To what extent does location matter for a park to be successful?

[Matt N]

Hi guys. When building a master planned theme park, developers often talk about looking for the ideal location. They often try and justify their chosen location by talking about transport links, population within a 2 hour driving distance or whatever metric is important. But in your opinion, does location always matter to a theme park’s success? Or does the age old adage of “if you build it, they will come” apply in this case?

Personally, I feel that location is important to some extent, but is not the be all and end all of a park’s success.

If you take the UK as an example; 3 of the country’s 4 most visited parks are within close range of London, the country’s most populated city by some margin (London has 8.9 million residents, while the closest competitor, Birmingham, has 1.1 million). Thorpe Park and Legoland Windsor are rather close to London, while Chessington is actually in London (technically speaking). And if you look at some of the other notable parks in Britain, there does appear to be some correlation between population within a close radius and visitor numbers. Drayton Manor, one of the more highly visited non-Merlin parks in the country, is not too far from Birmingham, the second biggest city in the country. Oakwood, one of the country’s lesser visited notable parks, has quite a limited population within a close radius. If you look at those case studies as well as others, there does appear to be at least a partial correlation between close population and visitor numbers.

However, I don’t think that tells the whole story in itself. Because the UK does hold one key trump card up its sleeves that disproves this correlation somewhat; Alton Towers, the UK’s most visited park by some margin (nearly 500,000 according to Merlin’s 2019 graph). Now, Alton Towers is not poorly located by any means. It is within a 2 hour drive of 3 big population centres in Birmingham, Manchester and Liverpool. However, it’s not super close to (let’s say less than an hour’s drive from) any major cities, it’s quite far North (it’s certainly North Midlands, at very least), it’s in quite a rural area, and it’s over 3 hours away from London by car (at least 2.5 hours even from the most Northern boroughs, and over 3 hours from most of it). So in theory, it does not have what a theme park developer would refer to as an ideal location. However, it manages to be the most visited park in the UK by quite some margin, which I think does suggest that location isn’t necessarily the be all and end all of a park’s success, and that people are willing to travel if your product is strong enough.

But what are your thoughts? Do you think that location is everything to a park’s success? Or do you think that location plays no role at all?

 

[Disco Lumberjack]

I think 2 hours one way is close to the maximum most people will tend to venture for a day out, that does capture a significant portion of the country as you mentioned. Towers has an additional confounding factor though, which is that it's the only theme park resort in the UK that can reasonably claim that title. You can easily do 2-4 days there depending on your appetite for Splash Landings. I normally travel up, do a round of mini golf with my friends, then we have dinner and a few drinks, go to bed and then do 2 full park days before heading home.

 

[Christian]

I studied a term of anthropogeography at uni, with a focus on transport and logistics. That is a branch of geography that studies spatial relationships between human communities, cultures, economies, and their interactions with the environment. Basically how location of things interact with humans. This would be a very complicated question to fully answer, but I will try breaking down and simplifying it.

In a simple way I think we need to look at what location actually is. Usually the term location is split up into two parts, Absolute Location (the physical location of something) and Relative Location (location relative to other things).

Firstly, "successful" is a hard term to justify. A tiny funfair that has a wacky worm and a carrousel and makes a healthy profit for it's owner can be considered successful. A massive resort like Disney World can also be considered successful. For the funfair relative location is everything. The funfair by itself has almost no draw but if it is in a popular area people might still come. Absolute location is therefore not really that important for the funfair, relative is more important.

For a resort like Disneyworld that with an airport is able to create it's own draw, relative location is not as important as long as it is within a certain flight time from a large population. Relative location was important in the beginning when it was smaller but it isn't as important now when it has established itself. If you demolished it and build the same thing in Louisiana it probably would have the same draw. But it is highly unlikely that someone would ever be able to build something the size of today's DW from scratch.

For something the scale of DW absolute location actually becomes important. The climate and topography as well as legislatures become a lot more important and can be crucial in making the park successful or not. Very few would spend their Christmas at DW if it was in northern Wisconsin, the climate is just too bad. I am not saying that a good relative location is unnecessary for Disney World, but it is a lot less relevant than for the tiny funfair. That is because DW has something called organic draw. Basically, it's ability to by itself attract people, regardless of what's around it (relative location).

Even though having a good relative location is usually a great thing, it can also become a menace. Parks such as California Great America will be shut down due to it's relative location being too good. The land has simply become too valuable (because it is a great relative location) to operate a park there. This can be shown using a DuPont analysis. In a very simplified way this analysis results in Asset Turnover x Profit Margin = Return on Equity (ROE). If the land is too valuable compared to the profits made from that business using the land, then it no longer worth it to run that business. It would just be more profitable to sell off the land and take the money. Themeparks in themselves don't really have a high income per sqm compared to other businesses therefore land value is also an important factor when evaluation location in relationship to making the theme park successful.

To conclude (taking the availability of an airport, roads, railways station, etc as granted). Organic draw is directly dependent on invested capital and an absolute location with favourable conditions. The importance of relative locations can inversely correlate with the organic draw the park is able to achieve. Strength of relative and absolute location of a park can inversely correlate for parks with high organic draw but don't necessarily have to. A too good relative location will drastically increase land value, thereby making the theme park unviable in that location.

So, yes, a theme park's success is always dependent on the strenght of the location. Whether it is relative or absolute location, or a combination of both.

 

[Hyde]

Location is arguably the most important factor for a park's success. There are only a handful of parks that buck this trend, as historically parks have been/must be located next to large population areas to garner business success.

Historically, especially in the U.S., location matters, even more, as many parks were purposely located at the end of trolley lines to give a point attraction and reason for bolstering ridership further out on lines. And many of our older, historic parks began as humble picnic grove or hotel destinations - again reliant on co-location with other points of draw.

 

[Chhow]

In my opinion, location affects the success of any business, including theme parks. The fact is that each niche has its own client, and the location in the city does not guarantee that such a place will be the most popular.
I think that for many people going to theme parks is not something ordinary. People come there for most of the day in order to have time to get the maximum experience. For me, a trip to an interesting place is one of the most enjoyable parts of my day off. There is a feeling that you left the usual place and ended up in a special place. In addition, entertainment practices are usually noisy.