United States Amusement and Theme Park Industry - Growth, Trends, and Forecasts (2020 - 2025)
United States Amusement and Theme Park Industry is expected to register a growth rate of more than 3.5% during the forecast period 2020-2025 as a result of the increasing adoption of the technological advancements in the form of augmented and virtual reality. The inculcation of advanced motion simulators, hydraulics and pneumatics along with the focus on customers’ experience is expected to increase the market demand in the coming years.
The market is relatively fragmented with around 20% shares held by the top five companies that include Disney Parks and Resorts, Six Flags, Universal Parks and Resorts, Cedar Fair and SeaWorld. With the advancement in social media marketing and technological updates, the consumers are looking forward to a personalized experience in terms of their itinerary planning and bookings. The competition within the industry has increased with the introduction of AR & VR gaming centres, live concerts and movie theatres that require comparatively less time and ensure a great experience. The Chinese tourists, overall, are the third-largest source of overseas tourism after the UK and Japan to the United States, of which around 47% prefer to visit the amusements parks as their prime location.
Key Market Trends
Integration of IoT and Supply Chain Management
The supply chain, that includes the customer and staff management is being efficiently managed using the IoT. The parks are now using Radio Frequency Identification (RFID) for Automatic Identification of Data Collection (AIDC). For instance, RFID devices like Universal’s TapuTapu bands and wrist bands introduced by Disney, not only take care of the admission and itinerary of the customer but also ensure a free-hand experience while earning points and getting recommendations on rides simultaneously. Disney allows the takeaway of its wristband that acts as the physical reminder of the fun experience at home and stimulates their revisiting frequency. RFID also helps in crowd management, arrangement of the parking facilities, security and provides the analytics on the areas of improvement, hence helps to bring about real-time strategic changes. The mobile app supports the ticketing facilities and focuses on providing a personalized experience to the customers. The AR and VR technologies are intensively being used to update the traditional rides which have led to an increase in the number of visitors expecting a new experience every time they visit. Big companies like Disneyland has come up with Star Wars: Rise of the Resistance in January 2020 while Universal is planning on introducing the facial recognition ride with the help of Sky Limited and give a real-time experience to the customers. The technology is also used for the promotional activities through virtual demonstration of the parks to the customers and getting them involved. For customer-base available online, these companies are developing customer engagement platform that provides them with full information about the parks and attracts them with interesting offers and membership benefits; one of which is Disney+ launched by Disney in November 2019.
As per the industry reports, the technological advancements along with the rise in the consumer expenditure in the US, the number of visitors has significantly increased.
Arms Race within the Industry
The consumers now, tend to prefer immersive experience over expenses. As the experience economy continues to grow, the parks are now updating their services that can keep up to the ever-evolving expectations of teens as well as of the ageing generation. Many big players like Disney, Universal and Six Flags are on their way of achieving this type of immersive environment (Disney is coming up with magic bench, rides with mood sensors and face and gaze recognition). In order to achieve an advantage over other players, securing a high level of intellectual property (IP) has become very crucial for the companies. An IP, if properly utilized, can prove to be a very strong source of gaining and retaining customers. A popular IP comes with a risk and performance pressure on the company. For instance, millions of visitors were excited to see Universal’s Wizarding World of Harry Potter which eventually failed to deliver the experience that the fans expected. This disappointment in fans resulted as a major setback for the chain and was reflected as a fall in the growth of the number of visitors of the park after its launch in April 2016.
The technological opportunities in the industry is allowing a number of startups and small players to enter and establish themselves at a relatively lower cost. The big players like Disney, Universal and Six Flags are undergoing mergers and acquisitions ensuring impactful expansion as well as creating a higher ticket pricing opportunity. Recently, UFC collaborated with ESPN (a Disney owned Company) for a 5-year distribution deal which resulted in an increase in 525,000 subscribers on the very first telecast. Also, Comcast (owner of NBC Universal) acquired Sky Limited and will further use its technologies to develop the RFID devices like wrist bands, cameras and sensors within the park.
The companies in the industry are focusing on acquiring the relevant IPs incurring the least possible cost. One of the strategies used by the companies to create a competitive advantage for themselves is by creatively using the already existing underutilized IPs integrated with the current trends and present them in a unique way.
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