This past year has demonstrated strong growth in the industry of amusement parks despite a volatile year in other entertainment ventures. The major regional theme park operators, Six Flags Entertainment
The strong growth of the industry has found a revival in a number of different novel ventures and an encouraging economic climate for growth. Six Flags, for instance, which operates 16 theme parks in the U.S., has seen its shares grow by 22% during the past twelve months as the company outpaced profit expectations the past four quarters in a row. The company's revenue grew by 36% in the first quarter to $115 million and, furthermore, analysts have projected additional growth through the end of the year to increase by as much as 8% to $1.4 billion, says S&P Global Market Intelligence.
Much of the optimism comes from a fundamental shift in new ways of revamping the future of destination attractions. In order to keep attractions fresh, theme parks have traditionally resorted to funneling 15-20 million to construct brand new thrill rides and roller coasters. Contrast this with the imminent plans for Six Flags to add attractions using VR technology from Facebook's
This is not to say that investing in amusement pars is without risks. Much of the the recent good business at theme parks can be attributed to the strong economic climate. With gas prices low, it has been cheaper to drive or even fly to these attractions; and while real income is still modest, many are turning towards attending regional theme parks over exotic vacations and extended travel. Consequently it is easy to see how growth could be abruptly impacted with major changes in the economy or with a sharp increase in oil prices.
Nevertheless, the ability to refresh rides using technology, rather than investing massive amounts of capital in constructing new roller coasters, is a testament to the profit power of these businesses, says Timothy Conder, an analyst at Wells Fargo. Furthermore, theme parks can likely contribute some of their resurgence to a renewed international interest in superheroes and other positive trends in the movie industry. Superhero movies have recently dominated the box office as companies like Marvel have found continued success through the Avenger's franchise in addition to scheduled plans to roll out even more content through 2018. Additionally, DC Comics has achieved massive box office success in 2016 through it's Batman vs Superman Movie as well as Suicide Squad and has an additional docket for movie releases scheduled all the way through 2020. Much of this success is due to advancements in movie making technology that lend themselves particularly well to inspiring new attractions at amusement parks. With Walt Disney Company's purchase of Marvel Entertainment for 4.24 billion back in 2009, Disney has capitalized on much of the fanfare surrounding superhero movies by rolling out a motion-simulator ride based on Iron Man in Hong Kong Disneyland, scheduled to open late this year, a Big hero 6 ride scheduled for release in Tokyo Disneyland in 2020, and a massive Guardians of the Galaxy attraction at Disney California Adventure Park scheduled for the summer of 2017.
Combined with an encouraging economic climate, amusement parks have many reasons to look towards continued growth as technological advancements and renewed consumer interest have the potential to keep people coming back over the next few years.
