How Park Programming Impacts Cost Management

In a four part series of Insights articles, we’re exploring the reasons why theme parks cost so much to develop – and what developers can do to deliver and operate a product with cost management in mind.

What can developers do about high costs?

In our first article, we discussed the increasing role of technology in theme park development – driven by heightened consumer expectations in storytelling – and how theme park developers are adapting to these expectations.

We noted the importance of storytelling environments and more advanced use of technology than the last to meet today’s guest demands and deliver on the expectation of hyper-immersive experiences, which challenges cost management.

The solution is for theme park owners and developers to deliver a more economic product that strikes a balance between meeting today’s consumer demands and operating on a sustainable budget.

This can be achieved looking at the project through the lens of three influential cost categories:

1. Understand where the project falls on the Park Experience Index.

2. Look at all variables of Park Programming.

3. Present a strategic Creative Mix.

The Park Experience Index

In our second article in this series, we described the Park Experience Index as a metric which informs us on the value guests derive from a park, measured against the developer’s annual cost per attendee to deliver the experience.

The Index defines the various types of park – Super Theme Parks, Theme Parks, Studio Parks, Iron Ride Parks, Regional Parks, and Amusement Parks – each offering different experiences, with the annual cost per attendee to deliver those experiences varying with each type of park.

The Index also shows that the cost to deliver these different experiences not only rises by type of park, but also rises with the experience level found there. Further, we addressed how the Index frames the costs so that all team members are aligned on the expectations of the type of park developed.

Park Programming

We will now look through the lens of the second influential cost category: the many variables of Park Programming.

There are several variables of Park Programming that affect a park’s capital development cost. These include:

The design day factor, which looks at an average of the top attendance days to determine the number of required attractions, is influenced by the distribution of attendance over time. There is a popular expression in the industry that says ‘you don’t build your park for Easter Sunday.’ It means that you shouldn’t plan your park based on peak days because it would be exhorbitantly expensive, and be empty most of the year.

If annual attendance is distributed evenly over the year, hourly guest capacity is reduced compared to seasonal attendance, rising mostly during the summer months, weekends, or holiday seasons. 

Industry engineers initially tend to assume a highly varied seasonal attendance, but with operational experience and marketing awareness, seasonality tends to become more even over the years of operation.

Programming the design day factor for initial experiences increases the number of required attractions – thus, the best scenario is to base the design day factor on operating year five, when the operational and marketing teams have implemented the means to reduce seasonality.

The average attraction cycle time and the theoretical hourly ride capacity (or THRC, the theoretical number of passengers that can be handled by an attraction, such as a ride or show, each hour) will impact the number of attractions required at the park. The higher the number of guests carried per attraction and longer queue wait times, the fewer attractions needed per hour.

Shorter attraction cycle times are more prevalent with Iron Ride Parks – where the rides are equipped with iron runners to increase speed – or Amusement Parks than with Theme Parks or Studio Parks. A typical rollercoaster cycle time is three minutes long, while a typical tram ride or theater show is 15 minutes or longer.

Numerous high-energy, short-cycle attractions that are highly immersive will increase capital cost. Mixing in theater shows and long transport vehicles, such as a themed train or a tram tour, will decrease the number of attractions needed.

Attraction efficiency and operational factor take into account how often the attractions are not operating. Attractions that are inventive and one-of-a-kind require more maintenance care, resulting in more down time. Operational training with simple means keeps the attractions running efficiently. These two factors are also influenced by the choice and design of the attractions. 

Peak in park measures when the park has maximum attendance during the operating day. Programming early and late events levels off peak attendance, which in turn decreases the number of attractions or THRC needed to deliver a great experience.

Food capacity is based on serving all ‘peak in park’ guests within three operating hours, which determines the hourly meal capacity (HMC) required. The type of service and the associated cycle times for each type of service will determine the number of seats.  

For instance, the typical HMC of a ‘buffeteria,’ a cafeteria-style eatery where food is served from a buffet, is twice the HMC of a traditional sit-down restaurant, while a fast food restaurant offers three times the HMC of a sit-down restaurant. Thus, fast food facilities are generally the most efficient restaurant type.

Further, minimizing the menu has a direct effect on the kitchen equipment and the cost, while a seating mix that favors outdoor or covered seating can also reduce capital cost.

Retail capacity is based on the anticipated retail sales per guest. This capacity is strongly influenced by the intellectual property (IP) being used in the park design.

Guests tend to purchase their souvenirs at the time of exiting, so locating the majority of retail space at the exit area is beneficial to the guest. Further, when retail space in heavily concentrated in one area, storage areas in shops can be mostly centralized to reduce capital cost and increase efficiency.

With a resort program that consists of hotels, retail, dining, and entertainment venues, the park’s food and retail capacities can be supplemented with these common programs to produce an overall reduction in capital cost.  

Some guest services and back-of-house operations such as call centers, warehousing, administrative services, laundry, employee cafeteria, and trash or recycling can be performed by third-party firms or in leased facilities, which reduces capital cost.

Owners and developers can also realize infrastructure capital cost savings if local utility companies build and operate the park’s high-voltage electrical and/or natural gas services. Localizing the HVAC equipment versus having centralized chillers will also decrease required budget for the distribution of the water services.

Guest parking should be adequate but minimized to lower capital costs. Cost management can also be achieved by sharing parking with other developments or having a third-party partner design, build, and operate the parking. New trends towards ride share services will likely reduce need for parking in the long run however planning and operational impacts must be considered.

A deep understanding of all the above factors is a strong starting point to guide stakeholders as they strive to find the ideal balance for their particular development.

Once all of the variables of Park Programming are settled, owners and developers can focus on finalizing the strategic combination of components of a theme park that are tailored to the realistic target demographics.

A combination of factors related to the site infrastructure, which guests never see, can also drive up costs substantially. Owners need to ensure that the site is clean and stable, the transportation system provides easy access to the site, and the supporting utilities are delivered to the site boundary. These costs can mount quickly and must be understood from the time the site is acquired. Depending on where the site is located, these components can often be provided by the municipality.

The Creative Mix

In part four, our final article about the categories affecting the cost of developing theme parks, we’ll dive into the Creative Mix. This involves strategically analyzing a location’s demographics and devising an optimized mix of shows, rides, facilities, and other components. When this mix hits the mark, developers can create a park that will be utilized to its full potential. If this mix misses the mark, the park will not appeal to enough of the correct people and attendance will be low, or the park will have idle assets.