 years of decline», 13 décembre 2004.
– Fink, James. «Ripley’s Great Wolf start $200M N.F., Ont. project», The Business Journal (Milwaukee), 18 janvier 2005.
– Michelmore, Bill. «Indoor water park on tap», The Buffalo News, 15 janvier 2005.
– La Dernière heure. «À la recherche d’armes de distraction massive», 11 juillet 2004.

Commentary from Liping A. Cai

Many amusement parks feature water-based themes or activities, which can be created entirely man-made or staged with the natural setting of a water space. However, not all amusement parks contain water-based themes or activities for visitors; and the latter do not necessarily take place in the context of the former, which are mostly outdoors. Are the indoor waterparks within or adjacent to a hotel complex considered amusement parks? The author, who notes the increasing popularity of indoor waterparks as a trend, seems to believe so. Without engaging in a dispute on the definitions of amusement parks and indoor parks, it is perhaps more conducive to debate the role and trends of water-based themes and activities in developing a destination, be it a beach (lake) community, an amusement (theme) park, or hotel resort.

Water has been a product attribute of a destination as long as there has been leisure travel. It is presented in two major forms to please the senses and desires of visitors and guests. One form is natural, such as a scenic lake or river. The other is man-made, such as fountains and electric-powered waterfalls in an urban park. These two forms are certainly not mutually exclusive. A lakeside resort features both forms. The indoor waterparks and the pairing of hotel and waterparks are more tipped towards the man-made than the natural. A viable topic of inquiry is what underlies the popularity. Is it another me-too fad driven by competition for product differentiation? This is then not the first time that hoteliers have tried a water-based product attribute or amenity – whirlpools and Jacuzzis, indoor fountains and canals, and swimming pools even in the economy and budget hotel sector. Or, is it indeed a trend of an industry to respond to the demands of the market?

Water is life, and makes life itself possible. Water as an attraction to visitors and vacationers in the form of beach, lake, or river is rooted in the human’s dependence on and longing for water. The water flow links nature and humans through water’s many parallel functions as the “blood stream” of both the natural environment and the embedded human environment. Does the popularity of indoor waterparks suggest that the outdoor nature of water is less appealing? Do people seek a more controlled and safer environment to get close to the water flow?

It is very fitting that the author mentions the China factor in a writing that focuses on “water play” at amusement parks and hotels. The Chinese attach a great importance to water in leisure travel. In fact, an age-old Chinese idiom equates the leisure travel to “Touring Mountains and Playing Water”. If water is so significant to the Chinese visitors, then the element of water must be seriously considered in the planning and designing of destinations and recreational projects that target the China market. It is a myth, though, such destinations and projects should adapt admissions fees to the Chinese standard of living. Reports are not lacking that the Chinese traveling outside their Mainland outspend their counterparts from more developed originating countries.

Liping A. Cai
Professor and Director
Purdue Tourism & Hospitality Research Center
Purdue University

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