The State of the Global Attractions Industry is Strong
Early 2023 Insights
With three months of the operating year now in the books, optimism is rising for a successful year across all regions of the world. While the winter months limit operations at attractions in the northern hemisphere, attractions located in the southern hemisphere have enjoyed strong attendance and revenue. Some Florida operators report a “best-ever” spring break period. In addition, many operators shared COVID-19 cautions and impacts are firmly a challenge of the past or waning quickly.
The insight and analysis below are provided by the IAAPA Board of Directors, a collection of 25 attractions industry professionals representing a dynamic tapestry of owners, operators, suppliers, manufacturers, service providers, and leaders working around the world.
Trends and Challenges
Several trends and challenges have emerged in 2023:
- Operators have identified a new guest sentiment of “living in the moment” or carpe diem. The “reprioritizing of life” to spend additional time with family and friends has changed attitudes, leading to greater visitation to an attraction where memories can be made. This has led to higher spending in some countries.
- The lingering effects of COVID-19 appear to be evaporating for operators in 2023. Restrictions are greatly reduced or eliminated across the globe, allowing guests to return to attractions near them.
- Established parks across many regions will open overnight accommodations in 2023. Like a themed attraction, several of these new resorts sport decor that matches a story created for the new property. Planners are not simply building an on-site hotel, rather, they are creating themed lodging options that will drive additional revenue.
- Late-season snowfall in Europe and wet conditions in North America—especially California, where attractions enjoy year-round operation from San Diego in the south to the San Francisco Bay area in the north—have affected attendance, revenue, and construction of capital projects. In California alone, some operators report first quarter revenue missed expectations with rain cited as the culprit.
- Finding and retaining an adequate seasonal workforce continues to be a challenge at attractions in 2023. Yet, many North American attractions report recruiting efforts (including new internship programs) have produced a higher volume of employees thus far in 2023 over 2022.
One prominent North American operator has invested capital dollars to automate processes and positions where safely possible, thus redirecting employees to other areas. Meantime, one European attraction that prides itself on employee engagement reports 75% of their seasonal staff will return in 2023. In Asia, as attractions fully reopen, some are recruiting former employees to come back to work and investing heavily in retraining programs.
- High interest rates have impacted lending options. Higher interest rates have made borrowing money to fund capital expenditures slated to open in 2024, 2025, and 2026 difficult. Some European attractions report borrowing money to invest in expansion projects may wait until interest rates drop.
- Many attractions and manufacturers continue to grapple with higher-than-anticipated inflation levels. The higher costs of goods and products have been passed on to operators, while raw material cost increases have provided challenges for suppliers.
- Operators are placing greater focus on sustainability initiatives. From incorporating sustainable planning before breaking ground on new projects to retrofitting existing assets with sustainable hardware, taking a responsible approach.
Large destination attractions across the region are experiencing strong attendance and robust occupancy at resort hotels attached to theme parks. A return to pre-COVID-19 visitation levels is attributed to “pent-up consumption.” While destination properties have reported visitation levels on par with pre-pandemic levels, regional parks have not recovered as quickly. Regional parks have seen an uptick in attendance but spending and revenue remains tepid. In China, domestic business is strong but the lack of airline flights, paired with higher ticket prices, have slowed the return of international visitors. Meanwhile, in some Southeast Asia countries, domestic attendance levels have exceeded expectations. Operators will continue to closely monitor and adjust their strategies based on the mix of domestic and international tourism.
Europe, Middle East, Africa
Anticipation for the approaching summer season is high, with many operators reporting record attendance and revenue in 2022. While gas prices remain high in 2023, many operators believe guest visitation levels are insulated from rising fuel costs. Several attractions will open new rides, water slides, and attractions in 2023. The new SeaWorld Abu Dhabi park opens in late May. The facility’s new rescue center is already operating as the only animal rescue and release center in the region.
Latin America, Caribbean
Growth and recovery differ according to country. Attendance in Brazil and Chile is strong, while growth in Peru has been sidelined following government instability. Meantime, school group sales have not returned to pre-pandemic levels in Mexico. Several family entertainment centers report making 60% of their revenue on weekend days. In the Caribbean, new cruise ships are now sailing to island nations, bringing guests and increased spending. A full recovery for the region is expected in 2024.
Many facilities across North America will debut new attractions in 2023. The 11 properties of SeaWorld Parks & Entertainment will receive investments of different sizes. In addition, a growing number of large operators are investing in limited-time festivals where exclusive food and beverage menus—mixed with live entertainment—creates an attraction within itself. From flower festivals to haunted overlays in the spring, facilities are luring guests with creative new events to drive attendance. Several operators in North America are constructing purpose-built employee housing facilities to attract seasonal workers. In Canada, the recovery has followed the United States, but operators are optimistic for a strong summer. Operators also report that while obtaining proper staffing levels is a challenge, they are optimistic on early season hiring initiatives. Meanwhile, supply chain disturbances have slowed.
Manufacturers and Suppliers
Several manufacturers continue to spend time, expense, and effort to expand their safety and accessibility footprint. The manufacturing and supplier community has seen mixed results based on what products they produce and what category of service they provide. There is returning interest in placing orders for new equipment to fulfill future capital expenditures in North America, Europe, and the Middle East. Additions of a large nature (new hotels, indoor water parks, and signature rides) have provided optimism. However, orders for new hardware has cooled in China, which enjoyed 10-15 years of growth before the global pandemic. The rising cost of raw materials remains a concern for some manufacturers and suppliers. Ride and equipment components such as steel and electronics are on the rise. Shipping costs from fabrication centers to attractions is reported as elevated in 2023 as well.