IAAPA report highlights global surge in the 'experience economy'

Consumer spending on visits to theme parks surged by 5% to a record US$44.8 billion last year driven, in part, by guests posting images of their experiences on social media during their visits.

As revealed in the 2018 Global Theme and Amusement Park Outlook report from the International Association of Amusement Parks and Attractions (IAAPA), this trend is particularly common with millennials.

As the IAAPA report explained “an emerging trend is the growing preference among consumers to spend on experiences rather than products. This is evident in the cinema and live music markets, where people are willing to spend more for out-of-home experiences.

“This same trend is believed to also be contributing to ongoing growth for theme parks, which market their unique experiences.”

The growth of the ‘experience economy’ reflects the results of a Harris Poll survey conducted on behalf of ticket agency Eventbrite in 2014. It showed that 78% of millennials would choose to spend money on a desirable experience or event over buying something desirable while 72% said they wanted to increase their spending on experiences rather than physical things.

The survey showed that 60% of millennials had shared their events and experiences on social media in the previous year compared to just 34% of the 45 to 54 age bracket. Crucially, 69% of millennials said they experienced fear of missing out by seeing photos and posts of what their friends had been experiencing.

This trend is seen as boosting the theme park industry as, unlike cinema and live music, there is no in-home equivalent to a theme park.

It helped to propel worldwide theme park attendance to a record 1.1 billion in 2017, an increase of 31.4 million on the previous year. That trend is set to continue as the IAAPA report forecasts 3.8% of compound annual growth in attendance between 2017 and 2022 giving a total of 1.3 billion theme park visitors in the final year of the period.

Spending is set to surge even more as prices rise and new attractions open. According to the report, this will grow by 6.5% annually over the next four years to hit $60.5 billion in 2022. It follows a US$2.1 billion increase last year with the fastest-growing market being the Middle East and North Africa.

Spending in the MENA region rose 80.2% to US$182 million while attendance rose 71.9% to 5.5 million. While small by global standards, the rise was driven by the opening of a string of new parks in 2016 including the IMG Worlds of Adventure which features lands based on Marvel and Cartoon Network characters followed by the Dubai Parks and Resorts (DPR) group of the movie-themed Motiongate, Bollywood Parks Dubai, Legoland Dubai and its neighboring water park.

Last year was the first full year of operation for all of the parks with DPR attracting nearly 2.3 million visitors alone which made it the principal driver of overall growth in the MENA region according to the report. That’s just the start.

Earlier this year the doors open to the US$1 billion Warner Bros. World Abu Dhabi, the biggest-ever indoor theme park. In 2022 it will be joined by the first SeaWorld outside the United States with two Six Flags parks due to open over the next few years in Saudi Arabia and Dubai.

Theme park spending in the MENA region is expected to nearly triple over the next five years, rising at a 24.3% compound annual growth rate to US$541 million in 2022. Attendance is due to follow suit and hit 12.7 million in the next four years.

The Asia Pacific recorded the world’s largest attendances last year - 465.3 million - with predictions that 601.2 million people will visit theme parks in the Asia Pacific region by 2022.

This is expected to be driven by the opening of Universal Studios Beijing, which is expected to be the world’s biggest theme park development.

According to the report, “Universal Parks and Resorts is increasing its investment in Universal Studios Beijing from US$3.3 billion to US$6.5 billion. The park, expected to open in 2021, will feature a ‘Harry Potter’ attraction, a ‘Fast & Furious Supercharged’ attraction, a hotel, as well as retail space and a shopping and entertainment area.”

In addition “Six Flags has plans for three parks in the Nanjing area - the first opening in 2021 - and is planning a total of 11 parks in China in the coming years.

“As part of a multi-year expansion, Hong Kong Disneyland Resort will add new themed areas, immersing guests in the worlds of ‘Frozen’ and Marvel, and recently debuted a new ‘Moana’ stage show. Oriental Land Company, the operator of the Tokyo Disney Resort, is more than doubling its planned expansion budget with a $2.2 billion project to expand Tokyo DisneySea, adding a new hotel and new themed port featuring ‘Peter Pan,’ ‘Tangled’ and ‘Frozen.’ The project is expected to be completed in 2022.”

Now the world’s second largest market, attendances at North American parks hit 399.7 million, growing at a rate of 0.7% compared to 2.3% the previous year. The increase in spending was also down and fell 1.1 percentage points to 3.8% giving it a total of US$22.9 billion.

The report explains that “extreme weather in some areas hurt regional parks in 2017.

“A rebound is expected beginning in 2018, as attendance is on the rise and new attractions are being introduced.”

IAAPA’s International Attractions Expo is being held from 12th to 16th November at the Orange County Convention Center in Florida, USA.

Click here for more information in the Australasian Leisure Management industry Calendar.

Images: Guests at Shanghai Disney lad (top), Warner Bros. World Abu Dhabi's Gotham City universe (middle) and plans for Universal Studios Beijing (below).