David J. Sangree, MAI, CPA, ISHC and Chris Ballou, CHIA attended the 2021 IAAPA Expo in Orlando. It was great to see so many in the industry back at an in-person event. Here are some key takeaways from the convention:
- David (along with industry leaders from Great Wolf Lodge, Six Flags, Splash Lagoon, and Typhoon Texas) conducted a session on the effects of COVID 19 on the waterpark industry in 2020 and growth projections for 2021 and beyond. Confidence is high that attendance will return to pre-COVID-19 levels by 2023. Although attendance has been slow to come back., rates have significantly improved across the industry. While we expect admission price growth rates to moderate or stabilize, we do not anticipate a decline or correction.
- There has been an increase in the use of cashless only payment methods that a wide range of waterparks. While there were some growing pains, this has saved operators money in terms of labor, operating expenses, and shrinkage. Guests have adapted as well, and this has also produced greater per cap spending as guests are inclined to spend more when using credit than when using cash. This trend will likely continue into the future.
- Labor shortages and staffing challenges have been a common theme in the industry. With less domestic people working and increased restrictions on international labor, operators have had to get creative. Some operators have raised hourly wages to outbid their competition; however, many operators cannot afford to engage in a labor wage war. Operators need to become more innovative with benefits such as college tuition credits and or other incentives for their staff members. Technology also offers some opportunities but requires initial capital investment.
- Supply chains have been negatively affected by the pandemic. Some operators were quoted up to a year wait on lifejackets. The waterpark industry has been affected in conjunction with many other industries in the United States and needs to adjust their supply management. Multi-property owners are looking to consolidate their inventories and competitors are considering bartering or sharing supply orders.
- Guest demographics are changing at waterparks, leading to a change in marketing efforts. Many initially thought Gen Z behaved similarly to Millennials, but this is not always the case. Some characteristics we have seen from marketing to Millennials over the last decade include the fear of missing out, being more price conscious, wanting to influence and be seen, planning their activities as a group, and embracing leisure time at national parks. With Gen Z, there is a return to brand loyalty. Gen Z also prefers to observe as opposed to be seen. They like to research and plan their activities on their own regardless of what their friends may do. They also tend to favor amusement parks and attractions over national parks.
- Other new trends include a shift in attractions to more immersive activities such as E-sports and virtual reality. The growth of the Meow Wolf brand has shown that immersive art can generate strong crowds based upon their initial success at their new Denver location.