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Travel and Tourism Research Association: Advancing Tourism Research Globally

Outlook on the Attractions Industry Outlook on the Attractions Industry

Jerry Henry H2R Market Research

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October 28-30, 2013 ~ The Drake Hotel ~ Chicago, Illinois, USA

Outlook on the Attractions Industry

Presented by: Jerry Henry, President and CEO, H2R Market Research

For more information, contact Jerry at jhenry@h2rmarketresearch.com

TTRA OUTLOOK FORUM:

Outlook on the Attractions Industry

Prepared by Jerry Henry | H2R Market Research | October 2013

3

Attraction Industry Performance

in 2012.

Emerging trends developing in

response to changing consumer

behaviors.

Outlook for 2014

Overview

Aggregate U.S.

Attractions

visitation was

up 2.4% in

2012…

…much better

than the 0.7%

decrease in

2011.

RE

SU

LT

S

Source: H2R Market Research

Most Segments of the Attractions Industry

Posted Increases in 2012

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

Art Museums

Musical theater

Historic sites

Major sporting events

Museums

State/national park

Water Parks

Theme Parks

Science Centers

Aquariums

Botanical Garden

Zoos

Source: TEA/AECOM, Morey & Associates, Broadway League, ESPN, NPS, H2R Market Research

Source: TEA/AECOM 2012 Global Attendance

Worldwide Theme Park & Museum Attendance

Category Variance 2012 2011

Theme Park Groups Worldwide +6.7% 357.8M 335.2M

Top 25 Theme Parks Worldwide +5.2% 205.9M 195.7M

Top 20 Water Parks Worldwide +5.4% 25.0M 23.7M

Top 20 North American Theme Parks +3.6% 131.5M 127.0M

Top 10 Latin American Theme Parks +2.6% 13.2M 12.9M

Top 20 Asian-Pacific Theme Parks +5.8% 108.7M 103.2M

Top 20 European Theme Parks -0.3% 58.0M 58.2M

Top 20 North American Water Parks +2.2% 15.4M 15.1M

Top 15 Asian-Pacific Water Parks +7.4% 16.0M 14.9M

Top 20 Museums Worldwide 98.5M

Top 20 Museums in North America 57.0M

Top 20 Museums in Asia-Pacific 41.6M

Top 20 Museums in Europe 71.5M

Source: TEA/AECOM 2012 Global Attendance

Destination vs Regional Park Performance

2.8%

4.6%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

Destination Parks Regional Parks

$83.26 $57.70

Source: TEA/AECOM 2012 Global Attendance; H2R Market Research

2013 figures

will not be out

until June

2014.

But, early

indicators are

strong.

2013 YTD Snap Shot: Attendance Trends at

Attractions I’m Working With This Year

-5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0%

Water Parks

Aquariums/Zoos

Excursions/Sightseeing

Shows/Theaters

Theme/Amusement Parks

State/National Parks

2013 YTD Snap Shot: Performance Trends

at Attractions I’m Working With This Year

1.6%

0.4%

0.0%

0.5%

1.0%

1.5%

2.0%

Urban Attractions Rural Attractions

Source:H2R Market Research

As the industry

regains traction,

emerging trends

become a focal

point again.

TR

EN

DS

9 EMERGING GLOBAL

ATTRACTION TRENDS

1. Reinvestment.2. Blurred Lines.3. Architectural Facelifts.4. Optimizing the GX.5. Entertaining Queue Lines.6. Demographics7. VIP Experiences.8. Technology.9. Leveraging Guest Information.

It takes money to make money.

TR

EN

D 1

REINVESTMENT

Great Recession is in

the rearview mirror.

Attractions worldwide have entered the Post-Harry Potter Era now.

Rijksmuseum Natural History Museum MD Science Center

New capital is not just delivering more of the same.

BLURRED LINEST

RE

ND

2

• Experiences are

becoming deeper,

more enhanced-

and blurred.

• Zoos are adding rides.• Theme parks are

adding animals.• Museums are adding 4D movie experiences.

• .

EXPERIENTIAL

DESIGN

Designing environments with a focus placed on the quality

of the user experience.

UNIVERSAL

DESIGN

Broad spectrum of ideas meant to manage environments that are

accessible to older adults and people with and without

disabilities.

MORE INTRICATE

STORYLINES

Obscure characters & detailed storylines are popping up more places as attractions seek to become more relevant to kids in the age of video games, smartphones &

3D TVs.

TR

EN

D 3

ARCHITECTURAL FACELIFTS

Some capital is just surface deep.

McDonalds $ 1 Billion makeover.

Attractions soon joined in.

Even those with iconic facades have upgraded.

Bigger, Better and More Eye Catching

The product is not the only focus.Attractions are more guest-centric.

OPTIMIZING THE GX

TR

EN

D 4

• The experience is becoming the marketing.

• But, “good” is not good enough. Must be share worthy.

• Retention is

the new

acquisition.

Traditional marketing

is dying

Source: Purple GoldFish, Stan Phelps

• Pain points

negatively impact

the guest

experience.

• Biggest pain points across industry are:• Rude or indifferent

employees• Dirty restrooms• Rides/exhibits not

operational• Overly aggressive tour

guides/sales people• Long lines/waitsSource: PGAV Destinology; H2R Market Research

Test before you

invest.

• New product concept testing is the norm.

• Enlist consumer input before ideation, during concept vetting and in the selection process.

Attractions have begun taking one of guests’ biggest pain points seriously.

ENTERTAINING QUEUE LINEST

RE

ND

5

• Queue lines at U.S. attractions are getting longer.

• Some are

investing big

money to

make wait

time less

boring, more

comfortable.

Fact is, guests

expect lines.

• They just want to know management is doing everything they can to alleviate the situation.

DEMOGRAPHICS

TR

EN

D 6

A sea change is upon us that is going to impact every attraction.

Changing faces.

• Older.• More Diverse.• Fewer Family HHs.

• More Multi-generational HH Trips.

• More Travelers, Fewer Locals in 2013.

• Higher Incomes.

Source: U.S. Census Bureau; H2R Market Research

Millennials

• Younger Millennialsare changing the game.• Lower incidence at

theme parks & other attractions.

• Connection is key.• Older Millennials who

are marrying, having kids are converting.

• Long-term prognosis is positive.

• Bulk of

visitors are

middle class.

• But, there’s been a shift toward providing those with money even more ...

• Innovative,

unique and

luxurious

experiences.

VIP EXPERIENCES

TR

EN

D 7

Wealthier visitors have the money and desire for upscale

experiences.

Splurge travel is back to

pre-recession levels.

• But, the inspiration is different this time.

• More about stressreduction & control.

• Less about personal enrichment.

• Recent data suggests the trends will only grow larger.

Source: PGAV Destinology, H2R Market Research

VIP Tours

• Tour Guide Facilitates Entire Visit• Exclusive front-of-the-line ride

access• Priority parking• VIP admission & badge• 2 complimentary on-ride photos• Lunch or Dinner• Unlimited Soft Drinks• Priority live show seating

Lujan ZooArgentina

(US $84 pp)

Museum VIP Tours

Europe(Starting at

$332 pp)

NAQ Penguin

EncounterCincinnati($25 pp)

American Museum of

Natural HistoryNew York

($500 for up to 5 people)San Diego Zoo

San Diego($599 for up to 5 hours)

TECHNOLOGY

TR

EN

D 8

Influencing both front stage & back stage consumer environments.

Fundamental shift

in human behavior.

Experience used to exist only in the moment...

now lives along a timeline.

Broadcasting life experiences is a form of social expression,

conversation & status

among friends

Source: WhiteHutchinson.com, Randy White

Dynamic Pricing being

used to help optimize

revenue management

• Variable pricing by season, week of month or day of week.

• Make big days bigger revenue days

• Day-part pricing• Higher prices as

new products are introduced

• Guest segmentation & targeting.

Source: Magellan Strategy Group, Chris Cavanaugh

Digital elite

account for 34% of

travelers.

• Digital elite are those with smartphones & tablets-the number has tripled since 2011.

• Far more engaged in smartphone activities, e.g. find an attraction, navigation, monitor latest info, etc.

Source: MMGY Digital Traveler, Harrison Group

Technology is also impacting the GX

• Abraham Lincoln Presidential Library & Museum.

• Ghosts in the Library. Dramatic & magical special effects using Hologram technology.

• Union Theater- multi-venue special effects.”

• Live Performances

High Museum of Art:

ArtClix!

• Explore art from Picasso to Warhol on your High Museum’s Smartphone app, ArtClix!

• Integration of photo-recognition and social media -total interactive experience.

• Snap images of artwork to access text and audio.

• Create personalized post cards to share with friends.

• Engage with museum staff about the exhibition.

LEVERAGING GUEST INFOT

RE

ND

9

Leveraging guest insight & personal information to provide better experiences.

Disney’s $1 Billion+ MyMagic Program

• MagicBands are rubber bracelets that are:

• All-in-one theme park tickets

• Room Keys• Credit Cards• FastPass+• RFID sensors

trigger unique moments at attractions.

• Spend larger share of wallet at Disney, • Spur incremental spending on-park, and • Cull far more personal data about its

guests to enable it to customize more sales offers.

Source: Orlando Sentinel, 8.23.13

Not Just Disney.

Big Data is Revolutionizing Business.

• The NSA is not the only one recording your every move.

• Big business tracks your every move, keystroke, transaction, etc.

VOC Programs

are using many new tools to

dig deeper.

• Online triads/quads

• Online bulletin boards

• Online video diaries

• Social listening

Net Promoter Score

• Measure of customer happiness.

• Subtract brand detractors (0-6) from promoters (9-10) to get a net score.

• NPS is one of the only KPI’s you need to track.

• It correlates closely with corporate growth rates.

Source: Fred Reichfield

The aggregate attractions industry has a

Net Promoter Score of 43%.

49%

45%

6%

Promoters (9-10) Neutral (7-8) Detractors (0-6)

NPS:

43%

75%63%

60%57%57%

53%50%

47%45%44%43%42%40%

36%33%33%

26%9%

47%

PlanetariumWater Parks

Botanical GardenMuseums

State/national parkZoos

Art GalleriesTheme Parks

AquariumsSymphony/opera/concertSpecial events or festivals

Historic sitesScience CentersCasino/gaming

Old homes/mansionsFamily Entertainment…Major sporting events

Live music theaterOther

NPS by Consumer Segment

Source: PGAV Destinology, H2R Market Research

Looking to 2014:

Longer drive vacations

Continued growth of VIP experiences

Fresh, different wins the day

Greater focus on optimizing the GX

OU

TLO

OK

H2R Market Research

Attraction’s Industry Forecast

0.5%

0.9%0.7%

-0.7%

2.4%2.7%

3.0%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

2008 2009 2010 2011 2012 2013f 2014p

Annual Aggregate Variance

Source: H2R Market Research

Summary of Emerging Global

Attraction Industry Trends

1. Reinvestment2. Blurred Lines3. Architectural Facelifts4. Optimizing the GX5. Entertaining Queue Lines6. Demographics7. VIP Experiences8. Technology9. Leveraging Guest Information

Key Takeaways

1. Aggregate attraction industry performance is improving.

2. Changing demographics are causing a sea change.3. The composition of attraction experiences is evolving rapidly to provide more immersive, deeper

connections with guests. 4. The industry is becoming far more consumer-centric– optimizing the guest experience, minimizing

pain points & leveraging information.

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