What's new

Coronavirus: Economic impact on theme parks in 2020.

i305_zack

New Member
If I am correct then I know that more people live in China than in the US. If China is already opening their parks back up and it has been less then two months, then I would expect the US to follow, you all look at the negatives with this and if that is you, please stop. It gets annoying and if I am wrong which I don’t feel like I will be, then you guys can tell me so
 

Pokemaniac

Mountain monkey
Staff member
Administrator
Moderator
If there is a miracle vaccine 🙏 by the summer and parks can re-open safely and even if it is quite late in the season there might be appetite from the public to go to theme parks even when it is quite cold in November / December completely shifting the season I reckon.
The thing with vaccines is that it's in concept fairly quick to throw them together. I heard somebody in the field say it takes about two weeks to make a simple vaccine if you've got the virus isolated. The problem is testing and validating the vaccine. Both figuring out if it's safe for use and whether it's effective, but also in what doses to administer it, figuring out the potential side effects/complications, and determining which groups it would be safe for. You really don't want to rush out something that causes birth defects or things like that (or if it does, at least you should document it so pregnant women can be advised not to take it). The trial patients need to be followed up for a long time to see if there are any long-time complications as well, so this is not a process that can be shortened by any meaningful length of time.

So yeah, the two weeks of lab work and chemistry need to be followed up by at least a year of trials. Even if by some outstanding chance they figured out the exact recipe for a perfectly working vaccine on their first try back in February, ensuring that it is working perfectly and determining its correct usage would still take a 1-1.5 years. Only then could they start manufacturing it in large quantities and ship it out, first and foremost to essential healthcare personnel, at-risk groups, other essential personnel, and only then would it be available to the broader public. That may still be two years away.

On the bright side, however, finding a treatment for the worst complications of the virus might not take as long. There's a decent chance that some drugs that are already FDA-approved as safe for use could be effective against the virus. What makes SARS-CoV-2 so dangerous is that it spreads quickly, the population doesn't have immunity against it, and there is no treatment. That first bit is why we're in lockdown, the second bit is what a vaccine hopes to address, but if the third bit can be addressed, the first two wouldn't be as critical anymore. Maybe then the lockdown could be eased and the parks could reopen. But I wouldn't bet on it happening at least until summer.
 

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
Cedar Fair put out blanket statements across their parks, hoping for mid-May opening. (Pending ability for folks to travel and parks to reopen)


To give a read on the ground, many states in the U.S. (Ohio passing order today)are implementing shelter in place orders, forbidding any non-essential travel. Most of these orders are targeted at a mid-to-late April expiration, which we are hoped to begin the backend of the infection curve.

TL;DR we are still on the upswing, so keep staying safe all. 😊
 

Matt N

Well-Known Member
On the bright side, however, finding a treatment for the worst complications of the virus might not take as long. There's a decent chance that some drugs that are already FDA-approved as safe for use could be effective against the virus. What makes SARS-CoV-2 so dangerous is that it spreads quickly, the population doesn't have immunity against it, and there is no treatment. That first bit is why we're in lockdown, the second bit is what a vaccine hopes to address, but if the third bit can be addressed, the first two wouldn't be as critical anymore. Maybe then the lockdown could be eased and the parks could reopen. But I wouldn't bet on it happening at least until summer.
I did actually read somewhere that some doctor in India had found a combination of pre-existing drugs that was apparently very effective at treating coronavirus, so I think that what you've just described may be happening to some degree already.
 

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
Tangential: Live stream video of the Santa Monica Pier

 

Matt N

Well-Known Member
I've been thinking; there's something that might be worth thinking about once all this has blown over. I'm hopeful that the economic impact won't end up being too bad in the long term (if we can keep it to not much worse than something like the 2008 financial crisis or 9/11, then I'd say we'll be OK), but I thought that it might be a point worth discussing.

With regards to the long term economic impact that coronavirus will have on the parks; if the parks are shut for a very long time, or if the recession everyone's worried about turns out very, very badly; do we think that 2022 and the years following could potentially be the first years in at least 50 years where no new major rides are built worldwide? I exclude 2021 because I'm assuming that 2021 additions were mostly finalised before all this happened, but could we see 2022 and the years following be completely devoid of worldwide ride investment?

I think we should watch and see how long the parks are closed for and how profound the economic impact of the pandemic ends up being, but my personal guess is currently no. Investment is ultimately what keeps people coming back to the parks, and if the parks are able to open back up in the summer, then a good Q3 & Q4 could potentially offset some of the losses made in Q1 & Q2, which would up the parks' cash flow and therefore free up money for things like ride investment. At worst, I could see a reduction in the number of rides built worldwide, maybe to the sort of levels seen in the 2000s as opposed to the 2010s, but I don't see investment completely drying up worldwide.
 

Hixee

Flojector
Staff member
Administrator
Moderator
Social Media Team
(if we can keep it to not much worse than something like the 2008 financial crisis [...], then I'd say we'll be OK)
Oh yeah, the biggest global recession for nearly three decades and the largest since the end of WWII which had shock wave effects throughout the next decade. That was okay. :p
(I do appreciate you were only like 6 in 2008, so may not have really felt what it was like. Heck, I was in late teens so didn't have it anything like as bad as some people).

We'll muddle through, but the effects of this in 2020 and beyond are going to be significant. My hope is that the markets can look ahead and see through this. Construction projects set for 2022 probably 'know' that things will have cleared by then and so won't need to be totally stopped. The issue is likely more around the funding/borrowing aspect for new coasters with parks projections for 2020 being impacted so badly.

I'm no economist (or virologist), so hesitate to comment much further...
 

spicy

Active Member
At worst, I could see a reduction in the number of rides built worldwide, maybe to the sort of levels seen in the 2000s as opposed to the 2010s, but I don't see investment completely drying up worldwide.
In completely basic terms. This is going to it a lot of people hard financially. We are going to see substantial job losses across the world, therefore many people won't have the funds available for days out to theme parks, so attendances will suffer and we won't see any major investments in parks for a very long time.

I just hope we don't see any major projects like the one planned at Disneyland Paris studios completely cancelled. I think the European Disney + launch should help them a lot during this tough period while the parks are closed though.
 

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
Since many of these larger projects are multi-year efforts (the standard B&M for instance takes 3-4 years of planning and work), and recognizing Covid is a temporary distortion in the market, I would expect them to proceed regardless. Only caveat would be other market factors, such as Six Flags teetering on bankruptcy again, which can scuttle those types of projects.

TL;DR We know this is going to impact the tourism industry for the next few months, but noone is projecting a fundamental multi-year shift in markets or behavior.
 

Matt N

Well-Known Member
I did also have another thought; I don't know what other countries are doing, but the UK government has announced a raft of new measures to help businesses in sectors directly affected by the crisis (e.g. the airline industry, the tourism industry). So my thought is;
A) Would theme parks fall under the government definition of "directly affected by the crisis"
B) Could any government funding potentially offset the parks' losses during closure?

I'd also imagine that the parks have an insurance policy in place that covers this sort of event; the parks can't help the outbreak of a deadly virus.

As for people being hit financially; this is of course very true. Many will lose their jobs or encounter financial difficulties, but wouldn't this arguably have also been true during the 2008 financial crisis, which the parks seemed somewhat unaffected by? Well, they were of course affected to an extent, but what I mean is; they didn't seem to suffer too much from it. For example, Alton Towers built Thirteen not long after it had blown over and had their highest attendance year since 1994. 2008 & 2009 also produced decent attendance, even when the crisis was ongoing. Furthermore, the UK government has also announced measures to pay 80% of wages to those who are off work in order to prevent major layoffs.
 

Nick13

New Member
You can’t really compare this situation to the 2008 financial crisis for the parks, it’s entirely different circumstances. In terms of the UK parks, they would have benefitted back then from the lack of people travelling abroad for expensive holidays and taking trip in the UK instead.

Even if they are able to open by May or June this season, the UK parks are almost certain to miss out on all of the school trips that they get at the end of the year. Attendance is going to be massively down on previous seasons.
 

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
I did also have another thought; I don't know what other countries are doing, but the UK government has announced a raft of new measures to help businesses in sectors directly affected by the crisis (e.g. the airline industry, the tourism industry). So my thought is;
A) Would theme parks fall under the government definition of "directly affected by the crisis"
B) Could any government funding potentially offset the parks' losses during closure?

I'd also imagine that the parks have an insurance policy in place that covers this sort of event; the parks can't help the outbreak of a deadly virus.

As for people being hit financially; this is of course very true. Many will lose their jobs or encounter financial difficulties, but wouldn't this arguably have also been true during the 2008 financial crisis, which the parks seemed somewhat unaffected by? Well, they were of course affected to an extent, but what I mean is; they didn't seem to suffer too much from it. For example, Alton Towers built Thirteen not long after it had blown over and had their highest attendance year since 1994. 2008 & 2009 also produced decent attendance, even when the crisis was ongoing. Furthermore, the UK government has also announced measures to pay 80% of wages to those who are off work in order to prevent major layoffs.
In America: No. Congress is currently working on passing economic relief packages focused on folks losing their jobs and industries hit by coronavirus (e.g. airlines). I'm actually following it for work, as there's a few energy sector lines of bailout. But tourism is not included in this bill.
 

TommyAlex

Member
Here in the UK, I think it's safe to say parks won't be reopening any time before the summer. Obviously there is going to be a massive impact, what with a lot of people suffering economically from all of this, but the theme park industry can hope that cancelled flights, travel bans and lack of enough money will mean people will turn to UK attractions instead of a holiday abroad - after so many weeks stuck at home everybody will want to go out and go somewhere.

Sadly I think this has sealed the fate of some parks, and I imagine it will be quiet when it comes to investments for the next few years. But hopefully, if it's a nice summer and this is overcome by then, UK theme parks might come out at least sort-of OK.
 
Top