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  • UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

    Academics at the UCLA Anderson School of Management and Business recently published a study and research paper on Southern California Theme parks, most noteably the Disneyland Resort. You can find it at the link here.

    I was reminded that Walt Disney heavily relied on the expertise and research of Stanford University in selecting the location for what became Disneyland.

    With all the talk about building new "E-ticket" and other attractions, talk about hispanics at the park, and the children vs. teenagers vs. adults on the message board, I thought it was worth going over some of their findings, especially since they address misconceptions that are common, even within the industry.

    Conclusion one is that Population Growth drives Attendance Growth. (They note that Economic Factors Cause only Annual Variations). Fair enough. This means, as others have noted, that it's the growing population in Southern California that makes the biggest difference as to the Disneyland Resort, not tourists.

    Quote: "For Southern California attendance, just two variables predicted 77% of the annual variation in attendance: the population of California, and the California unemployment rate."

    Conclusion two is that "Weather Has a Minimal Impact on Attendance."A simple explanation is that on a rainy day, everyone can see that the parks are very empty. [...because everyone is INSIDE]. It is much harder to observe the slight increase in attendance when the sun comes out and the locals return."

    Conclusion Three: Higher prices Do NOT Deter Attendance. Clearly this is true as to Disneyland, where prices have increased rapidly, and attendance is at all time highs, according to their study, based upon interviews with attendees, and a 1999 Los Angeles time study. The study found, amazingly, that the higher FUEL prices rose, the greater the attendance at theme parks in Southern California.

    Quote: Conclusion Four: The Industry has Many Misconceptions of What Drives Attendance Levels. The study again mentions weather, and fuel prices (above), but goes on to examine other factors, that are ignored by park management in many cases, but are substantial factors in park attendance:

    A. Male teenagers are the driving force in park attendance. Quote: "Males consistently had a more positive correlation with Southern California theme park attendance than females, and that teenagers showed the strongest correlation with attendance (see Table 15). ... However, it was surprising to see this result for Southern California, where the industry has a broader focus. Disneyland attracts many families with young children as well as adults without children, and Legoland focuses very specifically on a younger audience."

    B. Attendance at theme parks is highly correlated, and thus driven by, Hispanic Families, and Hispanic population trends may be a better attendance predictor than the total California population. Quote:

    C. Building new attractions do not help drive attendance.D. Capacity may inhibit attendance growth. Quote:

    I'm sure this will spur some discussion, and the paper does have some recommendations to parks such as Disney, and some interesting comments on California Adventure, and other parks, as well as a great bibliography of supporting research. Check out the thesis and supporting research for yourself.
    Last edited by RobotMirror; 06-12-2006, 04:40 PM. Reason: Edited to change title

  • #2
    Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

    The economics major in me absolutely loves you for posting this.

    Comment


    • #3
      Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

      a whole lotta 'Myth' puns are coming to mind right now....
      Growing older is manditory
      Growing up is however, optional

      Comment


      • #4
        Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

        Originally posted by jessk
        The economics major in me absolutely loves you for posting this.
        I don't care why you love me, just love me.

        Comment


        • #5
          Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

          Originally posted by OogieBoogie
          a whole lotta 'Myth' puns are coming to mind right now....
          Assuming that is true, then you "Myth" the point of the entire paper.

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          • #6
            Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

            Originally posted by Frogberto
            Assuming that is true, then you "Myth" the point of the entire paper.
            Sorry.. that was my 'myth'take.
            Growing older is manditory
            Growing up is however, optional

            Comment


            • #7
              Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

              Nothing in there how LOWERING average admission prices through some pricing scheme will increase attendance or at least keep attendance level?
              Not a very complete study, then.

              I'd like to see attendance figures, side-by-side for all of the SoCal parks, to see the correlation to population growth and unemployment level.

              Secondly, capacity might be important if a park were to LOWER its capacity.

              Read parts of it. Conclusion: Meh. It's more about the total SoCal Industry than just Disneyland.
              Last edited by sediment; 06-12-2006, 05:51 PM.

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              • #8
                Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                Originally posted by sediment
                Nothing in there how LOWERING average admission prices through some pricing scheme will increase attendance or at least keep attendance level?
                Not a very complete study, then.

                I'd like to see attendance figures, side-by-side for all of the SoCal parks, to see the correlation to population growth and unemployment level.

                Secondly, capacity might be important if a park were to LOWER its capacity.
                Well, I'd have to disagree that it wasn't a complete study, and I didnt' have room in a simple post for the footnotes, bibliography, and charts. But they did factor the correlation between price and attendance, and came up with the following correlation charts and comments:

                "The L.A. Times reported in 1999 that extensive surveys conducted by Disney and Universal indicated that the high prices of theme park vacations were not deterring visitors. Our research led us to the same conclusion. None of the price factors had an impact on the total Southern California attendance model. When looking at attendance per capita, we found extremely low or nonexistent correlations with price, and none of the correlations were negative (see Table 14.)

                Table 14:

                Correlations Between Price Variables and Attendance per Capita

                Correlation of attendance, up or down, to ticket price: .027 (low).

                Consumers appear fairly insensitive to price when it comes to theme parks, and this has allowed parks to continually raise their prices without affecting attendance. There must eventually be a limit to the price consumers are willing to pay, and a recent survey by Amusement Business found that 84% of respondents felt amusement park prices are too high. However, it is rare to find consumers who believe the price of anything is too low, and there is no evidence yet that high ticket prices deter people from visiting theme parks.

                For out-of-town visitors, a high level of price insensitivity can be expected with relation to ticket prices, because tickets are a small portion of total vacation costs. However, even fuel prices and exchange rates, which affect the cost to consumers of taking a vacation, apparently have no negative impact on attendance."

                In other words, if price was the leading variable that leads attendance, you would see a correlation, up AND down. That doesn't exist, meaning that no matter how high or low prices go, it doesn't correlate well with attendance at all.

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                • #9
                  Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                  Thanks. I skimmed through and was underwhelmed.
                  Then again, I don't run a theme park, so it doesn't do me too much good.

                  I'm thinking that there are likely fewer guests buying day tickets as the price increases, especially during the time period in this study. The assumption that everyone entering the park is purchasing day tickets is quite incorrect. Concluding anything with this assumption thus is also incorrect. Do note that all the parks have adopted pricing schemes that lower the average ticket price far below the posted daily ticket price.

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                  • #10
                    Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                    The study found no correlation with price. I don't know how else I can say that. It's true that for almost all parks, you can find discounted tickets, but they are usually measured as a discount off of the full price, which in the case of Disney, many people pay.

                    In other words, as the full price rises, it also brings the "discounted" price up. That doesn't, however, correlate to attendance as well as population, or other factors, do, according to the data.

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                    • #11
                      Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                      I understand what the study concluded. I don't think it has all the data, though.
                      And you are now assuming that all guests enter the park through some daily or multiple ticket scheme. Sad to say, this is not the case. Matter of opinion (not fact), I believe that when a certain scheme's price rises, the average daily cost drops or stays constant, as people go more frequently on their particular ticket media in order to "get their money's worth."
                      Some data that I think is somewhat valid:
                      1. Number of Annual Passport sales/renewals have increased greatly since about 1995.
                      2. This should mean that Annual Passport attendance has increased. The one/multi-day ticket attendance is the rest of total attendance. Since we don't know exactly what the former is, it is impossible to know what the latter is. Since we don't know how many guests are using price as a function in their decision-making process, we can't conclude that there is any or no correlation of price and attendance.

                      So, I don't agree with the conclusion, since I don't agree with the use of posted ticket price as a proxy for all guests' costs to enter. It might be down to as much as 50%, in the case of DCA (according to Al).

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                      • #12
                        Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                        You "believe". But do you have any data to prove your beliefs? The LA Times study cited was a fairly comprehensive study of what people were willing to pay in 2003 to visit Disneyland and Disneyland's California Adventure.

                        Because the authors also correlated with total revenue, and because numbers for annual passport attendance are known, and so is one/multiday ticket attendance, I don't know how you can see those numbers are impossible to know.

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                        • #13
                          Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                          There are many things in this report that I agree with, but the issue of new rides not producing growth is just not the case. I know that it is looking at pure attendance numbers, but it is not using the responses of guests.

                          I know I have heard many times that guests come to Disneyland because they heard about a new ride. I know that as a kid, when a new ride was built, I particularly wanted to go. Americans love it when a product is "new." One cannot build a whole park, but quality rides DO build attendance.

                          What the problem in the study sees is that poor quality rides do NOT build attendance. Also a new ride does "fade" in popularity. After all there was once a time that people ran to ride Star Tours. That is why you must continue to innovate. This investment is not waisted because the more total things an amusement parks offers draws guests in the long-run.

                          Rides must be not just new but also BETTER and APPEALING rides. There is a thought that just a NEW ride is good enough to bring in guests. I believe that the ride has to be appealing too. Just as a movie has to be appealing in some way to the prospective movie-goer.

                          I know that looking at attendance charts can reveal many things, but what it misses is public opinion which drives the attendance. Without that, the researcher is left to guess at the cause.
                          Jiminy Cricket Fan
                          .................................

                          Love Disneyland and Walt Disney World!

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                          • #14
                            Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                            It is already widely known that price increases do not affect theme park attendance. This study shows nothing new as far as I'm concerned. New rides always just give a short spike in attendance, but they also grow capacity, which is the main driving force... and they keep attendance at a decent level. If a park suddenly stopped building new rides and shows, the park's attendance would start to decline. The only interesting area of this is that it is a regional study, and it shows the make-up of the Southern California region versus Orlando. It's interesting.

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                            • #15
                              Re: UCLA Academic Paper on Myths and Misconceptions about DL Resort and Theme Parks

                              Originally posted by Frogberto
                              Conclusion two is that "Weather Has a Minimal Impact on Attendance."A simple explanation is that on a rainy day, everyone can see that the parks are very empty. [...because everyone is INSIDE]. It is much harder to observe the slight increase in attendance when the sun comes out and the locals return."
                              What were the results for daily attendence??? Apples and Oranges here I believe. The so called myth would be that it is raining today so Disneyland will be less crowded.....the study states that weather has no impact on annual attendence.
                              Waiting for Godot Micechat.com

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