In the ever-evolving world of the attractions industry, staying informed about current trends and challenges is paramount to success. That’s why we are excited to share the latest findings from IAAPA's global research team in their brand-new Quarterly Outlook Survey. This comprehensive survey, with insight provided by invitation by nearly 70 members this summer, provides invaluable insights into the state of the attractions industry and sheds light on what lies ahead.
Here are the key takeaways:
1. Economic Outlook: Somewhat Optimistic but with Concerns
The overall economic outlook is somewhat optimistic, with a more favorable view towards individual country economies compared to the global economy. However, several concerns loom large:
High Inflation: Many respondents expressed apprehensions about high inflation rates, which can erode profit margins and impact pricing strategies.
Labor Costs: The rising cost of labor is another pressing issue. Attracting and retaining talent while managing wage increases is a delicate balancing act.
Interest Rates: The survey highlighted concerns about interest rates. Higher rates can affect borrowing costs and operators' plans to expand and grow their businesses.
Geopolitical Tensions and Government Uncertainty: Geopolitical tensions and governmental instability are fueling concerns for the global economy. These factors can impact international tourism and global trade.
2. Ongoing Labor Pool Challenges
The challenges associated with the labor pool are expected to persist. Notably, there is a greater concern for skilled trade labor and other operational/frontline workers compared to professional/managerial staff. This reflects the immediate need for employees with specialized skills in the attractions industry.
3. Positive Business Performance Trends
Despite these challenges, the attractions industry has shown resilience. Most business metrics have seen an uptick in the past six months, attributed largely to the ongoing recovery from the pandemic. This trend is expected to continue, with business performance projected to improve further in the next six months.
Capital Investment: Encouragingly, one-quarter of respondents plan to increase capital investment by 10% or more, reflecting confidence in future growth.
Revenue and Profitability: One-fifth of respondents anticipate revenue and profitability to grow by 6-10%, while three in 10 expect modest gains (1-5%) in attendance, revenue, and per capita spending.
4. Key Business Opportunities
The survey identified several top business opportunities for attractions in the near future. These include:
New Product Development: Expanding offerings with new parks, attractions, and events.
Increased Group Sales: Focusing on group sales to boost revenue.
Targeted Marketing: Leveraging more precise and effective marketing strategies to reach the right audience.
5. Staffing Challenges at the Forefront
The attractions industry's biggest challenge, as highlighted in the survey, is staffing. Attractions are grappling with a shortage of qualified labor, retention issues, and a workforce that increasingly desires flexible schedules, reduced hours, and higher pay.
Additionally, attractions are facing profitability concerns due to increased operating costs while catering to guests with limited disposable income. Balancing quality experiences with affordability remains a complex challenge.
Additional Insight from the IAAPA Board of Directors
The challenges outlined above align with insight provided by the IAAPA Board of Directors, a collection of 25 attractions industry professionals representing a dynamic tapestry of owners, operators, suppliers, manufacturers, service providers, and leaders working around the world. The IAAPA Board members came together in a series of meetings ahead of IAAPA Expo Europe in Vienna. During a transparent session, each reported on year-to-date results and concerns affecting their business and region.
An overwhelming amount of member operators stated changing weather patterns adversely affected their operating schedule. From operating days lost by tremendous rainfall or searing heat, operators shared the weather is to blame for lower attendance at attractions in Europe, North America, and Latin America. Unseasonable rainfall, tropical storm activity, hurricanes coming ashore in unexpected locations, chilly temperatures, and heat waves thwarted operations. In addition, several cited incorrect weather forecast predictions as a deterrent that impacted visitation. For example, when weather forecasts and metrology apps predict precipitation—and conditions remain dry—guests still cancel their visit with the expectation that rain will negatively impact their expectations. Meanwhile, unseasonably cool weather impacted attendance at outdoor water parks early in the summer. Some operators identified shade structures, additional landscaping, and air-conditioned queues as worthy investments to increase length of stay time.
Many facility operators also cited the access to financing as a challenge. Those looking to borrow money to fund capital expenditures or improvements are having a difficult time securing a loan.
- Owners and operators looking for additional insight on financing should consider joining an EDUSession at IAAPA Expo in Orlando.
The IAAPA Board of Directors also identified several trends:
Revenue Generation:
Specialty food and beverage (F&B) items continues to drive desire. Attractions have seen positive results with festivals featuring seasonal music, beer, and food activations that have driven attendance and in-park spending.
Growth:
Several operators have new properties coming online in the fourth quarter of 2023. From new hotels to water parks, there is optimism surrounding the demand of additional assets.
In addition, others shared now is a good time for operators looking to take advantage in changes in the market to make acquisitions of existing properties that may be struggling with a full recovery from the pandemic. Even with high-interest rates and the period of “free” loans being over, this may be a prime time to make a purchase with several opportunities available in the marketplace.
Staffing:
Several operators have invested in building employee additional housing complexes. The accommodations allow facilities to hire from outside their region and attract international employees. Offering seasonal labor incentives has also allowed several attractions to better staff their facilities.
International Development:
Design work for future projects is seeing an uptick in China. In addition, service providers have found plentiful business opportunities in Saudi Arabia, where the opening of new attractions continue at an accelerated pace. Established regional facilities are now moving forward with initiatives to redefine themselves as a destination park with the goal of attracting a wider audience from further away.
Manufacturing:
While suppliers are apt to create new rides and products, supply chain interruptions and delays continue to slow their progress. Electrical components can take more than a year to obtain, making delivery and opening schedules tight. In addition, multiple requests for custom-designed projects including modifications to address sustainability and accessibility accommodations, are driving some manufacturers to source new talent to keep up with demand.
If you appreciate these insights, you can help IAAPA and your peers to further improve the results with our next survey.
IAAPA is committed to providing you with the latest insights and support to navigate these challenges successfully. That’s why we’re opening this survey up for larger participation within the entire association. We invite the senior leadership within our facilities and operator constituency to participate in the next survey, which we’ll deploy later this month. Going forward, survey participants will receive all the data from the survey and all members will receive an executive summary and snapshot from the results.
Thank you for being part of IAAPA, and we look forward to sharing more valuable insights with you in the future. If you have questions, you’re welcome to directly contact Kelly Repass, our head of global research, at [email protected].
If you would like to be part of this important forward-looking initiative, please register here.
You can also access a PDF of the quarterly outlook survey here.
