Transmittal

To: TRC Inc.

SUBJECT: Theme Park Report
Enclosed in this document is the Theme Park Report 2017. This report contains United
States statistics and information on a new theme park for TRC Inc. The types of data shown are
revenue, costs, attendance, growth, jobs created, demographics, and competition. With
predictions based on these statistical sources, we can conclude where constructing a new theme
park in the United States would be most beneficial to the market, and how it would leave an
impact in the surrounding area.

I am hopeful this report will provide TRC Inc. with the data needed to plan the opening of a new
theme park in the United States. Please let me know if you have any questions about the report or
need any further information. Email at (GMR@dupage.edu) or by phone (454)444-3333.

Grant Richards
Grant Richards
Manager
COD Inc.
GMR@dupage.edu
 THEME PARK REPORT
TRC, Inc. 2017 Analysis

Prepared by Grant Richards

Student at College of DuPage

Report Distributed December 3rd, 2017

Prepared for
Writing for the Workplace
ENGLI-1105-010
 Theme Park Report - 2017

ABSTRACT

This report covers the effects of constructing a new theme park in the United States for TRC Inc.
Data provided for revenue, costs, attendance, growth, jobs created, demographics, and
competition are based on theme parks in the United States. With the given information, we can
conclude the possibility of making a new theme park beneficial for both companies and the
surrounding area its built in.

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 Theme Park Report - 2017

TABLE OF CONTENTS

ABSTRACT ................................................................................................................................... i
EXECUTIVE SUMMARY ............................................................................................................1
INTRODUCTION ..........................................................................................................................2
The current state of theme parks..............................................................................2
Key external factors ........................................................................................................................2
THE STATE OF THEME PARKS.................................................................................................3
Revenue............................................................................................................................................3
Costs.................................................................................................................................................4
Attendance ......................................................................................................................................5
Expected Growth.............................................................................................................................5
Jobs created ....................................................................................................................................6
KEY EXTERNAL FACTORS .......................................................................................................6
Demographic ...................................................................................................................................6
Competition......................................................................................................................................7
CONCLUSIONS.............................................................................................................................8
WORKS CITED .............................................................................................................................9

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 Theme Park Report - 2017

EXECUTIVE SUMMARY

This report examines the possibility of constructing a new theme park for TRC Inc. through
information based on other theme parks in the United States. Information appears as; Revenue,
costs, attendance, growth, jobs created, demographics, and competition. With the predictions
based on statistics we can conclude where constructing a new theme park in the current United
States would be most beneficial.

The current state of theme parks shows the current revenue, attendance, costs, growth, and jobs
created associated with running a theme park.

Key external factors encompasses the major factors of competition and demographics and how
they affect the success of theme parks.

With all factors considered it is entirely plausible to establish a new theme park. With the
statistics listed it is shown that attendance is what makes revenue for theme parks and allows it to
grow economically. Considering that the theme park market is constantly growing steadily, a
demand for more theme parks is clear. However, with the high entry fee into the theme park
market it is suggested to make a smaller or medium sized theme park instead of a larger one to
reduce costs. With the steady growth of revenue, eventually the theme park will grow larger and
may be able to compete with the larger companies one day. This is the most efficient approach to
making a new theme park.

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 Theme Park Report - 2017

INTRODUCTION

This report examines the possibility of constructing a new theme park for TRC Inc. through
information based on other theme parks in the United States. Information appears as; Revenue,
costs, attendance, growth, jobs created, demographics, and competition. With the predictions
based on statistics we can conclude where constructing a new theme park in the current United
States would be most beneficial.

The state of theme parks

The state of theme parks today is important to consider when proposing a new theme park. The
current day theme park market is broken into multiple categories of study to help gather
statistics:
Revenue The annual amount of money a theme park makes
Costs The price for establishing and maintaining a theme park
Attendance The amount of people who visit the theme park annually
Jobs created The jobs created in the surrounding area
Growth The increase in market shares in the theme park industry

Key external factors

There are also two other factors to consider when making a new theme park. A company must be
aware of what is trending so that the theme park is successful. The following are external factors
to consider:
Competition the other market shares of other theme parks in the industry
Demographic The specific age group, groups, types of people that currently go to theme
parks

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 Theme Park Report - 2017

CURRENT STATE OF THEME PARKS

Estimated Businesses Average Attendance Revenue

400+ 375mil $20.49bil
Average Cost to Build Annual Growth (2011-2016) Average jobs created
$100billion+ $55.4bil 2.3mil
In only 5 years the annual growth has reached 55.4 billion dollars. According to the IAAPA
(International Association of Amusement Parks and Attractions) it is projected that by 2020 the
annual growth will reach $58 billion with a 7.5 percent increase from 2015 as shown at the
bottom of figure 1.

Figure 1 (IAAPA, 2017)

Revenue
Creating a source of revenue is
the most important part of
making a theme park. There are
3 key parts to a theme parks
revenue:
Entertainment
Food and Drinks
Merchandise

Figure 2 (Sayer, 2017)

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 Theme Park Report - 2017

Admissions are the number one revenue makers for theme parks. Admissions vary from Adult,
teenager, and child and special admissions like VIP access, discounts from purchases, and even
birthday specials. (Cornell, 2013)

Rides are the second-best revenue makers as they are the most visited attractions at theme parks.
To get an idea of how often they are visited, according to an engineering guide on maintenance
to theme park rides, they are replaced at least once a year. (Coaster 101, 2011)

Coin operated games or arcade games are the third major provider of revenue. An article by
Party Center Software tells of an average per game revenue adding up to $200 per week. With a
mix of up to date games and prizes, that revenue increases. (Party Center Software, 2014)

Sales of Food and beverages make up 13.8% of revenue in theme parks so multiple food courts
should be placed throughout the theme park.

Merchandise is the final main factor that affects revenue at 11.0% and will most likely fluctuate
as time goes by. Lego Land increased their merchandise revenue with a new Star Wars themed
ride. (Los Angeles Times, 2013) Building the ride motivated sales on Star Wars themed
merchandise and toys. According to this, the proper way to increase merchandise sales would be
to build rides that share a theme with the merchandise.

Costs
The total cost of a theme park varies in the billions range and accounts for 80% of the revenue
generated annually. This leaves a large profit margin for investments in future expansions and
savings when attendance seasonally go down. As seen in figure 3 the major theme park industry
costs are:
Profit
Wages
Purchases
Marketing
Depreciation
Rent &
Utilities
Other
(insurance,
maintenance,
legal fees, etc.)

Figure 3 (Sayer, 2017)

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 Theme Park Report - 2017

Because of the labor-intensive environment wages would be the leading cost to consider when
planning a theme parks budget. (Sayer, 2017) Purchases, Depreciation, Marketing, Rent &
Utilities, and other would represent 57.6% of revenue spent. Rides and attractions would need
frequent upkeep and updated to attract and keep customers. A lack in investment in rides would
cause a loss of interest in the park.

Safety in the park is a very important priority, so it is key to maintain each ride and replace each
ride when necessary, meaning depreciation is in a large annual expense. Rent and utilities will
make up a huge cost since there will be a large use of space and electricity. Other costs would
mostly be insurance, which is a must have in the possible event of anything unfortunately going
wrong.

Attendance

Attendance makes or breaks a theme park

and predicts how its future will look. Figure
4 shows an example of how attendance
steadily increases by 10s of millions as time
goes by. If attendance is maintained there
will be economic growth in the park and the
surrounding community.

Figure 4 (IAAPA, 2007) Example of steady increase in attendance

Figure 5 (Statista, 2017)

Expected Growth
When attendance grows so does revenue. In
both Figure 5 and Figure 4 revenue grows
steadily as attendance does. This means the
best option is to draw in as many people with
top of the line services as possible. As
attendance improves, so does revenue, and so
will the park and the options it has to bring in
even more attendance.

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 Theme Park Report - 2017

Jobs Created
As the theme park industry grows, so do the jobs it generates. As shown here in figure 6, the
most populated states generate the most jobs. The highest number of jobs created measure
between 6,690 and 44,960, However, most work generated from jobs in theme parks are
seasonal, so this number will
fluctuate. (Walsh, 2017) It
would be ideal to build in one
of the following Regions:
CA
TX
CO
MN
MO
IL
MI
OH
PA
NY
NC
FL
Figure 6 (Bureau of Labor Statistics, 2016)

KEY EXTERNAL FACTORS

Demographic
There are two major factors of demographics:
Age
Domestic vs
International

Figure 7 (Sayer, 2017)

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 Theme Park Report - 2017

Figure 7 shows how domestic visitors make up 91.9% of demographics, visitors younger than 18
being the largest factor at 26.2% and in second place are visitors 18 to 44 at 24.0%. This means
the market leans towards visitors under the age of 18 to 44. Aged 18 and under should be the
main target for the demographic.

Competition

Figure 8 (Theme Index, 2016)

The competition in the theme park market is colossal and is ran mostly by Disney. As seen in
figure 8, Disney Lands Magic Kingdom takes first place with a towering attendance of
20,395,000 in 2016. A way Disney promotes their Magic Kingdom is through showing it at the
beginning of movies Disney helped make or made. Figure 8 also shows that the average
attendance has decreased since 2015 by 1.1%. In the US the top 3 leading companies are in order
of Disney, Universal Studios, and SeaWorld. Japan Holds the most leading theme parks also
shown in figure 8.
Even though entry costs will be high to enter the market due to preparation and set up, it will cost
much less if the project is kept in a specialized regional market share and in an area that can
generate a sustainable amount of attendance such as the ones listed in figure 6. It is also
recommended to make a small or medium sized theme park instead of a large one to reduce
costs, so that the steady revenue will slowly let the theme park grow larger.

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 Theme Park Report - 2017

CONCLUSIONS
With all factors considered it is entirely plausible to establish a new theme park. With the
statistics listed it is shown that attendance is what makes revenue for theme parks and allows it to
grow economically. Considering that the theme park market is constantly growing steadily, a
demand for more theme parks is clear. However, with the high entry fee into the theme park
market it is suggested to make a smaller or medium sized theme park instead of a larger one to
reduce costs. With the steady growth of revenue, eventually the theme park will grow larger and
may be able to compete with the larger companies one day. This is the most efficient approach to
making a new theme park.

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 Theme Park Report - 2017

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http://www.teaconnect.org/images/files/TEA_235_103719_170601.pdf
Coasters-101: Daily Inspections. (2015, June 18). Retrieved December 03, 2017, from
https://www.coaster101.com/2011/01/31/coasters-101-daily-inspections/
S. (n.d.). Retrieved December 03, 2017, from
http://blogs.cornell.edu/armapp/2013/03/27/revenue-management-in-theme-park-industry/
IAAPA - The International Association of Amusement Parks and Attractions. (n.d.). Retrieved
December 03, 2017, from http://www.iaapa.org/
I. (2016). 2015-2020 Global amusement park outlook. Retrieved December 3, 2017, from
http://www.ttra.com/assets/1/7/IAAPA_Amusement_Park_Outlook_2015-2020.pdf
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* All products require an annual contract. Prices do not include sales tax (New York
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December 03, 2017, from https://www.statista.com/statistics/360394/theme-park-visitors-usa/
Gruening, D. (n.d.). Average Arcade Revenue and Budget. Retrieved December 03, 2017, from
https://www.partycentersoftware.com/blog/2014/10/16/average-arcade-revenue-budget
(n.d.). Retrieved December 03, 2017, from http://www.iaapa.org/resources/by-park-
type/amusement-parks-and-attractions/industry-statistics
Walsh, B. (2017, April 16). Theme park formal report example. Retrieved December 3, 2017,
from https://bb.cod.edu/bbcswebdav/pid-4851575-dt-content-rid-
22392222_2/courses/194394/Example_Theme%20Park%202017_Formal%20Report.pdf
Industry and Market Research to help you makefaster, better business decisions. (n.d.). Retrieved
December 03, 2017, from https://www.ibisworld.com/
* All products require an annual contract. Prices do not include sales tax (New York
residents only). (n.d.). Forecast: amusement and theme parks revenue United States 2020 |
Statistic. Retrieved December 03, 2017, from https://www.statista.com/forecasts/409835/united-
states-amusement-and-theme-parks-revenue-forecast-naics-71311