Amusement Park Report – 2019

TO: TRC Inc.

SUBJECT: Theme park report

I am pleased to enclose “Amusement Park Report – 2019.” The report contains the achievability
of constructing a new amusement park for TRC Inc. This information is provided through
statistics of domestic theme parks in the United States, based on: costs, revenue, attendance,
expected growth, employment, demographics, and competition. With the predictions based off
these statistical trends we can conclude the achievability of constructing a new theme park in the
current United States market and how it will affect where the park is established.

I know that this report will provide TRC Inc. with the information needed to assess the
possibility of opening a new theme park in the state of Illinois. Please contact me if you have any
questions about this report or if you require any additional information. I may be reached at
(603) 141-1151 and by email at worytko@aol.com.

Kevin Worytko
Kevin Worytko

College of DuPage Student

worytko@aol.com
 Amusement Park Report – 2019

AMUSEMENT PARK REPORT

TRC, Inc. 2019 Analysis

Prepared by Kevin Worytko

Student at College of DuPage

Report Distributed May 3, 2019

Prepared for Writing for the Workplace

ENGLI-1105
 Amusement Park Report – 2019

Abstract
This report examines the possibility of constructing a new theme park for TRC Incorporated in
the state of Illinois. This information is provided through statistics of domestic theme parks in
the United States, based on: costs, revenue, attendance, expected growth, employment,
demographics, and competition. With the predictions based off these statistical trends we can
conclude the achievability of constructing a new theme park in the current United States market
and how it will affect where the park is established.
 Amusement Park Report – 2019

Table of Contents

Abstract ................................................................................................................................. i

Executive Summary ...............................................................................................................1

INTRODUCTION .................................................................................................................2

The state of theme parks.........................................................................................................2

Key external factors ...............................................................................................................2

Current State of Theme Parks.................................................................................................3

Revenue...................................................................................................................................3

Costs........................................................................................................................................4

Attendance ..............................................................................................................................5

Expected Growth.....................................................................................................................5

Jobs created ............................................................................................................................6

Key External Factors ..............................................................................................................6

Demographic ..........................................................................................................................6

Competition.............................................................................................................................7

CONCLUSIONS.....................................................................................................................8

WORKS CITED .....................................................................................................................9

 Amusement Park Report – 2019

Executive Summary
This report examines the possibility of constructing a new theme park for TRC Incorporated in
the state of Illinois. This information is provided through statistics of domestic theme parks in
the United States, based on: costs, revenue, attendance, expected growth, employment,
demographics, and competition. With the predictions based off these statistical trends we can
conclude the achievability of constructing a new theme park in the current United States market
and how it will affect where the park is established.

Current state of theme parks – includes the current revenue and costs included with operating an
amusement park. This includes statistics of: costs, revenue, average park attendance, and
predictable growth.

Key external factors – covers the major external factors that can affect the business of a new
amusement park.

With all the factors registered and calculated, it is entirely possible to be able to establish a new
successful amusement park. This can be seen by observing the statistics for the United States’
theme park attendance and predictable growth. Due to both attendance and theme park market
share increasing gradually, the demand for more amusement parks is clear. However, due to the
other five major theme park companies, it is suggested that the development of the park should
be small to medium in terms of size. Based off recorded statistics of revenue and costs
coinciding with the economy, this arrangement will be the most likely to enter the market easily.
 Amusement Park Report – 2019

Introduction
Amusement parks have a larger history than expected. Theme parks date back as early as 1133 in
England, but went through a large mechanical innovation in the 1860’s, when the first steam-
powered carousels were introduced. In fact, an early precursor to the modern amusement park
would be the World's Columbian Exposition in Chicago, Illinois, dating back to 1893. The theme
park business declined during the Great Depression and World War II as many families moved
from urban to suburban environments, and television became the newest form of entertainment.
As media and entertainment expanded, so did the possibilities for parks, creating new adventures
and experiences for people worldwide.

Current state of theme parks

Currently, theme parks are still popular to this day as people are still looking for thrills and
excitement that the whole family can enjoy. It remains popular as there is still competition
between major park owners such as: MGM Resorts International, Merlin Entertainments,
LEGOLAND, Six Flags Entertainment Corp, Universal Studios, and the Walt Disney Company.

• Revenue – Disney alone has accumulates a revenue of $20.29 billion globally in 2018.
• Costs – $11.93 billion in the united states is used to keep theme parks running.
• Attendance – The theme parks of Universal Parks and Resorts were attended by a total of 49.46
million people in 2017.
• Expected growth – In 2017 the top twenty-five theme parks have increased in volume by 4.7%.
North America had steady results of 2.3% in attendance exceeding 150 million visits for
the first time.
• Jobs created – In the United States of 2018, there were at least 51,400 people employed at
amusement parks.

Key external factors

• Demographic – The largest demographics are 18-29 year-olds at forty-six percent.
• Competition – Larger known companies such as: MGM Resorts International, Merlin
Entertainments, LEGOLAND, Six Flags Entertainment Corp, Universal Studios, and the Walt
Disney Company.

Revenue
The majority of their revenue from admissions and rides for current theme parks. This makes
them a priority when planning the construction of a new theme park. New rides will have to be
considered every year since they generate consumer interest and increase attendance.
 Amusement Park Report – 2019

Revenue of The Walt Disney Company's parks and resorts worldwide

(in billion U.S. dollars)

Carnival games and arcade machines can collect a decent amount of income within the park,
approximately 4% of the total revenue, according to goodfellowpublishers.com. There is usually
only the cost to install them and they are low maintenance. This allows them to be an easy
passive income source to install within the park without the need for advertising or accidentally
driving customers away.

Since attending a theme park is usually a full-day experience, concessions generate a large
portion of revenue, approximately 14-17% (goodfellowpublishers.com). With a percentage that
high, multiple food areas and key locations should be thought of when planning the construction
of the new park.

It is common for theme parks to sell merchandise to promote their rides, attractions, and the park
itself. As such, merchandising should not be expected to be a large income source in small to
medium sized theme parks, as it is estimated to bring in 6-10% (goodfellowpublishers.com).

Costs
The current costs of maintaining and expanding a theme park account for 80% of the revenue
generated annually. This leaves a larger than all industry average profit margin for investments
in future expansion and savings for when attendance seasonally goes down.

• Purchases- When it comes to land, construction, permits, and other parts, the most recently-
completed Disney park in Shanghai costs $5,500,000,000 dollars.
 Amusement Park Report – 2019

• Depreciation- Approximately for a $15 million park, the average of $423,732 for Year 1 of
cash flow, according to costsegregationservice.com.
• Utilities- For Disneyland, operating one park costs an average of $3.25 million for a day.
• Other- Depending on the lawsuit/situation, the cost could be approximately $20 million.

When it comes to the theme park industry, manpower is what keeps the park afloat.
Administration, ticket stalls, concession stands, stores, ride operation, and maintenance. Due to
the large need for these jobs, wages are the largest cost when budgeting a theme park.

When it comes to rides, many can be operated and maintained without the need of purchasing
new ones should it break down. Park maintenance for safety is both significant and a priority.
The annual capital investment will be large, making depreciation a large annual expense. While
one can hope an amusement park will never have legal problems, it is always good to invest to
then be prepared for a worst-case scenario.

Attendance
Attendance is a crucial factor on how well the theme park industry is now and will be in the
future. If attendance trends continue as suggested by Figure 3, the theme park industry will
continue to grow slowly. If attendance trends stay the same they will lead to economic growth of
not only the theme park but also the surrounding areas.
 Amusement Park Report – 2019

Attendance of Theme Parks in 2017 (in Millions)

Expected Growth
With more people coming in every year, the park revenue will also slowly increase and is
projected to steadily increase in the future. With steadily increasing revenue, theme parks will be
able to stay operational, pay the employees, and even create new rides to stay relevant in the
consumer’s eyes. Increased revenue will also allow quality sanitation services. If attendance
growth continues at the same rate, ticket prices should be able to stay at acceptable prices,
whether they are kept the same or a miniscule increase.

KEY EXTERNAL FACTORS

The largest factors to consider when dealing with amusement parks are, school seasons,
competition, weather, and even the economy.

Approximately 90% of the theme park market are domestic attendees. With this information,
international attendees aren’t seen as a priority, as they are more likely to attend large parks.
According to the market, the most common visitors are younger than 18-year-old and visitors
between the ages 18-44. Based off potential growth, younger generations will continue the
demand for theme parks to continue, along with their families. This makes younger visitors the
primary target demographic for amusement parks. With them being the primary demographic,
late spring to early fall is the ideal time for admissions.

Competition
The theme park industry is hard to enter due to the current competition worldwide. However,
opportunities exist for smaller parks if the right decisions are made. These would be based on
admission price, marketing, and location. If the park was built in the right place, we can have
even more customers come in from the surrounding states. The entry costs may still be high
when initially entering the market, due to land purchases, permits, forms, public facilities,
employment, rides, attractions, and concessions, it will drop once the park is doing good
business.
 Amusement Park Report – 2019

CONCLUSIONS
With all the factors listed above, it is possible to establish a new, successful amusement park.
The possibility of opening a new park is very likely in the United States, based off the current
attendance and potential growth. With attendance growing steadily, the demand for more theme
parks is evident. Due to the amount of larger theme park companies, it is advised that the park in
question should be designed to be small to medium sized. Based on revenue and cost trends, this
is the safest approach to entering the market.
 Amusement Park Report – 2019

Works Cited
“39-3091 Amusement and Recreation Attendants.” U.S. Bureau of Labor Statistics, U.S. Bureau
of Labor Statistics, 29 Mar. 2019, www.bls.gov/oes/current/oes393091.htm.

“The Business of Theme Parks (Part I): How Much Money Do They Make?” TheParkDatabase,
www.theparkdb.com/blog/the-business-of-theme-parks-part-i-how-much-money-do-they-make/.

Roen, Terry. “Theme Park Demographics Changing: Higher Incomes and More
Millennials.” Orlando Rising, 24 Apr. 2017, orlando-rising.com/theme-park-demographics-
changing-higher-incomes-and-more-millennials/.

Fuller, Steve. “Topic: Amusement and Theme Parks.” Www.statista.com,

www.statista.com/topics/2805/amusement-and-theme-parks/.

https://www.goodfellowpublishers.com/free_files/Chapter%2010-
f5d89c30697d8d2cdaed6b944079ed3f.pdf

“Amusement Parks - Cost Segregation Benefits.” Cost Segregation Services, 19 Apr. 2017,
costsegregationservice.com/amusement-parks-cost-segregation-benefits/.