Theme Parks Lose Money Due to High Costs

In a recent report, major theme park operators Disney, Universal, and Six Flags have all experienced a decline in second-quarter earnings for 2024. Factors contributing to this downturn include rising costs for families and a shift in consumer preferences towards international travel and cruises, spurred by a strong dollar. Despite a slight revenue increase of 2% to $8.4 billion at Disney's theme parks, the company noted that domestic attendance was down, impacting overall revenue. Disney's investment strategy remains aggressive, with plans to spend approximately $60 billion over the next decade to enhance park capacity and experiences. This investment is nearly double the amount spent on the parks, experiences, and products segment in the past ten years. Upcoming attractions include a water-based "Avatar" ride and the first "Coco" attraction at Disneyland Resort in California. However, the company acknowledged that lower guest attendance and foreign currency fluctuations negatively affected international park revenues. Six Flags reported a 1% drop in total revenue and a 2% decline in guest attendance during the same quarter. The company attributed much of this decline to operational disruptions at four parks due to various macro events, including utility issues and severe weather. Despite these challenges, Six Flags remains optimistic about future attendance, citing strong early-year patterns and robust advance purchase channels. The recent merger between Six Flags and Cedar Fair has created the largest amusement park operator in North America, with a combined portfolio of 42 parks across the U.S., Canada, and Mexico. However, rising vacation costs, such as a nearly $1,000 increase for a family of four at Walt Disney World since 2019, may continue to impact visitor numbers.