United Parks & Resorts: Theme Parks Hotels Opportunity

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In the leisure industry, the demand is generally high due to factors such as rising disposable income levels and the growth of the middle class. However, when comparing different spending categories like skiing or lodging in a chalet in Colorado, these seem to grow faster than theme parks. The attendance at theme parks has been slightly below population growth. For some theme parks, the attendance is significantly below population growth and is actually declining. However, some other theme parks, specifically in Orlando, are growing faster than the population. To start our conversation, I'm curious about your perspective on the position of theme parks in the consumer's entertainment budget. Are they gaining or losing share? How do you see the future of the industry unfolding over time?

You've asked a couple of good questions. The reason why vacations like skiing are increasing while theme park attendance is decreasing is due to the different market segments they cater to. Ski vacations, resort vacations, and beach trips have seen a lot of growth over the last few years because they attract a more affluent consumer base. These consumers haven't been as affected by the economic fallout of Covid or the recovery period.

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In the leisure industry, the demand is generally high due to factors such as rising disposable income levels and the growth of the middle class. However, when comparing different spending categories like skiing or lodging in a chalet in Colorado, these seem to grow faster than theme parks. The attendance at theme parks has been slightly below population growth. For some theme parks, the attendance is significantly below population growth and is actually declining. However, some other theme parks, specifically in Orlando, are growing faster than the population. To start our conversation, I'm curious about your perspective on the position of theme parks in the consumer's entertainment budget. Are they gaining or losing share? How do you see the future of the industry unfolding over time?

On the other hand, regional theme parks, excluding Disney and Universal, such as SeaWorld, Six Flags, Cedar Fair, and others, cater to a higher-end blue-collar demographic. This demographic has been hit harder by economic headwinds over the last few years.

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Looking at the business as a whole, could you describe the typical consumer at Cedar Fair in terms of income levels and the size of their party?

Typically, our usual guests are mothers who make the decision, aged between 25 and 42, who come with two to three children. They usually come from within a 250-mile radius of the park. For instance, if I'm at Cedar Point in Sandusky, the majority of my customers would be from the Cleveland to Detroit to Columbus triangle. If I'm in Orlando, most of my visitors would be from the Florida market. Knott's Berry Farm in LA, they would usually come from within a 100-mile radius outside of Cedar Fair, outside of Orange County.

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