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Although it hit some operators harder than others, the UK theme parks market is reeling from a poor year in 2007, largely as a result of the same unpredictable weather that gifted them a fine year in 2006.

Since Mintel last examined this market in March 2006, the gap between the two tiers of operator - basically the ‘big six’ parks and the rest - has widened and the smaller parks are going to find it increasingly difficult to compete in the future. However, there is still plenty of scope for parks to make people’s visits more enjoyable, particularly when it comes to the provision of food and drink and policy relating to queues.

This report examines the market for theme parks in the UK in terms of volume, value and how spending is segmented, as well as consumer behaviour and attitudes towards parks. It considers the hypothesis that: “the way forward for theme parks in the UK is to find new ways of attracting new types of visitors through more imaginative marketing or more flexible ticketing strategies.”

Defining a theme park is not easy; arguably, any visitor attraction that chooses to call itself a ‘theme park’ should be included, but for practical purposes it is necessary to be more specific:

• The term ‘park’ implies that the attraction is on a large, mainly outdoor scale, and not just a small-scale attraction, themed or not.
  
  
• Admission must be charged.
  
  
• There must be some attempt at theming, whether based on entertainment (eg Disney, Universal, Asterix), history (some of Alton Towers), the Wild West etc.
  
  
• Fairground rides must be offered.

The rides are crucial, as ‘theme park’ is an abbreviation for ‘themed amusement park’. Traditionally, rides and amusements were provided at seaside resorts, alongside other distractions and catering, but the modern concept of a theme park usually refers to an inland park which is a destination in its own right, which charges an all-inclusive admission and offers:

• a choice of rides, usually with a ‘pass’ option (eg a wristband)
  
  
• landscaping and themed visual or audio-visual attractions
  
  
• catering and merchandise.

 
 

Issues in the Market

Main issues

Definition

Abbreviations

Market in Brief

A period of fluctuating fortunes

Utility companies and legislators add to woes

Merlin makes its mark

Two thirds have been to a UK theme park

Priorities for parks: improve food and queues

Family and friends

Further rationalisation on the way

Internal Market Environment

Key points:

A growing burden of red tape

Minimum wage increases cause problems with differentials

Gambling Act revisions impact on certain types of park

Greater onus on fire safety

Growth in CRB checking brings additional costs

Insurance costs on the up

Rising energy costs add to overheads

Figure 1: Trends in the price of electricity for the non-domestic sector, 2002-07

Marketing effectiveness

Figure 2: Theme parks ever visited, by region, October 2007

Broader Market Environment

Key points:

Credit crunch to see consumer spending slow down

Figure 3: Trends in personal disposable income and consumer expenditure, 2002-12

Few opportunities to target an ageing population…

Figure 4: Trends in the age structure of the UK population, 2002-12

…while lifestage trends look equally bleak

Figure 5: Trends in UK adult population, by lifestage, 2002-12

More ABs to help boost attendance and spending

Figure 6: Forecast adult population trends, by socio-economic group, 2002-12

Households getting smaller

Figure 7: Trends in UK household composition, 2002-12

The weather remains unpredictable

Figure 8: UK weather trends, 2002-07

Competitive Context

Key points:

Competition for the leisure pound

Figure 9: Consumer expenditure on selected leisure activities, 2002-07

Theme parks unique in being so reliant on weather

Growing affluence leads to higher expectations

Families have least weekend leisure time - time for a rethink on tickets

Theme parks vs other days out

Figure 10: Places/attractions visited in the last 12 months, 2007

Theme parks trumped by more cultural attractions

Shopping and free venues/attractions provide competition

Plenty of options for financially challenged

Getting real works its magic

Strengths and Weaknesses in the Market

Strengths

High barriers to market entry

Opportunities to develop secondary spend

Relatively little competition

New rides and attractions can generate repeat business

Clearly communicated, unique proposition

Weaknesses

Vulnerable to poor weather/climate change

Growing affluence may mean fewer domestic holidays

Constant requirement for bigger, better rides

Difficulties in expanding

Market Size and Forecast

Key points:

Weathering the storm

Figure 11: UK theme parks market, by volume and value, 2002-12

Past market performance

Present market performance

Future market performance

Requirements for success

Factors used in the forecast

Segment Performance

Key points:

Admission and merchandise revenues up, as catering stalls

Figure 12: UK theme parks market, by value, by segment, 2002-07

Overhead pressures force operators to pass on the costs

Figure 13: UK theme park admissions revenue trends, 2002-07

Catering suffers from poor weather

Figure 14: UK theme park catering revenue trends, 2002-07

Healthy eating: dead-end or dead good

Visitors like a small memento

Figure 15: UK theme park merchandise revenue trends, 2002-07

Accommodation dominates other revenue

Figure 16: UK theme park other revenue trends, 2002-07

Ride photography still area of growth

Gaming machines flat

Market Share

Key points:

Merlin achieves top sales…

Figure 17: Leading UK theme park operators ranked by turnover (latest year)

…and profits

Figure 18: Leading theme park companies ranked by operating profit (latest year)

Companies and Products

Key points:

Major players

Merlin Entertainments Group Ltd

Tussauds Theme Parks

Figure 19: Recent financial performance of Tussauds Theme Parks Ltd, 2003-06

Tussauds Hotels

Figure 20: Recent financial performance of Tussauds Hotels Ltd, 2003-06

Legoland Windsor

Figure 21: Recent financial performance of Legoland Windsor Park Ltd, 2003-06

Flamingo Land Ltd

Figure 22: Recent financial performance of Flamingo Land Ltd, 2003-06

Drayton Manor Park Ltd

Figure 23: Recent financial performance of Drayton Manor Park Ltd, 2004-07

Paultons Park Ltd

Gulliver’s

Gulliver’s World

Figure 24: Recent financial performance of Gulliver’s World Ltd, 2003-06

Figure 25: Gulliver’s World Ltd turnover, by segment, 2005 and 2006

Gulliver’s Land

Figure 26: Recent financial performance of Gulliver’s Land Ltd, 2003-06

Figure 27: Gulliver’s Land Ltd turnover, by segment, 2005 and 2006

Gulliver’s Kingdom

Oakwood Leisure Ltd

Figure 28: Recent financial performance of Oakwood Leisure Ltd, 2003-06

Lightwater Valley Attractions Ltd

Figure 29: Recent financial performance of Lightwater Valley Attractions Ltd, 2004-07

Figure 30: Lightwater Valley Attractions Ltd turnover, by segment, 2004-07

Prime Resorts Ltd

Figure 31: Recent financial performance of Prime Resorts Ltd, 2004-07

Pleasurewood Hills Ltd

Figure 32: Recent financial performance of Pleasurewood Hills Ltd, 2005 and 2006

Other operators

Brand Communication and Promotion

Key points:

Advertising spend by park

Figure 33: UK theme parks expenditure on main media advertising, by theme park, 2007*

Merlin parks’ spend towers over rivals

Smaller parks caught in ‘Catch 22’ situation

TV and radio tops for targeting individuals…

…while direct approach is favoured for groups

Websites playing important role

Who Visits Theme Parks

Key points:

Theme parks visited

Figure 34: Theme parks visited in the UK, 2002-07

Merlin works its magic…

…while other parks struggle

Who has visited a theme park

Figure 35: Theme park visiting in the UK, by demographic sub-group, October 2007

Broad appeal of parks presents challenges for operators

The Internet - an essential tool for keeping in touch with visitors

‘Softer’ park or attractions could appeal to older people

Small number of foreign theme park visitors could be converted

Who has been where

Figure 36: Most popular theme parks visited in the UK, by demographic sub-group, 2007

Figure 37: Next most popular theme parks visited in the UK, by demographic sub-group, 2007

Young adults go for parks with excitement…

…while families go for fun and education

Legoland hits the AB jackpot

Theme park visiting combinations

Figure 38: Theme parks visited in the UK, by most popular other theme parks visited, October 2007

Figure 39: Theme parks visited in the UK, by next most popular other theme parks visited, October 2007

Merlin’s virtuous circle

Northern parks compete with each other but also Alton Towers

Increasing the Attraction

Key points:

What would make visits more enjoyable

Figure 40: Factors that would make theme park visits more enjoyable, October 2007

Room for improvement

Catering hits a raw nerve

Queues: a fact of life but can anything be done

Pay-as-you-go alternative finds favour

What would make visits more enjoyable - demographic analysis

Figure 41: Most popular factors that would make theme park visits more enjoyable, by demographic sub-group, October 2007

Figure 42: Next most popular factors that would make theme park visits more enjoyable, by demographic sub-group, October 2007

Food and drink value high up the menu for families and lower-income consumers

Pay more to jump the queues

Pay-as-you-go could help families

Better quality toilet facilities particularly important to women

What would make visits more enjoyable - visitors and non-visitors

Figure 43: Factors that would make theme park visits more enjoyable, by UK theme park visiting, October 2007

Theme park visitors want more reasonable catering prices

What would make visits more enjoyable - by individual theme park

Figure 44: Factors that would make theme park visits more enjoyable, by most popular theme parks visited in the UK, October 2007

Figure 45: Factors that would make theme park visits more enjoyable, by next most popular theme parks visited in the UK, October 2007

Merlin needs to wave its magic wand over catering

Northern parks rated poorly

Southern park visitors attracted by queue jumping

Pay-as-you-go tonic for Legoland

Combinations of incentives

Figure 46: Most popular combinations of factors that would make theme park visits more enjoyable, October 2007

Figure 47: Next most popular combinations of factors that would make theme park visits more enjoyable, October 2007

Catering value part of overall visitor experience