Sure, you could travel the world in search of new theme parks. But it really is a lot less expensive when big new theme parks come to you, isn't it?
Everyone wants "the next Disneyland" in their community. Local governments want the money from tourism taxes, while contractors long for big construction deals, flippers dream of soaring real estate prices, and fans just wish for the convenience of a world-class park they can visit whenever they'd like. But finding the right concept for a suitable location can be elusive.
Why not duplicate a successful project from somewhere far away, then? How many Disneyland fans would like to see DisneySea built in its original proposed location in Long Beach now? How many DC Comics fans would like to see another installation of Abu Dhabi's new Warner Bros. World park somewhere in the United States?
If only it were that easy. In my Orange County Register column this week, I ask When will Disneyland build another theme park in Anaheim? In it, I quote Thinkwell Group's Dave Cobb from our "Building the World's Best Theme Parks" podcast episode this week. Here's an extended quote on why we are seeing so much theme park development shift from the United States to Asia over the past generation:
"It's not just for creative reasons. These are business ventures. In order to spend this inordinate amount of money on a development, you have to [some] certainty that you are going to get a return on it," Cobb said. "Feasibility studies look at a region and they look at the demographics. They look at the past 50 years of economic development. With financial people, they look at the next 50 years of economic development in that region. They look at, culturally, what other things are there that are similar to theme parks."
"Theme parks get built where there is a burgeoning middle class with money to spend and nothing to spend it on. That's it. That's the simple answer. So when you look at places like China and the Middle East, which have in the past 20 to 30 years a burgeoning middle class that's allowed to have their money and need to spend it, and in the cases of many places in the Middle East and China are not able to leave because it's a complicated visa process, they are incentivizing the building of these tourist destinations to develop and thrive in that specific environment.
"If you look at North America, we have a shrinking middle class and an embarrassment of riches when it comes to theme parks. The regionals take up the slack for the people who can't afford to the coasts for the big parks, and the big parks have enough capacity to handle not just North America but Japan and South America and Europe.
"I would love to say that we will see Warner Bros. open one of these in North America some time, but it's unlikely."
In case you've missed it, here is the entire 51 minute interview with Cobb, in which he talks about the creative design and development of Warner Bros. World Abu Dhabi, in addition to theme park economics:
Getting back to future parks in the U.S., though, we do have two new parks on the horizon: a new Legoland, coming to New York in 2020, and whatever Universal Orlando is doing with those hundreds of acres near the Orange County Convention Center.
A Legoland is hardly a major park, though, and — as I wrote in my Register column — what Universal is doing in Orlando has less to do taking advantage of a growing, captive market as it does trying to reach a critical mass to better attack rival Disney. Universal needs another gate to help it become a more viable primary, week-long destination for Orlando visitors, instead of settling for being an add-on to a Walt Disney World vacation, as it is now for many fans. That desire changes the standard for feasibility for Universal's rumored fourth gate (or third, if you don't count Volcano Bay).
With that shrinking middle class and crowded marketplace in the U.S., new park developments are far more likely to cannibalize existing parks' attendance and revenue than they are to grow the overall market. But Universal is trying to cannibalize other parks. It just wants them to be Disney's rather than its own — though it more likely will be SeaWorld Orlando and Busch Gardens Tampa Bay that take the biggest hits.
That's a highly unusual reason to build a new theme park. But it's pretty much the only scenario under which anyone is going to build a major new park in America's mature theme park market. So get used to what you have, U.S. theme park fans. The parks surely will continue to expand and change their attraction line-ups. New lands will open, perhaps as others close. But it's going to be very rare to see any major new parks opening near us anytime soon.
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The next big park will be the Universal Park in Orlando. After that I have a feeling it wont be until Disney builds another park in Orlando or Anaheim and that could be many years down the road.
I never understood why there isn't a major park in the pacific northwest, seems like there is an opportunity to build something between Seattle and Portland that could service that market similar to Great America services Chicago and Milwaukee.
Other than that I think the US market is totally saturated and can't see another park being built. Who is going to take the risk to finance a major park that has to compete with a park that has 40+ years of expansion on its side? It would be extremely expensive and risky to build a park to compete with a park that already has a dozen coasters and a big water park.
A big one-IP park like Warner Bros World in Abu Dhabi will never be built in the USA. IMO the only reason WB World was built was because the developers have so much money they don't know what else to spend it on and I seriously doubt the place actually makes money. Seriously who in this country is going to pay big bucks to go to a park filled with second rate dark rides of IP they don't care about?
The article makes me think that even building another Universal park is a dicey, economic proposition. Hope they keep coming to Orlando.
The article makes me think that even building another Universal park is a dicey, economic proposition. Hope they keep coming to Orlando.
Hello, I have been trying to find your new podcast through apple's podcast app without success. I have tried searching under "theme park insider" and "building the world's best theme parks" without success. What's the best keyword to search? I love your content, so please keep it up. Thanks!
The myth of the shrinking middle class. Is it really shrinking? Or are we buying into the doom and gloom that seems to pervade the media these days?
According to Pew Research, middle class Americans were 61% of the US population in 1971 when the population was approximately 208 million which works out to about 127 million people. In 2016, 52% of Americans were middle class when the population was estimated to be 323 million, so in 2016 we had 168 million middle class Americans. So, in terms of total numbers, the middle class is getting bigger.
The percentage of people in the upper class has grown also going from 14% of the population to 19% of the population from 1971 to 2016. So, we also have more people with more money now than we used to have. Unfortunately, the percentage of people in the lower class has gone from 25% of the population to 29% of the population during the same period.
The growth of the lower class is a very alarming trend, but one ray of hope in the whole situation appears to be the stabilization of the size of the middle class at around 51-52% of the population.
Without going into the causes of these changes in the economic demographics, what does all this mean for American theme parks? The easy way to figure that out is to look at Disney. Their attendance figures are going up. They're expanding and modernizing their American theme parks - and let's not kid ourselves, Universal is just a small part of the motivation to get bigger and better. Disney has the corner on the middle class market, and recently, they're making a play for the upper class market with all of the upscale offerings that they've brought out. The theme park business, especially in Orlando, is booming.
Orlando is also a special case because it is an international theme park destination and doesn't relay solely on American demographics for it's business. Yes, the world economy and the US economy are tied together, but a downturn in the US economy doesn't necessarily mean disaster for the Orlando theme parks. There's enough international currency spent in Orlando to mitigate the effects of a US recession.
So, if the US continues to grow at it's current rate, and the economic demographics remain the same, there's no reason why we shouldn't see 2-3 more major parks constructed in Orlando over the next two decades and probably a third Disney park in the Los Angeles area. As far as the rest of the country goes, there's just about zero chance of another Orlando style theme park resort complex being built. Both Disney and Universal want guests to stay on property and they want year round consistent park attendance, and that's just not possible anywhere else in the country outside of CA and FL unless you go indoors, and that's economically unfeasible.
Hard Rock Park - That's why we won't see another major theme park open in the US that's not simply an additional gate at an existing resort. The creators of HRP did all of their research, had one of the largest seasonal destination for middle class visitors, and built a park with compelling IPs and unique attractions. Myrtle Beach even has a decent local population that, while not a major metropolitan region, could sustain the park through tourist peaks and valleys unlike other beach locales that become virtual ghost towns from Labor Day to Memorial Day.
TPI has gone through the litany of reasons why HRP failed, but there still hasn't been that one specific reason or even handful of reasons that could be applied to a future new US theme park. With the case study of HRP, no financier will ever provide backing to fund the creation of a new park, even if developers have included all of the lessons learned from HRP into their business plan. All of the up front costs for research and development, demographics and site location, would still result in a rejection from a bank or investment fund based on the failure of HRP. Without the backing of an established major theme park developer using most of their own money, a new park in the US simply will never get off the ground, because you could never get anyone to front your the money to build it.
With initial costs of at least $500M-$1B, and a likely annual operations and maintenance costs in the tens of millions, it would take some serious capital just to get a theme park built with who knows how many years of operation before the venture starts turning a profit, and can start recouping the initial construction/development costs. Economically, it just doesn't make sense to try to do it, unless, again you're already in the business and are looking to steal market share from competitors (like Universal in Orlando or Disney in Anaheim).
I still believe Orlando could support a Cedar Fair or Six Flags type park, but real estate is limited in and around the city beautiful, and one may not survive if it wasn't within easy striking distance of Disney and Universal.
Classic case is Boardwalk and Baseball. It was a 1/2 decent roller coaster park, but just couldn't survive being out on 27. It always surprises me how Legoland has managed to stay up and running considering the problems the previous parks had being out there.
Certainly for the foreseeable future Universal is going to be it for new parks. It will be interesting to see how far they push the tech side of theme park entertainment. A lot has to be said for just a plain old park with a ton of good coasters though .. !!
To expand on Tim's point, it's impossible to sustain a "big" park that can't operate year-round i.e. in FL or SoCal, and it's very difficult to compete with the big 2 companies in those markets.
But why not Texas? The San Antonio-Austin market is one of the largest in the country, is growing faster than most, and is already the tourism capital of Texas. There's relatively ample land and a generally pro-development government. SeaWorld and Six Flags have parks there.
Purely speculation, but I could see a day in the future when one of those two companies is completely owned by wealthy foreigners who try to re-develop their Texas properties into international-level resorts.
Still awaiting the podcast listing on Apple. It's on Spotify, Google and Stitcher now, though.
Disney needs a new theme park somewhere in the U.S. A fifth gate in Orlando, a third gate in California(but don’t try to squeeze in into the already too crowded Disneyland resort), or one in a totally different location. A Disney Sea Resort in Texas, without a Magic Kingdom park at least initially, would give people a reason to go somewhere else for a change. Once the newness drys off, build another Disneyland next door. Disney could close half the attractions at every park and it wouldn’t reduce attendance. Same thing with building a new resort.
A new major Disney/Universal theme park resort needs two, usually mutual exclusive factors to work.
First off, you need a lot of space. Maybe not as much as the original Florida project, but as Universal has seen you need a hell of a lot, and probably more than you think.
On the other hand, you need some other attractor to help you in the early years. Although long term the business plan surely isn't to be a visit-me-too attraction, even in WDW's early years they were a me too attraction on the way to Florida's beaches - its location on that route was a key part of the initial business plan.
If I were to pick a spot in the US today, I'd pick Texas for those reasons. You have enough other attractions in Texas to get your early initial crowds, and the space to make a destintaion in its own right.
A new major Disney/Universal theme park resort needs two, usually mutual exclusive factors to work.
First off, you need a lot of space. Maybe not as much as the original Florida project, but as Universal has seen you need a hell of a lot, and probably more than you think.
On the other hand, you need some other attractor to help you in the early years. Although long term the business plan surely isn't to be a visit-me-too attraction, even in WDW's early years they were a me too attraction on the way to Florida's beaches - its location on that route was a key part of the initial business plan.
If I were to pick a spot in the US today, I'd pick Texas for those reasons. You have enough other attractions in Texas to get your early initial crowds, and the space to make a destintaion in its own right.
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A park in the northeast would be s good place for a park. Somewhere along the coast of Maine. It would need to needs a indoor park but it could and should be done. There's plenty of land and a big population near.