European Amusement and Theme Park Industry: An Assessment of Economic Impact Prepared for IAAPA Europe Submitted by D & J International Consulting & Morisetti Associates February 2014 D & J Project No. 1305 Table of Contents 1 Executive Summary ............................................................................................................... 1 2 Introduction ............................................................................................................................. 2 3 Methodology, Definitions and Assumptions ....................................................................... 3 Introduction ............................................................................................................................... 3 Parks Methodology ................................................................................................................... 3 Theme or Amusement Park ..................................................................................................... 3 Attendance ................................................................................................................................ 4 Revenues .................................................................................................................................. 4 Marketing Expenditure.............................................................................................................. 6 Employment .............................................................................................................................. 6 Capital Expenditure .................................................................................................................. 6 Direct Economic Impact............................................................................................................ 7 Indirect and Induced Economic Impact .................................................................................... 7 Multipliers .................................................................................................................................. 7 Fiscal Impact ............................................................................................................................. 8 Water Parks, FECs, Science Centres & Wildlife Attractions .................................................... 8 Currency ................................................................................................................................... 9 4 Country Overview ................................................................................................................. 10 Europe .................................................................................................................................... 11 Austria ..................................................................................................................................... 12 Belgium ................................................................................................................................... 13 Denmark ................................................................................................................................. 14 Finland .................................................................................................................................... 15 France ..................................................................................................................................... 16 Germany ................................................................................................................................. 17 Greece .................................................................................................................................... 18 Italy ......................................................................................................................................... 19 Netherlands ............................................................................................................................ 20 Norway .................................................................................................................................... 21 Portugal .................................................................................................................................. 22 Spain ....................................................................................................................................... 23 Sweden ................................................................................................................................... 24 Switzerland ............................................................................................................................. 25 United Kingdom ...................................................................................................................... 26 European Water Parks ........................................................................................................... 27 European FECs ...................................................................................................................... 28 European Science Centres .................................................................................................... 29 European Wildlife Attractions ................................................................................................. 30 5 Theme Park Assessment Appendices ............................................................................... 31 D & J International Consulting General & Limiting Conditions The Report and the information within it is confidential and may be privileged. 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D & J International Consulting’s copyright notice and disclaimer must in all cases remain intact. 1 Executive Summary 1.1 D & J International Consulting and Morisetti Associates were commissioned by IAAPA Europe to conduct an assessment of the economic impact of theme & amusement parks, water parks, family entertainment centres, science centres and wildlife attractions in Europe. 1.2 In total, admissions to the five categories of attractions drew 460 million guests, generated 9€ .3 billion revenues and employed 115,500 people i n 2012. The economic impact across Europe was over €19.2 billion and almost 238,500 pe ople were employed in attractions and related businesses as shown in Figure 1.1. Figure 1.1: European Attraction Industry Impacts, 2012 Countries Direct Impact Total Economic Impact No. of Attendance Revenues FTE jobs Value FTE Jobs Attractions (mill) (€ mill) (€ mill) Theme & Amusement Parks 307 149.5 4,883.00 53,103 10,023.2 109,004 Water Parks 188 76.4 848.9 17,266 1,760.2 35,802 FECs 1,116 49.1 308.4 5,927 639.5 12,290 Science Centres 187 42.7 950.6 10,825 1,971.1 22,446 Wildlife Attractions 321 142.6 2,331.10 28,387 4,833.6 58,861 Total 2,119 460.3 9,322 115,508 19,227.6 238,403 Source: Individual attraction, D & J International Consulting and Morisetti Associates 1.3 The European total impact figures are greater than the sum of the individual country impacts as the area of impact is greater when considering on a Europe-wide basis. D & J International Consulting Project No. 1305 Page 1 2 Introduction 2.1 D & J International Consulting and Morisetti Associates were commissioned by IAAPA Europe to conduct an assessment of the economic impact of the theme and amusement park industry in Europe. 2.2 The assessment provides estimates of economic impact based on a sample of attractions, previous studies and other published data. The methodology used is consistent with IAAPA Europe’s 2009 report on the economic impact of the theme and amusement park industry in Europe. 2.3 The output of the study provides estimates of the scale of visits, revenue, employees and marketing expenditure across the 17 member states of the European Union that have theme and amusement parks and Norway and Switzerland, together with estimates of the direct, indirect and induced economic impact of the attractions. The output does not include estimates of the off-site economic impact of visitors to theme and amusement parks. 2.4 The study also examines, on a broader scale, the size and economic impact of European water parks, FECs, science centres and wildlife attractions. 2.5 This report has been prepared by David Camp and Julie Vile, Partners of D & J Consulting, Lesley Morisetti, Director of Morisetti Associates, and Jonathan Lonie of J. Lonie Consulting. D & J International Consulting Project No. 1305 Page 2 3 Methodology, Definitions and Assumptions Introduction 3.1 In this section, D & J International Consulting and Morisetti Associates outline the methodology, definitions and assumptions for the assessment of the economic impact of the European theme and amusement park industry. The report covers the estimated economic impact of 307 theme and amusement parks across 19 countries. All figures in this assessment are in 2012 values. We also discuss the research methodology for the assessment of water parks, FECs, science centres and wildlife attractions. Parks Methodology 3.2 D & J International Consulting and Morisetti Associates, in consultation with IAAPA Europe, shortlisted a range of European attraction groups and individual large and small theme and amusement parks across the studied countries with the aim of benchmarking a representation across a range of types of parks and the main geographies. Each of these companies was requested to complete a questionnaire for the study, and we have analysed their response data to build a sample. 3.3 The resultant sample includes 40 theme and amusement parks across 11 countries. Disneyland Resort Paris, Merlin Entertainments, Compagnie Des Alpes, Plopsa Group and Crealy Great Adventure Parks submitted combined information for their parks. Appendix A lists the theme and amusement parks that participated in the assessment. We will refer to these 40 theme and amusement parks as the base sample for this assessment. All figures provided by the base sample refer to the 2012 operating year. 3.4 From the base sample as well as published data and previous studies, D & J International Consulting and Morisetti Associates determined ratios for performance for each category of theme park or amusement park and applied these ratios to estimate the economic impact of the remaining theme and amusement parks. We will refer to the remaining 267 theme and amusement parks as the estimated sample for this assessment. 3.5 D & J International Consulting and Morisetti Associates reviewed the economic impact of the theme and amusement park industry for each country separately as well as for Europe as a whole. Section Three sets out the full list of the countries reviewed. Theme or Amusement Park 3.6 A theme or amusement park is defined as a leisure facility with at least one fixed ride. Based on this definition, we have determined in conjunction with IAAPA Europe that the European leisure market includes 307 theme and amusement parks. 3.7 From the base sample, it is clear that the operating characteristics of theme and amusement parks vary significantly depending on the scale of operation and therefore D & J International Consulting and Morisetti Associates separated the data collected from the base sample parks into five categories based on attendance and pricing structure in order to provide the best estimates of economic impact across all park types. (cid:1) Large Theme Parks: theme parks with over one million visitors (cid:1) Medium Theme Parks: theme parks with between 250,000 and one million visitors (cid:1) Small Theme Parks: theme parks with under 250,000 visitors D & J International Consulting Project No. 1305 Page 3 (cid:1) Large Amusement Parks: parks with a pay-as-you-go pricing structure that attract over 500,000 visitors (cid:1) Small Amusement Parks: parks with a pay-as-you-go pricing structure that attract under 500,000 visitors 3.8 The base sample includes 18 large theme parks, 12 medium theme parks, 2 small theme parks, 7 large amusement parks and 1 small amusement park, as shown in Appendix A. Attendance 3.9 Attendance is the total number of visitors to a park in one year. For theme parks which are pay-one-price attractions, attendance is based on tickets issued. For amusement parks which are free to enter pay-as-you-go attractions, attendance is typically estimated by manually counting visitors at the entry gate or based upon car parking. 3.10 Attendance levels for each park were either provided by the individual park or estimated by IAAPA Europe based on available statistics. Total attendance by country and for Europe as a whole is set out in Appendix B. Revenues 3.11 Visitor revenues are generated through admissions (tickets) and secondary in park spend including food and beverage sales, retail sales, and other spend (parking, lockers, games, etc). For parks with a hotel or other forms of accommodation and/or second-gate attractions, this represents an additional source of visitor revenues. Revenue can also be generated from non-visitor activities such as corporate sponsorship, corporate events, conferencing and other private venue hire. 3.12 Revenue figures were collected for the base sample of 40 parks submitting data. Based on these figures, average ratios were calculated in order to project revenues for the estimated sample. In Figure 3.1 we set out the resultant assumptions for each category of theme or amusement park. Figure 3.1: Revenue Break-Down Admission Secondary Non-Visitor as % of Spend as as % of Admission total % of total total Yield revenue revenue revenue Total (%) (%) (%) (%) (%) Large Theme Parks 50 55 42 3 100 Medium Theme Parks 60 55 40 5 100 Small Theme Parks 60 55 40 5 100 Large Amusement Parks 45 50 45 5 100 Small Amusement Parks 35 80 15 5 100 Source: D & J International Consulting & Morisetti Associates 3.13 The admission yield measures the ratio of net per capita expenditures on admission to the full adult admission price net of sales taxes. The yield is affected by the level of discounting given D & J International Consulting Project No. 1305 Page 4 to children, school groups or tour groups, in addition to promotional discounts used to market the park. 3.14 For amusement parks which are typically pay-as-you-go, the yield was estimated against the day-pass options typically offered at such parks. The resultant yields take into account that a large proportion of visitors do not purchase a day pass and may only go on one or two rides. 3.15 To determine admission revenue for each park in the estimated sample, D & J International Consulting and Morisetti Associates applied the admission yield percentage to the lead admission price net of VAT and then multiplied that figure by the estimated annual attendance for the park. 3.16 Based on the base sample, D & J International Consulting and Morisetti Associates estimate that the percentage of admission revenue to total revenue is typically around 55 percent at theme parks. The larger urban amusement parks have a strong food and beverage focus and therefore admission as a percentage is lower at 50 percent and secondary spend is higher at 45 percent. Small amusement parks typically offer little in terms of dining and retail options and have short lengths of stay and therefore the majority of income is generated through ride tickets. Based on these findings, D & J International Consulting and Morisetti Associates determined total revenues for the estimated sample by dividing their admission revenues, determined through admission yield ratios, by the ratio of admission revenue to total revenue. 3.17 Non-visitor revenue at theme parks is typically three to five percent of total revenues and is mostly generated through events and corporate sponsorship. 3.18 D & J International Consulting and Morisetti Associates also considered hotel revenues for the 47 on-site hotels operated by the amusement and theme parks reviewed. Revenues for these properties were determined from the base sample as well as published data and previous studies. Where information was not available, D & J International Consulting and Morisetti Associates applied appropriate ratios from the base sample to estimate revenues. 3.19 The majority of revenues for on-site accommodation at theme and amusement parks are generated by hotels. An increasing number of sites also include other forms of on-site accommodation including camp sites and holiday villages; however income from these is not expected to as substantial and has not been included at this stage of assessment. 3.20 D & J International Consulting and Morisetti Associates has assumed that all revenues generated by theme and amusement parks are a direct economic impact to the country in which they are located and therefore the direct economic impact of Europe as a whole is the summation of the direct economic impacts of each individual country. 3.21 Total estimated revenues by country and for Europe as a whole are set out in Appendix B. Off-Site Spending 3.22 In addition to spending on-site, theme and amusement park visitors generate a significant level of off-site spending in the local area and on their journey to the attraction. These expenditures can include accommodation, food and beverage and petrol among others. Theme and amusement parks that attract a high level of domestic and international tourist visitation would have a more significant economic impact on their surrounding areas compared to parks that mostly attract day-tripping residents. D & J International Consulting Project No. 1305 Page 5 3.23 The impact of off-site spending has not been calculated for this report, however, it is important to note that this impact can be substantial. For example, previous studies indicate that within the UK off-site expenditure can equate to 81 percent of on-site expenditure. Marketing Expenditure 3.24 In addition to expenditure on other goods and services, theme and amusement parks spend substantial amounts on marketing, the impact of which is included in the assessment of indirect and induced economic impact set out below. 3.25 Based on analysis of the data provided by the base sample, D & J International Consulting and Morisetti Associates have estimated marketing expenditure per park by assuming that at large theme and amusement parks marketing will equate to 5 percent of revenues, at medium theme parks marketing will equate to 6 percent of revenues, and for small theme parks and small amusement parks, marketing will equate to 8 percent and 7 percent of revenues respectively. 3.26 Estimates for marketing expenditure by country and for Europe as a whole, and marketing expenditure as a percentage of total country revenue and total Europe revenue are set out in Appendix C. Employment 3.27 Employment can be measured in terms of people or in monetary terms. We have looked at the number of people employed as Full Time Equivalents (FTEs) and we have looked at employment costs, including direct wages, benefits and other on-costs. Total estimates for FTEs and employment costs by country and for Europe as a whole are set out in Appendix D. 3.28 Based on the findings from the base sample, D & J International Consulting and Morisetti Associates estimated the number of FTE (full-time equivalent) staff per park by assuming 3,500 visitors per FTE (full-time equivalent) staff member for the large and small theme parks, 4,000 visitors per FTE for medium theme parks and 4,000 visitors per FTE for large and small amusement parks. 3.29 Based on the base sample, D & J International Consulting and Morisetti Associates has assumed that wages account for 26 percent of large theme park revenues, 27 percent of medium theme park revenues, 32 percent of small theme park revenues and 30 percent of revenues for amusement parks. D & J International Consulting and Morisetti Associates have assumed that all staff are employed from within the country where the park is located and therefore all wages are an indirect economic benefit to that country. 3.30 D & J International Consulting and Morisetti Associates have not considered the indirect employment impact, (ie additional jobs created in supplier firms, for example, people hired to make more toys due to increased toy demand generated by the park) for the theme and amusement park industry in this report. Capital Expenditure 3.31 We have analysed parks’ capital expenditure (capex), which could include construction, rides or other major purchases. For the estimated sample, D & J International Consulting and Morisetti Associates have assumed that capital expenditures for parks equate to 12 percent of total park revenues and for parks with on-site hotels, capital expenditure on hotel development equates to 5 percent of hotel revenues. The estimated capex expenditures by country and for Europe as a whole are set out in Appendix E. D & J International Consulting Project No. 1305 Page 6 3.32 We have included capex within the park’s home country for the country summaries, and within Europe for the European summary. We have excluded all capex estimated to have been spent outside Europe. 3.33 In order to estimate the location of capex spending, D & J International Consulting and Morisetti Associates assumed that 90 percent of total capex would be spent within a country that has a significant ride manufacturing industry, 80 percent would be spent within a country that has a small ride manufacturing industry and 70 percent would be spent in a country with no ride manufacturing industry. While the majority of European theme and amusement parks purchase rides and services from within Europe, some rides are purchased from other continents and D & J International Consulting and Morisetti Associates has therefore assumed that five percent of the total capex per park is spent outside of Europe. Direct Economic Impact 3.34 The direct economic impact of a theme or amusement park includes revenues generated by the park from park visitors and other on-site spending. Other direct monetary impacts which are not included in this study are the expenditure by theme and amusement park visitors outside the park, but directly caused by their visit to the park, such as transportation. 3.35 The direct employment impact equates to the number of employees (typically measured as FTEs) of the park itself. Indirect and Induced Economic Impact 3.36 The indirect economic impact is the expenditure by the park on employment, goods and services and capital expenditure and the secondary effect of these direct expenditures on suppliers. This includes, for example, a toy manufacturer purchasing more plastic to make the toys that are sold in the park’s retail outlets. 3.37 The induced economic impacts are secondary effects in the economy due to the wages earned by employees. For example, an employee who uses their wages to purchase goods at a supermarket within the country. 3.38 For this assessment, we have used type II multipliers which measure the combined indirect and induced economic impacts. 3.39 The indirect and induced economic impact for Europe will be greater than the summation of the indirect and induced impacts of all the individual countries as a certain level of expenditure that is not spent within a country and is thus not counted as an indirect economic impact for that country, may be spent in another European country and therefore would reflect as a positive impact to Europe as a whole. 3.40 While D & J International Consulting and Morisetti Associates has provided estimated figures for marketing expenditure, wages and capital expenditure in the country summaries based on ratios determined from the base sample, however these expenditures are also accounted for in the total indirect and induced economic impact determined through multipliers shown in Appendix F. Multipliers 3.41 A gross type II multiplier indicates the level of indirect and induced economic impact generated by the direct economic impact. For example, a gross type II multiplier of 1.5 indicates that every 1€ of direct economic impact g enerates another 0€ .50 indirect and D & J International Consulting Project No. 1305 Page 7