…but what’s the return on investment?
The industry’s most accepted method of determining a new attraction’s effect on visitor numbers is to simply compare attendance with the season before it was introduced. But how reliable is this? Pieter Cornelis from the Breda University of Applied Sciences in the Netherlands believes it’s time for a scientific approach, and he’s got a formula to prove it.
For the majority of parks across the globe, the 2009 season is rapidly approaching. A number of operators will be putting the finishing touches to a new attraction. The installation is nearly done, the inspection bodies have carried out their thorough tests, and the marketing team is, at this very moment, executing a brilliant campaign based around the new attraction.
The cost of all this will be familiar to you as a park operator, and it is highly likely that you have set strict attendance targets that have to be met in order to get a proper return on that investment. But how do you measure the effect of your new attraction on attendance? How do you know whether you have achieved a satisfactory return? Let me attempt to explain.
CHART 1
Effect of 2002 Attraction on Theme Park’s Attendance
2001 Attendance = 1,200,000
2002 Attendance = 1,000,000
2002 Attraction Effect = -200,000
Effect of 2008 Attraction on Theme Park’s Attendance
2007 Attendance = 1,200,000
2008 Attendance = 1,300,000
2008 Attraction Effect = 100,000
Take a look at Chart 1. Simply comparing attendance from one season to another may lead to inaccurate results. Consider, for instance, the 2002 attraction. Is it realistic to assume that the new attraction actually lead to a visitor decrease of 17%? Or could it be closer to the truth that the decline in attendance was caused by alternative factors, such as a rainy summer, the opening of a competing facility nearby or a global decline in tourism following the 9/11 attacks? It is commonly accepted both within the academic world as well as within the amusement industry that several factors can have a negative influence on park attendance. This causes one to wonder whether or not these various factors can have a positive influence as well.
As I learned during my tenure as a research and strategy director at the Efteling in Holland, there is a very apparent lack of knowledge in the industry regarding the true impact of new attractions. Even though millions are spent each year, my discussions with several major European theme parks reveal that the true impact and return on investment (ROI) regarding new attractions is largely unknown and primarily based on ‘guesstimates.’ Several other questions remained unanswered, such as: What factors influence the effect of a new attraction on attendance? How can we best calculate the ROI of a new attraction? Can we predict a future new attraction’s ROI/effect on attendance? What is the ideal investment strategy for our current situation; and should we invest every single year or at multi-year intervals
In this article I intend to present my findings from “Adventureland,” one of several European parks I have worked with as part of my PhD on the subject. It should be noted that Adventureland is a fictitious name in order to conceal the real park’s identity. I have performed similar research projects at over 10 other European parks, and while Adventureland wishes to remain anonymous, it may be stated that this theme park is located in the southern part of Europe and annually welcomes over one million visitors.
Case Study – Adventureland
In co-operation with Adventureland’s management, a large-scale research project was set up in order to identify and gain an in-depth insight into the various factors influencing attendance and quantify the real effect of the park’s new attractions on that attendance. It’s actually a fairly simple process.
We all understand that a new attraction’s effect does not only depend on the quality of the attraction itself, but on variables such as price elasticity, marketing spending, weather, price of fuel and many other factors. When you discuss these factors with a park’s management team, it doesn’t take long to produce a list with over 50 variables. It is then merely a case of mapping these variables as far back in time as possible on a daily basis.
This means that you will have to know what the temperature was in your area on, for instance, April 17, 1997, what the price of a litre of petrol was at the time, what the park’s entrance fee was etc, etc. To uncover all of that information requires some time in the archives, but almost every park can unearth this information if they try. The most essential piece of information is the daily visitor numbers. After that, it is our challenge to unveil the underlying relations between all of these variables.
To do so, I use a precise and advanced econometric model to look at the variance in data. For Adventureland this model turned out to be 99% accurate in determining the attendance levels for a particular year based on all variables.
CHART 2
Effect of Adventureland Attraction on Attendance
Model A (with new attraction) = 10%
Model B (without new attraction) = 2%
Average Effect = 8%
Now take a look at Chart 2. The effect of each new attraction opened at Adventureland during the span of the research project was calculated individually (Model A), compared against a situation where no new attraction would have opened in that particular year (Model B). The subsequent calculation of difference in attendance between Model A and Model B offers an insight into the effect of the new attraction that was introduced in the specified year. The results obtained from this method of calculation varied from a relatively small positive long-term effect of 4% to a significantly larger positive long-term effect of around 12%. These results enable the park’s management team to evaluate an attraction’s performance and determine whether or not the ROI of the attraction is to be considered satisfactory.
Now I am able to accurately determine a past attraction’s ROI, I can set challenging new goals for the future. What we have accomplished so far greatly benefits the industry, but the real question on everyone’s mind is of course “What will the ROI of this particular new attraction be?” I am now developing a method for accurately forecasting this.
Attraction Psychology
Within the amusement industry, many different methods for determining guest satisfaction are used. Looking at the methodology of these studies, however, you will find that they are quite alike; they all exclusively take visitors’ conscious responses into account. This stimulates the industry’s interest in research, and I believe this is very important, but I must highlight the importance also of subconscious responses.
Approximately 95% of all of our mental and emotional responses occur on a subconscious level. Most research projects, however, only focus on the conscious 5% of responses. These studies might lead to interesting insights, but we often miss out on crucial information by limiting ourselves to conscious responses.
I acknowledge that it is difficult to find a proper research methodology to measure subconscious responses and processes. However, the answer may lie in the patented “ZMET” (Zaltman Metaphor Elicitation Technique) method in combination with implicit cognition and association tests.
Preliminary ZMET interviews carried out at Adventureland have resulted in interesting and exciting insights. These results are now being used to develop further research experiments to gain an ever greater and deeper insight into the determinants of a new attraction’s impact on theme park performance. There is still a long way to go before any predictions can be made regarding a new attraction’s impact on theme park performance, but we are moving ever closer to our goal.
If you want to know what the ROI of your park’s new attraction is, if you want to know why your guests visit your facility and not your competitor’s, or if you’ve struggled with some or all of the questions posed within this article, then do get in touch (see website details below). Hopefully this research project can contribute to the knowledge and further professionalism of the industry.
Pieter Cornelis is a senior lecturer in theme park management at NHTV Breda University of Applied Sciences, and is currently performing a PhD research project on the impact of new attractions on the performance of European theme parks. He is currently looking to work with other parks, and assures operators that any collaboration will be anonymous. Visit his website for more information: www.pietercornelis.com
