June 2017 UK attractions sector / Amanda Jakes, PwC Responding to increasing customer expectations in the UK attractions sector www.pwc.com 2 UK Attractions Sector 2017 2017 UK Attractions Sector 3 How is the UK attractions sector responding to more informed consumers with ever increasing expectations? A recent PwC survey on consumer sentiment1 indicates that whilst 25% of British consumers expect to be better off in 2017, some Embracing 26% expect to be worse off. technology Consumers are becoming more demanding and as household budgetary pressures grow on leisure spend, they are becoming Responding to more selective as to where ever increasing they spend their cash. Heading customer expectations Across the attractions sector, there are signs that customers increasingly want by... innovative, immersive and interactive experiences which provide value for Broadening Evolving money. In addition, they are more tech-savvy and with instant access to the appeal the offer vast swathes of information at their fingertips, their expectations are rising. These are interesting times for attraction owners and operators. How are they responding to these trends in order to drive admissions and create sustainable business models? Are they embracing technology? How are they proactively identifying and targeting new customer bases? How are they evolving the We see three key inter-linking themes and through this short article, will explore visitor experience? each a bit further. 1 http://pwc.blogs.com/press_room/2017/01/consumer-sentiment-remains-positive-but-pressured-families-are-starting-to-feel-the-pinch.html 4 UK Attractions Sector 2017 How are attractions embracing technology? Technology also has a key role to play in Technology permeates enhancing the experience during a visit. throughout all aspects Large theme park groups have adopted of our everyday lives and wearable technology and cashless increasingly we take this systems (e.g. Disney MagicBand which for granted. Only encompasses entry ticket, fast pass, ride scheduling, dining, retail, hotel key and 29% However, one of the main challenges for even parking). Others are using it to attractions owners is deciding how best manage queues (e.g. Universal’s new to embrace technology and ensure any Tapu Tapu wristband for Volcano Bay investment is fit for purpose in a fast of visitor attractions have which allows you to join a virtual queue). evolving sector. Latest research by Visit online booking facility A number of attractions provide apps for England (2015 data) indicates that guests to download and use throughout around 93% of visitor attractions have Meeting expectations on customer their visit (e.g. Tate Britain) or podcasts websites but on average, only 29% have experience is a key focus for any attraction to supplement the experience (Bletchley an online booking facility. This masks a and technology’s role is increasing. Park). The most recent Theme Park range of take up rates across different Before a visit, guests are now spending Barometer research by Omnico types and sizes of attractions but even more time online researching, planning highlights future trends such as use of for larger, more commercial attractions and booking trips and ONS statistics robots as assistants and guides, electronic such as theme parks, some three out of indicate around 3 out of 4 adults access tattoos replacing tickets and smart ten websites don’t offer online booking. the internet ‘on the go’ (and 70% of this mobility scooters. is done via mobile phones). The speed of Of course, the visitor experience doesn’t page loading and number of pages also finish when people physically leave the significantly influences bookings (retail venue. Postings on social media are research by Eventbrite suggests some again part of everyday life for certain 40% of shoppers abandon a transaction age groups with around 90% of all if the page takes longer than 3 seconds adults under 35 and over 50% of adults to load). aged 35-64 using social media on a 93% regular basis. of visitor attractions have websites 90% of adults under 35 use social media on a regular basis 2017 UK Attractions Sector 5 Another aspect is how technology is Finally, technology has a role to play However, it also brings challenges such being incorporated into content, rides from a business/corporate viewpoint as cost (initial implementation, staff and experiences within attractions. with PwC identifying the ‘Essential training, on-going maintenance), For example, The National Trust has Eight’ emerging technologies for UK consistency (e.g. confi dence that the partnered with Panasonic to create fi rms to focus on4. Almost regardless right platforms and technologies in more immersive experiences by bringing of the scale and nature of a business, place e.g. does mobile site look as good things to life through touch screens in technology has the ability to drive cost as tablet or laptop?), risk of things going some of its properties. ‘Ride’ technology effi ciencies throughout the business. It wrong (e.g. all or key elements of an has been prevalent in blockbuster roller could even change the business model. attraction breaking down) and security coasters for years but we are also now It also offers valuable insight into (risk of cyber fraud etc.). seeing new adaptations across a range of existing customer preferences and other attractions, e.g. new Forbidden habits, enabling the operator to tailor Forest at Warner Bros Studio Tour London and personalise experiences and target and smaller attractions where technology specifi c groups. is used to personalise an experience. The essential eight technologies Future trends may include using robots as entertainers and for shows or stunts. One of the key trends is the introduction Internet of things of virtual reality, which Merlin Entertainments has recently introduced at Thorpe Park with Derren Brown’s Robots Augmented reality Ghost Train and also at Madame Tussauds in New York. Industry research by Onmico revealed that globally, over 65% of guests want or expect virtual or augmented reality in theme parks within the next 2020 three years. These types of technology as well as variations such as mixed reality outlook and extended reality, offer opportunities Drones Virtual reality to create new experiences for guests and seek to develop new or existing partnerships in different ways (e.g. Universal and Nintendo). Indeed, we are already seeing virtual reality being more widely introduced across a number 3D printing Blockchain of more diverse sectors including healthcare, education and even retail.2 Furthermore, PwC forecasts consumer Artificial intelligence spend on the UK virtual reality sector As ever though, there is a constant challenge between needing to invest in the product will exceed £800m by 2021 refl ecting to drive admissions and investing in customer experience technology which is ever annual growth of 76% over the fi ve year evolving and moving quickly. Prioritising spend and striking a balance between period.3 quantitative elements (footfall) and qualitative elements (guest satisfaction) is very important 2 http://pwc.blogs.com/industry_perspectives/2017/04/will-virtual-reality-mean-virtual-retail.html 3 PwC’s 2017 UK Entertainment & Media Outlook 4 https://atpwc.co.uk/#/story/uk-leaders-increasing-investment-in-digital 6 UK Attractions Sector 2017 How are attractions broadening their appeal? .As existing attractions look Use of IP New partnerships to develop their offering, understanding project economics is key. How much The majority of the larger theme and In terms of broadening the appeal of will it cost to build or leisure parks across the UK now have an attraction, or tapping into new implement? How will this be license agreements or partnership markets, there are a number of funded? As visitor numbers arrangements with IP providers (e.g. interesting initiatives. The National Trust Paultons Park/Peppa Pig, Drayton has partnered with Sport England to grow or new markets are Manor/Thomas the Tank Engine, promote physical activity in open spaces; penetrated, how does the Blackpool Pleasure Beach/Nickelodeon, this can take the form of formalised operating model change? Alton Towers/CBeebies Land, Thorpe activities such as water sports or more Park/Angry Birds (games)/Saw (film)/ informal, such as park runs. The 30th Successful attractions need to keep Celebrity Get me Out of Here! (TV), Go Ape in the UK opened at Chessington reinvesting to stay relevant. In addition, Merlin midway attractions/Shrek and World of Adventures last summer and a they need to encourage repeat visitors more recently, Chessington/The Gruffalo). number of attractions are reaching new and broaden their offering to tap into Aardman Animations (the creators behind audiences through TV documentaries new markets in order to grow the Shaun the Sheep, Wallace and Gromit (e.g. Chester Zoo). More immersive and customer base. Against a backdrop of and Morph) have publicly stated their personalised experiences are being a more discerning guest who is looking ambition to further expand their IP into developed too. Both Portsmouth and for a memorable outing, many have more theme parks and the BBC are Chatham Dockyards have introduced chosen to address this by offering more opening a themed attraction in China ‘Escape Room’ experiences where guests immersive experiences whereas others using BBC Earth and Top Gear IPs. have to solve problems within fixed time are creating new partnerships which In November last year, Universal and periods before being ‘locked in’. bring something different. Nintendo announced an arrangement At London Zoo, as well as a chance to In many cases, attraction operators and that will see the characters, action and sleep next to lions, there is an interactive owners are turning to the Creative adventure of Nintendo video games adventure with guests helping forest Industries5 as part of their supply chain. brought to life within highly themed, rangers deal with a ‘lion-emergency’ This sector is estimated to be worth innovative environments across and lend a hand to the veterinary team nearly £88bn to the UK economy and Universal resorts. who come to the rescue. includes, amongst other things, So, attractions are broadening their intellectual property (IP) from film, appeal by directly investing in the product TV and gaming, as well as actors (i.e. incurring capital expenditure) but and performers. also through initiatives and partnerships which can be less capital intensive and easier to adapt to take advantage of changing trends. 5 http://www.pwc.co.uk/industries/entertainment-media/insights/imagi-nation.html 2017 UK Attractions Sector 7 8 UK Attractions Sector 2017 How are attractions evolving their offer? Competitive pressures One of the key competitors for aentttreartcatiionnmse ins ti nin-hcloumdein dgi gital P ress u r e from outside the sector gaming. This sector has seen D igital, gami n rapid growth in recent years g with 80% of UK adults watching an online TV/film service in 2015 and the video games market expected to see digital console game revenues New Products E (including online micro- x New themes i transactions) grow at 11% to s t Segmentation overtake the digital PC game in s sector in 20196. g nt p a l a tr As people spend more time on their y n digital devices, they seem to feel more ers w e e closely connected to the content and N ironically crave more live interaction ahnasd seuxpppeorrietendc ews.i dOevre trr erencdesn itn y tehaer sm tuhsiisc Pressure from within t h e s e ctor industry such as the major revival of tours and festivals, and video gaming/ e-sports – competitive computer gaming staged in front of live audiences – which However, significant opportunities The concept is a multi-activity centre as a sector is forecast to generate more exist for attractions to offer authentic encompassing zip wires, climbing walls than £1bn in global revenue and double and unique experiences that can’t be and trampolines. Another experienced its audience to 600 million by 2020 replicated elsewhere. As a result, existing operator, Merlin Entertainments, has according to the BBC7. attractions are facing increasing also recently submitted plans in Of course, we’ve also seen evidence in competition from within the sector as Birmingham for a brand new addition to the attractions sector with global theme well as from new entrants. its midway portfolio, currently referred park attendance rising by more than 5% to as Project Thor. Both an indoor and A number of veteran attractions owners in 20158. outdoor attraction, it will incorporate and operators with years of sector So, attractions face a number of challenges experience under their belts are skydiving and high ropes. relating to technology, a continued need introducing new products into the Commercial attractions also face increasing to reinvest in enhancing the visitor market; these are aimed at complementing competition from the ‘not for profit/ experience and competition from a their existing products but also offering museums’ sector who over recent years greater choice of in-home entertainment. something new or different. David Lloyd have had to become more commercially recently announced plans for a series of focused as public sector funding reduces. ‘Adventure Parks’ across the UK, with Many of these now offer ticketed the first of 20 due to open later this year. temporary exhibitions and events, again increasing the choice for the consumer. 6 http://www.pwc.co.uk/industries/entertainment-media/insights/entertainment-media-outlook.html 7 http://www.bbc.co.uk/sport/39119995 8 http://www.teaconnect.org/images/files/TEA_160_611852_160525.pdf 2017 UK Attractions Sector 9 Unsurprisingly there are a range of new The sector is also becoming more These include, for example, the Bombay entrants too, typically distinguished segmented by age with a more defined Sapphire Distillery in Hampshire (an either by theme or by segmenting the spectrum on offer. At one end of the attraction as opposed to just gin tasting) target market. One new theme we are spectrum, new experiences such as which won Gold in the VisitEngland starting to see is ‘Retailtainment’ which Kidzania are targeting the younger Visitor Attraction Awards for Excellence is the blending of mainstream retail and generations. The family market sits 2016 and the rapid expansion of horror entertainment experiences. Whilst firmly in the middle and is actively based pop up attractions around common in the USA (e.g. Mall of America being targeted by a new breed of indoor Halloween, many of which have which has multiple rides and attractions active entertainment centres; trampoline age restrictions. alongside shops), this concept is relatively parks are one of the fastest growing So, there are many issues, new embryonic in the UK. However, that leisure sub-sectors in the UK – they are technologies and competitive pressures might be about to change given the already morphing into broader family facing the attractions sector. However, recent joint initiative between Disney entertainment centres with ninja there are also real opportunities for those and Westfield with plans for themed courses and laser tag which provides who can offer innovative, immersive attractions within shopping centres as new competition for some of the larger and interactive experiences which are well as a Star Wars fashion campaign. established indoor activity centres unique and which provide value for And there are other examples too of historically offering ski slopes, climbing money. It will be interesting to see how retail IP and attractions combining – and other high adrenaline activities. individual attractions respond to more of course LEGO has been doing this for At the other end of the spectrum, there demanding consumers and how the years but new entrants are now emerging are more attractions focussing purely on sector evolves in the process. such as the Mattel Play! centre in Liverpool the adult market. which opened last year.