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I would love to know about the economics of theme parks. They require huge amounts of land, a massive upfront capital investment in the rides, and require a ton

I would love to know about the economics of theme parks. They require huge amounts of land, a massive upfront capital investment in the rides, and require a ton of logistics to coordinate the many workers required to run a place that often isn’t open year round (thinking Carowinds or six flags, not Disney). They also have to advertise continuously and serve an extremely elastic industry (people will cut theme park visits before cutting down on grocery store visits). Like when do operators decide to invest in a new ride and what’s the payback cycle like?

alexhutcheson 3y ago
The Park Database has a great 3-park blog series on the business of theme parks. This is part I, the others are linked from there: http://www.theparkdb.com/blog/the-business-of-theme-parks-part-i-how-much-money-do-they-make/ http://www.theparkdb.com/blog/the-business-of-theme-parks-pa... They have a really interesting blog overall.
- schneems 3y ago
  This is amazing. Thanks for the link! If someone else reads this comment please upvote this person.
eru 3y ago
> They also have to advertise continuously and serve an extremely elastic industry (people will cut theme park visits before cutting down on grocery store visits). Of course, elasticity goes in both directions. Demand that can be cut quickly, can also expand quickly. Toilet paper is almost the opposite. And the extremely inelastic (and thus stable) demand means that competition is sharp and everything needs to be hyperoptimized for your business to stand a chance. There's almost no slack in the system, because that would be a needless expense.
sofixa 3y ago
There's also this video from Wendover Productions on that topic: https://www.youtube.com/watch?v=oESoI6XxZTg https://www.youtube.com/watch?v=oESoI6XxZTg
B1FF_PSUVM 3y ago
> They require huge amounts of land, a massive upfront capital investment I believe I once read a quip in The Economist about golf courses being a good investment for the second owner (the first usually going bankrupt).
thr0w__4w4y 3y ago
Everything you say is correct. There is one other significant cost that isn't mentioned here: liability insurance and legal counsel. If a little kid (sorry) loses an arm, or worse (don't ask me how I know) because of a ride, there is some serious $$$ involved. I may or may not know one of the most high-powered attorneys who ever represented (past tense) amusement park companies. And no, this isn't going anywhere. I'm not going to contact anybody for an interview or write a blog. This is everyday life in the real world. So much stuff going on that no one ever thinks about...

alexhutcheson 3y ago

The Park Database has a great 3-park blog series on the business of theme parks. This is part I, the others are linked from there: http://www.theparkdb.com/blog/the-business-of-theme-parks-part-i-how-much-money-do-they-make/ http://www.theparkdb.com/blog/the-business-of-theme-parks-pa... They have a really interesting blog overall.

schneems 3y ago
This is amazing. Thanks for the link! If someone else reads this comment please upvote this person.

eru 3y ago

> They also have to advertise continuously and serve an extremely elastic industry (people will cut theme park visits before cutting down on grocery store visits). Of course, elasticity goes in both directions. Demand that can be cut quickly, can also expand quickly. Toilet paper is almost the opposite. And the extremely inelastic (and thus stable) demand means that competition is sharp and everything needs to be hyperoptimized for your business to stand a chance. There's almost no slack in the system, because that would be a needless expense.

sofixa 3y ago

There's also this video from Wendover Productions on that topic: https://www.youtube.com/watch?v=oESoI6XxZTg https://www.youtube.com/watch?v=oESoI6XxZTg

B1FF_PSUVM 3y ago

> They require huge amounts of land, a massive upfront capital investment I believe I once read a quip in The Economist about golf courses being a good investment for the second owner (the first usually going bankrupt).

thr0w__4w4y 3y ago

Everything you say is correct. There is one other significant cost that isn't mentioned here: liability insurance and legal counsel. If a little kid (sorry) loses an arm, or worse (don't ask me how I know) because of a ride, there is some serious $$$ involved. I may or may not know one of the most high-powered attorneys who ever represented (past tense) amusement park companies. And no, this isn't going anywhere. I'm not going to contact anybody for an interview or write a blog. This is everyday life in the real world. So much stuff going on that no one ever thinks about...