Europe’s Theme Parks
War – specially coupled using a globally sluggish economic climate – has a contradictory impact on the consumption of entertainment. Disposable incomes plummet curtailing the sales of medium to large ticket products including cruises and resort vacations. But individuals – besieged by anxiousness and negative news – also wish to become diverted. As the conflict rages, they keep indoors and tune in. Property entertainment booms. But when physical insecurity abates, consumers go out in full force mobbing movie theatres and theme parks, producing up for lost time and frayed nerves.
A Solomon Smith Barney report, published in December 2002, concluded that big cap entertainment stocks plunged by 32 percent throughout the prior skirmish within the Gulf. Stocks of destination travel web sites and cruise lines took an even harsher beating, plummeting by 52 percent – this in spite of the counterintuitive resilience of amusement parks to military and political unrest.
In anticipation from the next round of fighting, these stocks are trading at valuations beneath even the traumatic tail of 2001. Even though faster than other types of equity to recover postbellum, this holds accurate only for brief and decisive conflicts.
Analysts frequently monitor the overall performance of theme and amusement parks to divine trends within the business as a complete. This would prove impossible in Europe where the culture of theme and entertainment grounds is still in its infancy.
Denmark has Legoland and Tivoli. France boasts the recently recovering Disneyland, Vulcania and Futuroscope. Germany has Phantasialand. Italy sports Gardaland. Spain joins the continent’s minimal offerings with Port Aventura and Terra Mitica. The Dutch De Efteling spent the last decade “Americanizing” its facilities.
Only the United Kingdom has greater than a smattering “pleasure beaches” and “worlds of adventure”. A not too long ago mooted Dracula theme park in Romania was shot down by irate citizens and an overweening bureaucracy. “New Europe” is no greater than “Old Europe” with regards to entrepreneurship.
In each industry penetration and spending per visitor, Europe is at least a decade behind the USA. Indeed, the eerie paucity of theme parks is symptomatic of the generally moribund, rigid and hyper-regulated economies with the European Union. The continent has less than half America’s variety of parks per ten million denizens and 1 third its visits per head per year.
Only 20 key European attractions garner more than 1 million in annual attendance. An additional 50 or so attract much less than 1 million patrons. With revenues of c. $2 billion, Europe’s parks combined amount to 1 third the sector within the USA and underperform a lot of parks in Asia as well.
European firms are nevertheless woefully primitive in terms of marketing and educating their public. Based on the Financial Research Associates, a consultancy, venture capital is uncommon and usually squandered by developers on wages and also other “soft”, non-productive charges. Management is inexperienced and peripatetic.
In Asia, theme parks are regarded as the magic pill. Japan has Disney Planet and the Tokyo DisneySea Park. Disney is slated to open a giant franchise in Hong Kong in 2005. Mainland China is eyeing the experiment favorably. Universal Studios countered by inaugurating a themed playground in Osaka in 2001 and by embarking on three feasibility studies in China.
From Jakarta, Indonesia (the Taman Ria amusement park) to Vietnam – everybody is climbing on the bandwagon. There appears to be a dearth of American interest in Europe regardless of its far greater buying energy along with the existence of a single company address – the European Commission.
Theme parks are multifarious organizations. They offer perform to thousand of small suppliers within a virtuous ripple impact. Hosting and gaming professionals, marketers, managers, on-site employees, suppliers of logistics, food retailers and caterers, entertainers – all advantage mightily from the presence of such grounds. The park’s brand is usually parlayed into trinkets, toys, clothes and souvenirs sold by locals to tourists, each domestic and foreign.
Destination travel is actually a growth sector.
The International Association of Amusement Parks and Attractions, a trade group, reported that worldwide park attendance was up 1 quarter in between 1991-2001 to 319 million individuals. In the course of this decade, revenues perked up by 50 percent to practically $10 billion annually. This was largely due to a rise in per capita spending within the grounds from $23 to $30. Returns on – normally massive – investments are impressive even in saturated markets such as the United states of america.
The profitability of theme parks often balances losses spawned by much more glamorous bits of entertainment groups. Amusement grounds – themed or not – are astoundingly immune to geopolitical upheavals. Attendance in Disney’s US parks declined by only c. 5 percent during the 1991 Gulf War. Even September 11 failed to dent it measurably.
EuroDisney is partly to blame for the scarcity of themed parks in Europe. For a lot of years it was perceived, quite appropriately, as an insatiable white elephant gulping rivers of red ink. Reality moved on but impressions – fostered by smug pundits – lasted. Wary investors and governments all through the Old Continent confined themselves to the mainly family-operated “garden parks” and “carnival grounds” constructed during the 1960s and 1970s.
The truth is that Disney’s Parisian adventure is flourishing. The entertainment behemoth is organizing to invest c. $540 million in Walt Disney Studios, an annex in the French outfit. This is projected to add 5 million visitors for the existing 12.
Yet another happy investor is Six Flags. The operator not too long ago expanded to Mexico and Europe where it runs the six internet sites from the former Walibi Parks and Film world, an erstwhile Warner Bros. house in Germany. It soon added a Spanish Movie Globe to its portfolio. Non-US operations already account for 15 percent of its sales.
But they are the exceptions that prove the rule. Europe is staid and significant. It prefers indigenous high-brow culture to American low-brow imports. Or so the French would have us all think.
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