Abstract
Although it hit some operators harder than others, the UK theme parks market is reeling from a poor year in 2007, largely as a result of the same unpredictable weather that gifted them a fine year in 2006.
Since Mintel last examined this market in March 2006, the gap between the two tiers of operator - basically the ' big six' parks and the rest - has widened and the smaller parks are going to find it increasingly difficult to compete in the future. However, there is still plenty of scope for parks to make people' s visits more enjoyable, particularly when it comes to the provision of food and drink and policy relating to queues.
This report examines the market for theme parks in the UK in terms of volume, value and how spending is segmented, as well as consumer behaviour and attitudes towards parks. It considers the hypothesis that: "the way forward for theme parks in the UK is to find new ways of attracting new types of visitors through more imaginative marketing or more flexible ticketing strategies."
Defining a theme park is not easy; arguably, any visitor attraction that chooses to call itself a ' theme park' should be included, but for practical purposes it is necessary to be more specific:
- The term ' park' implies that the attraction is on a large, mainly outdoor scale, and not just a small-scale attraction, themed or not.
- Admission must be charged.
- There must be some attempt at theming, whether based on entertainment (eg Disney, Universal, Asterix), history (some of Alton Towers), the Wild West etc.
- Fairground rides must be offered.
The rides are crucial, as ' theme park' is an abbreviation for ' themed amusement park' . Traditionally, rides and amusements were provided at seaside resorts, alongside other distractions and catering, but the modern concept of a theme park usually refers to an inland park which is a destination in its own right, which charges an all-inclusive admission and offers:
- a choice of rides, usually with a ' pass' option (eg a wristband)
- landscaping and themed visual or audio-visual attractions
- catering and merchandise.
Table of Contents
Issues in the Market
- Main issues
- Definition
- Abbreviations
Market in Brief
- A period of fluctuating fortunes
- Utility companies and legislators add to woes
- Merlin makes its mark
- Two thirds have been to a UK theme park
- Priorities for parks: improve food and queues
- Family and friends
- Further rationalisation on the way?
Internal Market Environment
- Key points:
- A growing burden of red tape
- Minimum wage increases cause problems with differentials
- Gambling Act revisions impact on certain types of park
- Greater onus on fire safety
- Growth in CRB checking brings additional costs
- Insurance costs on the up
- Rising energy costs add to overheads
- Figure 1: Trends in the price of electricity for the non-domestic sector, 2002-07
- Marketing effectiveness
- Figure 2: Theme parks ever visited, by region, October 2007
Broader Market Environment
- Key points:
- Credit crunch to see consumer spending slow down?
- Figure 3: Trends in personal disposable income and consumer expenditure, 2002-12
- Few opportunities to target an ageing population…
- Figure 4: Trends in the age structure of the UK population, 2002-12
- …while lifestage trends look equally bleak
- Figure 5: Trends in UK adult population, by lifestage, 2002-12
- More ABs to help boost attendance and spending?
- Figure 6: Forecast adult population trends, by socio-economic group, 2002-12
- Households getting smaller
- Figure 7: Trends in UK household composition, 2002-12
- The weather remains unpredictable
- Figure 8: UK weather trends, 2002-07
Competitive Context
- Key points:
- Competition for the leisure pound
- Figure 9: Consumer expenditure on selected leisure activities, 2002-07
- Theme parks unique in being so reliant on weather
- Growing affluence leads to higher expectations
- Families have least weekend leisure time - time for a rethink on tickets?
- Theme parks vs other days out
- Figure 10: Places/attractions visited in the last 12 months, 2007
- Theme parks trumped by more cultural attractions
- Shopping and free venues/attractions provide competition
- Plenty of options for financially challenged
- Getting real works its magic?
Strengths and Weaknesses in the Market
- Strengths
- High barriers to market entry
- Opportunities to develop secondary spend
- Relatively little competition
- New rides and attractions can generate repeat business
- Clearly communicated, unique proposition
- Weaknesses
- Vulnerable to poor weather/climate change
- Growing affluence may mean fewer domestic holidays
- Constant requirement for bigger, better rides
- Difficulties in expanding
Market Size and Forecast
- Key points:
- Weathering the storm?
- Figure 11: UK theme parks market, by volume and value, 2002-12
- Past market performance
- Present market performance
- Future market performance
- Requirements for success
- Factors used in the forecast
Segment Performance
- Key points:
- Admission and merchandise revenues up, as catering stalls
- Figure 12: UK theme parks market, by value, by segment, 2002-07
- Overhead pressures force operators to pass on the costs
- Figure 13: UK theme park admissions revenue trends, 2002-07
- Catering suffers from poor weather
- Figure 14: UK theme park catering revenue trends, 2002-07
- Healthy eating: dead-end or dead good?
- Visitors like a small memento
- Figure 15: UK theme park merchandise revenue trends, 2002-07
- Accommodation dominates other revenue
- Figure 16: UK theme park other revenue trends, 2002-07
- Ride photography still area of growth
- Gaming machines flat
Market Share
- Key points:
- Merlin achieves top sales…
- Figure 17: Leading UK theme park operators ranked by turnover (latest year)
- …and profits
- Figure 18: Leading theme park companies ranked by operating profit (latest year)
Companies and Products
- Key points:
- Major players
- Merlin Entertainments Group Ltd
- Tussauds Theme Parks
- Figure 19: Recent financial performance of Tussauds Theme Parks Ltd, 2003-06
- Tussauds Hotels
- Figure 20: Recent financial performance of Tussauds Hotels Ltd, 2003-06
- Legoland Windsor
- Figure 21: Recent financial performance of Legoland Windsor Park Ltd, 2003-06
- Flamingo Land Ltd
- Figure 22: Recent financial performance of Flamingo Land Ltd, 2003-06
- Drayton Manor Park Ltd
- Figure 23: Recent financial performance of Drayton Manor Park Ltd, 2004-07
- Paultons Park Ltd
- Gulliver' s
- Gulliver' s World
- Figure 24: Recent financial performance of Gulliver' s World Ltd, 2003-06
- Figure 25: Gulliver' s World Ltd turnover, by segment, 2005 and 2006
- Gulliver' s Land
- Figure 26: Recent financial performance of Gulliver' s Land Ltd, 2003-06
- Figure 27: Gulliver' s Land Ltd turnover, by segment, 2005 and 2006
- Gulliver' s Kingdom
- Oakwood Leisure Ltd
- Figure 28: Recent financial performance of Oakwood Leisure Ltd, 2003-06
- Lightwater Valley Attractions Ltd
- Figure 29: Recent financial performance of Lightwater Valley Attractions Ltd, 2004-07
- Figure 30: Lightwater Valley Attractions Ltd turnover, by segment, 2004-07
- Prime Resorts Ltd
- Figure 31: Recent financial performance of Prime Resorts Ltd, 2004-07
- Pleasurewood Hills Ltd
- Figure 32: Recent financial performance of Pleasurewood Hills Ltd, 2005 and 2006
- Other operators
Brand Communication and Promotion
- Key points:
- Advertising spend by park
- Figure 33: UK theme parks expenditure on main media advertising, by theme park, 2007*
- Merlin parks' spend towers over rivals
- Smaller parks caught in ' Catch 22' situation
- TV and radio tops for targeting individuals…
- …while direct approach is favoured for groups
- Websites playing important role
Who Visits Theme Parks?
- Key points:
- Theme parks visited
- Figure 34: Theme parks visited in the UK, 2002-07
- Merlin works its magic…
- …while other parks struggle
- Who has visited a theme park?
- Figure 35: Theme park visiting in the UK, by demographic sub-group, October 2007
- Broad appeal of parks presents challenges for operators
- The Internet - an essential tool for keeping in touch with visitors
- ' Softer' park or attractions could appeal to older people
- Small number of foreign theme park visitors could be converted?
- Who has been where?
- Figure 36: Most popular theme parks visited in the UK, by demographic sub-group, 2007
- Figure 37: Next most popular theme parks visited in the UK, by demographic sub-group, 2007
- Young adults go for parks with excitement…
- …while families go for fun and education
- Legoland hits the AB jackpot
- Theme park visiting combinations
- Figure 38: Theme parks visited in the UK, by most popular other theme parks visited, October 2007
- Figure 39: Theme parks visited in the UK, by next most popular other theme parks visited, October 2007
- Merlin' s virtuous circle
- Northern parks compete with each other but also Alton Towers
Increasing the Attraction
- Key points:
- What would make visits more enjoyable?
- Figure 40: Factors that would make theme park visits more enjoyable, October 2007
- Room for improvement
- Catering hits a raw nerve
- Queues: a fact of life but can anything be done?
- Pay-as-you-go alternative finds favour
- What would make visits more enjoyable? - demographic analysis
- Figure 41: Most popular factors that would make theme park visits more enjoyable, by demographic sub-group, October 2007
- Figure 42: Next most popular factors that would make theme park visits more enjoyable, by demographic sub-group, October 2007
- Food and drink value high up the menu for families and lower-income consumers
- Pay more to jump the queues?
- Pay-as-you-go could help families
- Better quality toilet facilities particularly important to women
- What would make visits more enjoyable? - visitors and non-visitors
- Figure 43: Factors that would make theme park visits more enjoyable, by UK theme park visiting, October 2007
- Theme park visitors want more reasonable catering prices
- What would make visits more enjoyable? - by individual theme park
- Figure 44: Factors that would make theme park visits more enjoyable, by most popular theme parks visited in the UK, October 2007
- Figure 45: Factors that would make theme park visits more enjoyable, by next most popular theme parks visited in the UK, October 2007
- Merlin needs to wave its magic wand over catering?
- Northern parks rated poorly
- Southern park visitors attracted by queue jumping
- Pay-as-you-go tonic for Legoland?
- Combinations of incentives
- Figure 46: Most popular combinations of factors that would make theme park visits more enjoyable, October 2007
- Figure 47: Next most popular combinations of factors that would make theme park visits more enjoyable, October 2007
- Catering value part of overall visitor experience
