LightShed Ventures partner Rich Greenfield unpacks the amusement parks earnings on The Claman Countdown.
Some of the top theme park operators in the U.S. have seen a drop in revenue as family budgets continue to be stretched amid high inflation and rising costs.
Disney, Universal and Six Flags have all reported lower second-quarter earnings for their theme parks this year.
It marks a roller coaster few years for the industry following a surge in visitors after the pandemic.
As well as high costs for families, operators say Americans have begun to favor international trips and cruises over parks given the strength of the dollar.
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Visitors ride the roller coaster Scream at Six Flags Magic Mountain in April 2021, in Valencia, California. (Valerie Macon/AFP via / Getty Images)
Last week, Disney announced revenue at its theme parks had increased by 2% to $8.4 billion in the latest quarter compared to the same time last year. However, overall operating profit had dropped 3% to $2.2 billion.
It comes after the company last year announced it will spend around $60 billion over the next decade to expand capacity at its parks and cruise lines worldwide. The increase in capital expenditures is being spent on the parks, experiences and products (DPEP) segment of its business and was touted as being nearly double what it spent on the DPEP over the past 10 years.
The Magic Kingdom, Disney’s flagship theme park in Florida, is set to undergo the largest expansion in its 53-year history with one new “land” devoted to classic Disney villains and another focused on Pixar’s “Cars” movies, the New York Times reports. The Disneyland Resort in California will add a water-based “Avatar” themed ride and its first “Coco” attraction.
Comcast, which owns Universal Destinations & Experiences, reported a 10.6% drop in its second-quarter results compared to the second quarter of 2023.
“Revenue for theme parks decreased primarily due to lower revenue at our domestic theme parks, driven by lower guest attendance, as well as the negative impact of foreign currency at international theme parks,” the company wrote in its second-quarter 2024 results report.
“Other travel options, including cruises and international tourism given the strength of the dollar, have experienced their own surge in demand, which cause visitation rates at our parks to normalize,” Comcast President Mike Cavanagh said on the company’s earnings call last month, the Wall Street Journal reports.
Meanwhile, Six Flags, reported Thursday that its total revenue had dropped 1% in the second quarter and guest attendance had dropped 2%.
The company said that since the end of the second quarter, difficult weather conditions, including the impacts of Hurricane Beryl and record heat and rain across much of North America impacted demand at several parks.
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Based on preliminary results, attendance for its combined portfolio over the five-week period ending on Aug. 4, totaled 10.9 million visits, which was down 3% compared with combined attendance for the same five-week period last year.
Six Flags says a majority of the attendance decline can be attributed to four parks where operations were either partially or entirely disrupted by macro events, including a utility disruption at Michigan’s Adventure, excessive flooding at Valleyfair, and the effects of Hurricane Beryl on the Galveston and Houston water parks.
People ride the Wonder Woman Flight of Courage roller coaster at Six Flags Magic Mountain in Valencia, California, in July 2022. (Hans Gutknecht/MediaNews Group/Los Angeles Daily News via Getty Images / Getty Images)
Excluding these four parks, attendance over the balance of the combined portfolio was down 1%, or approximately 150,000 visitors.
“Although demand over the last few weeks has been affected by exogenous macro factors, we remain pleased with the broader attendance trends, largely supported by the robust season pass sales programs and strong group bookings,” Six Flags Entertainment Corporation President and CEO Richard A. Zimmerman said in a statement.
“Based on the solid attendance patterns earlier in the year, as well as the strength of our advance purchase channels, we continue to believe the underlying demand for the entertainment value of our parks remains strong, which positions us well for the balance of 2024 and beyond,” Zimmerman said.
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Universal Studios Florida theme park in Orlando (iStock)
Earlier this summer, Six Flags Entertainment Corporation merged with Cedar Fair Entertainment Company. Six flags said the merger formed the “largest” amusement park operator in North America, with a new combined portfolio of 42 parks across the U.S., Canada and Mexico.
The merger puts the estimated value of the company at $8 billion.
Len Testa, the president of the trip planning website Touring Plans, told Axios that the average cost of a Walt Disney World vacation – for a family of four over four days – has gone up nearly $1,000 since 2019.
He added that the overall decline in visitor numbers can also be attributed to theme parks not building new rides.
