Trends In The Theme Park Industry For 2021
Changes in business models
Because of the COVID-19 pandemic, the goal of the theme park industry will no longer be to attract as many customers as possible and maximize the use of lands. Social distancing will affect the customer base at amusement parks from a mass-market equal access product to an exclusive, luxury pricing model. Keeping similar profit margins with reduced capacity could mean increasing prices significantly and allowing customers to access all rides without lines.
With fewer customers and more pricing, theme parks will look to add value to their experiences and make them more immersive. Disney is already running this type of high-price immersive experience model at Star Wars: Galactic Starcruiser hotel.
More dynamic pricing
Smaller regional theme parks may not be able to adapt to the luxury business model that larger ones can afford to adapt. Dynamic pricing will become the preferred method of offsetting the pandemic business losses for smaller theme parks.
Instead of daily or weekly pricing at amusement parks, pricing will be based on length of stay, day of the weak, season, and real-time reactions to weather. Advances in technology make this pricing model possible and theme parks may keep it after 2021.
Changes in interactions between employees and guests
In 2021, there will be complete re-training of employees to ensure that health and safety procedures are followed. Additionally, consumers must have confidence that the offered experience is safe. In the U.S. there are differences in belief systems that may lead to conflicts between employees and customers and among customers themselves.
Theme parks will have to look at how they can manage these differences through employee de-escalation training. Additionally, many companies will seek to revise their policies to reduce liability in case of exposure in their parks.
More touchless technology and artificial intelligence
Another impact of the pandemic will be the increased adoption of touchless technology at all levels of the employee and customer experience. For employees, this could mean more facial recognition and retinal scanning technology. For customers, this means touchless ticketing, fewer doorknobs, and touchless sinks in restrooms.
Additionally, more companies will adopt AI predictive analytics programs that will make streamline operations. Theme parks are investing in AI applications that will help set dynamic pricing and analyze target park capacity based on COVID-19 positivity rates.
More augmented and virtual reality in guest experience
In line with trends to provide a more immersive experience for guests, the usage of virtual and augmented reality technology will rise in 2021. Virtual reality creates a 3D digital environment that can interact with a person. Augmented reality transform reality into a digital space, placing virtual objects in the real world.
Without the mass crowds that previously drove the guest experience, the industry is adopting both types of technologies in rides and attractions. This also caters to the millennial and generation Z groups that are driving industry growth.
Changes in the food experience
Changes in the food experience accompany moves towards a more immersive guest experience. For example, guests at the Wizarding World of Harry Potter are offered smoked turkey legs and butterbeer. Theme parks are noticing that healthier ingredients combined with regional specialties is a good way to boost profits.
Hamburgers and hot dogs still rule the industry, but food quality is trending up and vegan and sustainable options are increasing. New designs for food preparation and eating areas are also being implemented with the co-utilization of kitchens for multiple eateries and larger dining areas.
Continued development of IoT infrastructure
Internet of Things (IoT) refers to the concept that is becoming the norm, physical devices that are connected to the Internet. Stock and point of sale monitoring will help streamline supply chain and sales decisions. This will help identify food and items that are selling in real-time and guard against shortages.
Additionally, customers will see live information about lines at rides, attractions, and restaurants. This will allow theme parks to comply with social distancing regulations and provide a more streamlined experience. There are still security concerns with enabling internet connectivity to more devices, but vulnerabilities are being studied and minimized.
More virtual assistants and video
IoT enabled smart speaker and virtual assistant solutions are expected to be adopted in 2021. This will allow guests to place pickup orders, find out ticket prices, and book rides. Commercial iterations of Google Nest Hub and Amazon Echo 8 are expected to be adopted in the theme park industry. A virtual assistant will use IoT devices such as wristbands that will allow guests to access information relevant to their locations and activity.
More use of blockchain technology in ticketing
Blockchain technology is shaping the future of ticketing, acting as secure options that are effective in preventing price gouging and fraud. Blockchain prevents tickets from being sold above their face value. Also, they prevent duplication of tickets so that tickets can only be extended to one guest. Finally, it streamlines the guest experience allowing parks to embed discounts at merchants into tickets and eliminating the need to print tickets.
Increased attention to environmental impact
Generation Z and Millennials, the largest customer bases of theme parks, are putting pressure on the theme park industry to use clean energy sources, reduce waste, and offer vegan food options. In 2019, Six Flags Discovery Kingdom became the first solar-powered park in the Western U.S., and Walt Disney World now utilizes solar farms as part of its energy sources. Additionally, parks are cutting the use of straws and adopting plant-based options.
Theme Park Industry Stats and Growth Projections in 2021
The global amusement parks market is expected to decline from $73.5 billion in 2019 to $71.6 billion in 2021
This 2.7% decline can be attributed to reduced consumer income and confidence around the world. Failure to contain the pandemic in the U.S. has also led to reduced profit expectations since it accounts for 33% of the global market this past year. However, there is hope on the horizon since an expected vaccine and revamped health and security measures are expected to lead to the global growth of 9% in 2021.
Disney World has used IoT MagicBands since 2013 to help improve operational efficiency
Disney has used wristbands equipped with IoT technology and long-range radios for nearly a decade. The bands share data with hundreds of systems and sensors that help staff anticipate customer needs and enhance the guest experience.
The bands function as credit cards, tickets, FastPasses and allow Disney to see where guests are and what they are doing. The bands allow the theme park to increase operational efficiency adding staff to busy rides and allowing the staff to re-route guests to other attractions.
After implementing dynamic pricing, Disney reported a 3% decrease in attendance and a 10% increase in per capita spending
Since 2013, Disney has introduced different forms of dynamic pricing including seasonal tiered pricing and date-based pricing. Several other regional players have followed Disney in implementing dynamic pricing. Although Disney reported decreases in attendance in the quarter following implementing dynamic pricing, it reported increases in revenue and per capita spending.
Personalization in the theme park industry can increase revenues by up to 15%
The importance of personalized guest experience is heightened especially during the current pandemic. Using virtual reality technology and providing more immersive experiences are examples of personalization in the theme park industry. Additionally, the usage of wearable technology will allow parks to provide individualized offers and services.
Mobile app revenue is expected to reach $935 billion in 2023
Theme parks are expected to continue investing in the development of mobile apps, a trend that has been building for many years. Although park apps are not new, increased investment in loyalty and engagement solutions such as waiting time at rides is expected to increase.
400 vegan and plant-based options are offered at Disney World and Disneyland
Vegan options are part of the trend to increase sustainability at theme parks. Theme parks are experimenting with combining traditional comfort foods with better ingredients to maximize customer experiences. The Impossible Burger is also a popular menu item at parks.
The World’s First Cartoon Network Hotel with 165 guest rooms opened in 2021
The Cartoon Network Hotel in Pennsylvania is the first Cartoon Network brand-specific hotel in the world. It follows the trend of immersive guest-focused experience and will include restaurants, an indoor pool, games rooms, and Cartoon Network characters. Warner Bros and Disney are both opening brand-themed hotels in 2021.
China’s first standalone virtual reality attraction, VR Star Theme Park, cost $1.5 billion to build
The theme park industry is experimenting with virtual reality offerings. While standalone parks have not taken hold int the U.S., industry leaders such as Six Flags are already using VR to enhance the guest experience on rides. This is in line with the personalized experience trend.
Walt Disney Magic Kingdom is the industry leader in attendance, drawing 21 million visitors in 2019.
While attendance is an important key indicator of the industry performance, the COVID-19 pandemic has increased the importance of guest experience and per capita spending. Parks are being forced to limit attendance in 2021, impacting the business strategy of the theme park industry. Some have offered luxury experiences for higher prices, while others are experimenting with dynamic pricing.
Evolv Express touchless systems can screen up to 3,600 people per hour
In June 2020, Six Flags contracted with Evolv Technology to provide threat detection systems that can facilitate social distancing and require no stopping. This reduces the need for security personnel and allows theme parks to screen 10 times more people than traditional metal detectors.