by Ray Keating
Analysis
DisneyBizJournal.com
May 15, 2020
When it comes to focusing on how amusement or theme parks are dealing with the coronavirus pandemic, the big emphasis has been on The Walt Disney Company. That makes sense, given that with six resorts and 12 theme parks around the globe, Disney is the Big Kahuna in the theme parks business.
However, Disney certainly is not alone in the industry. For example, in terms of U.S.-headquartered theme park companies, other major players are Universal Parks & Resorts, Six Flags Inc., Cedar Entertainment Company, and SeaWorld Parks & Entertainment.
But there are many more theme park operators, and they actually turn out to be much smaller businesses. And without the cash and credit reserves of a Disney (such as accessing $11 billion in debt to weather the storm), these operators face more daunting challenges in this COVID-19 crisis.
Consider the percentage breakdown of firms in the amusement and theme parks industry by size (based on the number of employees), according to the latest data (2017) from the U.S. Census Bureau:
Size of Firms by
Number of Employees
|
Percent of Total Employer Firms in the
Amusement and Theme Parks Sector
|
Less than 10 employees
|
54.1%
|
Less than 20 employees
|
65.1%
|
Less than 100 employees
|
84.8%
|
Less than 500 employees
|
94.6%
|
In 2017, there were 427 amusement and theme park employer firms in the U.S., but only 23 of those had more than 500 employees, while 278 had fewer than 20 employees. Of course, it’s understood that Walt Disney World is a different animal compared to a small, local amusement park, but they effectively are in the same line of business, simply serving different sectors.
So, while we hear a lot of news about Disney and Universal, for example, during this crisis, like most of the U.S. economy, the amusement and theme parks industry is overwhelmingly populated by small and mid-size businesses. And those firms are hurting, and will be hurting, much more than Disney due to COVID-19 and the related shutdowns.
For example, it was announced on May 15 that DelGrasso’s Amusement Park in Pennsylvania will not open for the 2020 summer season due to concerns over COVID-19. And in a Coaster101 article, Bill Coan, president and CEO of Orlando-based ITEC Entertainment, a company with a global portfolio of more than 300 guest experiences spanning theme parks, cultural attractions, resorts, and retail, was quoted, “There’s probably going to be real fallout because of these closed seasons and potentially closures for a little bit longer. The real stress on these companies — again, not the big ones, they’ll find other ways to manage themselves — but the second- and third-tier (parks), this is really going to be stressful on those guys to have not only a year that is manageable but maybe even going into the future... This is going to be one of those events that probably we’re going to look back on in 10 years down the stream and say it really had an effect, and the weak players fell by the wayside and only the strong survived. There’s going to be some of that shakeout in the industry I’m sure.”
Whenever the economy takes a hit, small businesses wind up getting hurt most, and that’s no different in the theme parks industry. At the same time, however, there are always entrepreneurs out there dreaming up new and improved ways of entertaining the public – just as was the case with a guy named Walt Disney.
Ray Keating is the editor, publisher and economist for DisneyBizJournal.com, and author of The Disney Planner 2020: The TO DO List Solution (now available at a deep discount) and the Pastor Stephen Grant novels. He can be contacted at raykeating@keatingreports.com.
Get the paperback or Kindle edition of Ray Keating’s new book Behind Enemy Lines: Conservative Communiques from Left-Wing New York.
No comments:
Post a Comment