Any day now, the annual report on visitor numbers for the theme park sector is expected to be published. The Themed Entertainment Association has forecasted the release of these crucial metrics in September. However, it’s important to note that the statistics we’re awaiting are for the year 2024, implying Epic Universe won’t be included in the count yet. For an extended period, the top nine parks in these rankings have been consistently dominated by the theme parks of Disney and Universal.
There exists a substantial disparity between the least frequently visited Disney and Universal parks and the most frequented ones run by rival companies. For instance, Disney’s Animal Kingdom in 2023 attracted double the visitors of Knott’s Berry Farm. Such a wide gap is anticipated to persist in the data for 2024, or even potentially increase. So the challenge is what strategies might theme park companies like the newly formed Six Flags and United Parks employ to successfully compete with the giants of the industry?
Their possible roadmap to improvement could be three-fold. Firstly, tackling the concept of stock repurchase might be beneficial. The practice of using company funds to repurchase its own stock has been appealing to many US corporations for its benefits, but it can also divert funds from vital areas. For instance, what Six Flags and United Parks desperately require at this juncture are superior products. Despite this pressing need, the board of United has green-lit further stock repurchase plans.
One can only imagine the competitive edge SeaWorld and Busch Gardens could gain over Disney if they channeled even half a billion dollars into the development of unique attractions instead of stock repurchase. A second approach that could be vital for Six Flags and United Parks involves shifting away from their current methodology of product discounting. While the sale of yearly and seasonal passes provides immediate inflow of funds, selling on the cheap builds an unsustainable model.
Discounted passes might provide immediate financial relief but necessitate subsequent price hikes inside the park for maintaining profitability. It is counterproductive as the strategy of undervaluing the passes restricts the parks’ revenue generating capability over extended periods. Building high quality parks instead of simply affordable ones is the only feasible strategy for ensuring a company’s long-term value.
How can companies that are currently lagging behind cash-rich industry leaders like Disney and Universal anticipate competing effectively? The third facet of this strategic trifecta might, rather paradoxically, involve perceptual realignment towards financial spending. Companies need to understand that procuring expensive IP licenses isn’t the only route to craft compelling narratives and experiences.
You don’t always have to spill money on licensing IP to develop captivating experiences. Hiring talented, creative writers can accomplish just that. Even a reasonable salary could hire a competent writer who could dream up engaging stories to boost the attraction of new rides, shows, or areas of your park. There is immense value to be found in affordable project managers and creative directors who can work within stringent budgets to bring these narratives to life.
It boils down to the expectations a company sets for its customers. Cultivating an atmosphere of distinctive, appealing experiences that warrant extra spending from visitors while providing continuous value is key. This perspective to business strategy has been the path opted for by Disney and Universal.
That selection is what makes these two giants leaders within the theme park industry. It underlines the fact that continual investment in the quality and uniqueness of experiences, rather than compromising on prices, results in leadership. The future course of action for Six Flags and United Parks – or any other contender in this sphere – is clear: A shift in their current strategic approach is required.
If Six Flags, United Parks, and similar organizations wish to contend with industry behemoths, the selection of their strategic path becomes paramount. Establishing a potent combination of financial prudence, a strategic rethink of pricing, and an unwavering focus on creating exceptional, valuable experiences is crucial.
Alternately, companies must be vigilant and ensure that they do not fall into the trap of focusing solely on short-term financial gains which can lead to long-term setbacks. Sound financial practices that serve to improve the quality of the park and ensure its sustainability will represent a more proactive approach to achieving competitiveness.
In conclusion, as the theme parks sector anticipates the announcement of the annual visitors’ report, industry runner-ups like Six Flags and United Parks need to redefine their strategies. Pitfalls of stock buybacks, pitfalls of underpricing, and the misconception of needing expensive IP licenses to compete are lessons they can glean from the industry’s top performers to compete effectively.
Disney and Universal’s reign, as borne out consistently by the numbers, have validated their chosen strategies. These include reinvesting in their parks, focusing more on uncompromised quality over pricing, and ensuring compelling narratives – all attributes to keep in mind for the industry at large. As we stride into the future, theme parks need to straddle the fine line between business sustainability and enhancing visitor experience, laying the foundation for an exciting, competitive landscape.
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