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Sunday, May 31, 2020

Will COVID-19 Mandates Take All the Fun (and Business Viability) Out of Amusement Parks?

Amusement parks trying to reopen and rescue their business face immense obstacles, almost all caused by government mandates.

Photo by Kon Karampelas on Unsplash

With summer coming, theme and amusement parks trying to reopen and rescue their business face immense obstacles, almost all caused by government mandates. These mandates may result in theme parks not opening, closing shortly after opening, or offering a poor customer experience.

Theme Park Economics 

Here is the basic theme park economic model.

First, money comes in from theme park admissions (up to $100 a day plus) and parking (up to $25 a day plus). That’s a nice chunk of change.

Second, for destination parks, you have bundled deals that also include hotel stays, dining, etc. With bundling, a business can get the customer to spend more money than if it sold these items à la carte. Very important.

Third, by allowing customers to come in and keeping them entertained for 12 hours or so, theme parks have a captive audience. During these 12-or-so-hours, the customer will purchase expensive food, drink, merchandise ($25 helium filled balloons, $200+ lightsabers), upcharges (Tired of waiting in line? Buy a line pass for just $100 per person and go to the front of the line once) and upcharges to the upcharges (Want to go to the front of the line more than once? For an additional $100 per person you can), and special events. These are the sweet spots.

To create the magic and operate profitably, a park needs lots and lots of customers to visit annually. The world’s most visited theme park is Disney World’s Magic Kingdom in Florida with approximately 21 million people annually or approximately 57,000 people per day. Other theme parks and amusement parks can function profitability with much lower levels of attendance. To handle these numbers, theme parks have become experts in people management, and all of the facilities and attractions are designed with high load capacities in mind and thrive with large crowds.

New Park Restrictions

One of the first restrictions or conditions imposed on theme parks reopening is forcing them to operate at 50 percent capacity or less. Here are some policies being proposed and implemented to reduce park capacity:

  • Requiring reservations
  • Requiring all tickets and parking to be purchased online
  • Limits on the available number of tickets each day
  • Requiring tickets to be day- and time-specific
  • Annual pass holders required to make reservations too
  • Some customers having to wait in their cars until notified and given permission to enter

On top of all this, parks may not be able honor the reservation time because of delays. You may not be able to switch parks during the day to avoid complicating the capacity issues.

Customers may have to first queue up to get a health screening of varying degrees—maybe a just quick temperature check, maybe more. Then, it’s on to the security queue and finally to the front gate queue. Three lines of various lengths just to gain access to the real and fun lines in the park.

Or maybe not. Ever hear of a “virtual queue?” You will now. Stripped of its theme park speak, a virtual queue means our lines are so long, you have to make a reservation just for the privilege to stand in an actual real line. For example, at 10:00 a.m. you may get a 2:00 p.m. appointment for an attraction, then you get the privilege of standing in a real line for two hours in order to experience the attraction.

Remember all those theme park refrains: “Fill in all available space. Keep up with the party in front of you. If the party in front of you is not moving, walk past them.” Not anymore, you won’t. The big destroyer of theme park operations will be “social distancing.” When a ride vehicle comes into the loading platform, the employees may have to disinfect it, then load it with each rider separated by one or more rows. The result is that the ride that had a capacity of a 1000 people per hour is now down to 50 to 100 persons per hour. The normal two-hour wait is now multiplied.

How about the restrooms? Restrooms in theme parks and other large venues are designed for a large number of customers. Not anymore. Stalls, urinals, and sinks will be closed off to maintain six feet of separation. Plus, maybe even restroom monitors to make sure no one cheats.

“Virtual queues” will be implemented for everything: rides, shows, restrooms(?), restaurants. Wait times for everything will be posted to prevent real lines from forming. The parks have to keep the real lines from backing up and interfering and disrupting the flow of people around the park who are trying to maintain six feet of separation as they navigate around the park.

Special events and indoor shows may be cancelled. If you have ever attended the evening fireworks at the Magic Kingdom, the crowds in front of Cinderella Castle are packed tight. I want to see an employee make sure there is six feet of separation between every person. Good luck with this! Even if they did temporarily get the six feet, immediately at least six people would move in and occupy the space. This would be difficult to do, so expect firework shows to be cancelled.

Customer Pressure

One of the more popular annual holidays at theme and amusement parks is Halloween. A number of parks have haunted houses. The lines are long (both in time and distance) with non-stop conga lines of people standing close to each other. Now imagine the same two-hour lines with six feet of distance between each person. (I am not sure if any park will have the space to snake all the lines.) With haunted houses, it is dark, people get spooked, so they usually end up bumping, tripping or falling on one another. So much for social distancing. The parks may have to cancel these events or substantially modify and restrict them. There goes the fun.

As soon as you leave your car, you will have to put on a facemask. Parading around the park with a mask won’t be much fun in the hot summer sun and humidity. Customers will have to wear their facemasks except when eating in a restaurant. Of course, what will be the facemask rule if you pick up a soft drink, bucket of popcorn or ice cream to eat while walking around the park? Mask or no mask? Better not guess wrong, or the facemask Gestapo will be on you! Also, I don’t believe face masks would work too well in a waterpark, unless of course a near-drowning and waterboarding experience is your idea of fun. May have to close the waterparks for the summer.

While people may tolerate health checks, facemask wearing and additional line waiting for essential activities such as work or a business trip, many will not tolerate them for leisure activities. Capacity constraints, social distancing, facemask requirements, the lingering effects of a fear of mass social gatherings, will all combine to create a poor theme park experience. Throw in consumers who have been financially and economically devastated by government shutdowns, and it is doubtful that attendance levels will be sufficient for theme and amusement parks to return to profitability for some time.

Remember, it was ultimately the customers who shut down the theme/amusement parks, and it will be the customers who decide when, and if they reopen, and the terms and conditions they operate: not governments or theme park operators.

Sources:

General Background Issues

Parks Not Opening

Ride Reservations

General Issues

Facemask, Temperature Screening Rules, Health Screening

Special Events being Postponed

Seasonal 2020 Passes being Extended to 2021


  • Lawrence Clark, PhD is a university professor of economics and statistics at Warner University in Central Florida with an expertise in theme parks and tourism. He is also a forensic economist at Clark Economics.