Archive for December, 2016

America’s Amusement Parks

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The U.S. amusement parks and arcades industry includes about 3,400 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $15 billion. Amusement parks account for about 15 percent of the establishments and about 90 percent of the revenue; arcades account for about 85 percent of the establishments and about 10 percent of the revenue. Demand and business activity is highly dependent on consumer spending – since amusement parks and family fun centers are relatively expensive entertainment and the number of customers declines during economic downturns. With high fixed-costs, even a small drop in attendance can have major financial consequences.

The profitability of individual companies depends on good marketing. Large companies can more easily build expensive rides and have economies of scale in operations and advertising. Smaller companies can compete by serving smaller markets or offering special rides. The U.S. industry is highly concentrated: the 50 largest companies generate about 85 percent of revenue.