By Mark Seavy  

With consumers caught between inflation and growing interest rates, theme parks are starting to report a decline in attendance. In addition to issues of cost increases, the parks are also contending with new competition from various location-based entertainment (LBE) formats.   

Although major theme parks have long co-existed with smaller, regional facilities, the sheer number of new LBE offerings could pose a challenge. This is especially true because certain formats—like pop-up shops or live shows—cost less while still providing the experience consumers are seeking, licensing industry executives said. 

To date, the growth of LBE overall has only seemed to increase consumers’ appetite for theme parks. But as discretionary spending declines, major theme parks are working to maintain crowds.  

Disney, for example, plans to invest $60 billion in its parks and experiences division over the next 10 years, targeting unexploited IPs.  

And Cedar Fair Entertainment, which is merging with Six Flags Entertainment, opened a renovated Camp Snoopy at its Knott’s Berry Farm in California, added a Camp Snoopy to Kings Island in Ohio, and plans to launch two new rides (Snoopy’s Racing Railway and Charlie Brown’s River Raft Blast) at Carowinds in North Carolina. The company’s focus on rides and experiences inspired by beloved brands comes more than a decade after it ended several licensing agreements (including Tomb Raider, Star Trek, Nickelodeon) after acquiring Paramount Parks from CBS Corp. in 2006.  

And while Six Flags has a licensing agreement with Warner Bros. Discovery that was part of its 1984 acquisition of Great America park in Gurnee, IL from Mariott, it has not been determined whether that will continue as part of the merged company.  

Additionally, Universal’s Epic Universe will open in 2025 featuring 50 attractions, including the Wizarding World of Harry Potter and Super Nintendo World. 

“There was revenge spending coming out of the pandemic and then we hit a plateau, and inflation began to have an impact on consumers. And though it is back to manageable levels, the prices haven’t come down,” said George Wade, Co-Founder and President of the consulting firm Bay Laurel Advisors. “There are only so many discretionary dollars to go around and the more opportunities there are for consumers to spend for experiential, it creates a new level of competition for theme parks.” 

For the time being, smaller LBE formats are a lesser concern for theme park operators than the economic issues facing consumers as admission prices continue to rise. Disney, for example, charges $104-$116 for a single-day ticket, while Cedar Point charges $95-$120 and Universal charges $105-$310. 

According to a survey of Disney “superfans,” travel agents, and Orlando-area business owners compiled by investment firm Raymond James, “it is not news that a Disney trip is expensive, but the magnitude and speed of price increases over roughly the past five years was jarring to many respondents, and we do not believe similar increases over roughly the next five years are feasible.”  

While Disney witnessed a “slight moderation” in demand for its parks in Q2, Disney CFO Hugh Johnston said it wasn’t a “significant change” but rather a “protracted” one that is unlikely to last more than a “couple of quarters.” 

Money- and time-pressed consumers, however, may increasingly opt for a shorter LBE experience at a lower price, according to industry executives. 

“Does LBE outside the park have some impact on the theme parks? Yes,” said Wade, noting the American Dream mall in East Rutherford, NJ could potentially cut into the business of Six Flags Great Adventure in Jackson Township, NJ. “And are people deciding to do two-hour experiences instead of a day-long one in a theme park? I am sure that comes into play.”