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America’s amusement parks ready to ride

The Fourth of July ushers in the heart of summer, when Americans traditionally ease off on their work and flock to amusement parks for their dizzying rides and attractions. And many in the theme park industry are looking forward to a busy summer.
Hip-hop singer Nelly rides the Hulk at Universal Orlando
Rap star Nelly rides on the Incredible Hulk roller coaster at Universal’s Islands of Adventure theme park in Orlando, Fla., this year. America’s theme parks are bracing for solid 2005 results.Kevin Kolczynski / Reuters
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The Fourth of July weekend traditionally ushers in the heart of summer, when Americans ease off on their work and flock to amusement parks to enjoy their dizzying rides and attractions. And this year those parks could be busier than ever.

After several lean years that followed the Sept. 11 terrorist attacks and the war in Iraq, America’s big amusement parks are once again spending money to develop and build new rides and attractions -- and as a result amusement industry observers expect 2005 to be a decisive year.

“It’s still early in the season, but everyone in the industry is optimistic about 2005,” said Dennis Spiegel, president of International Theme Park Services in Ohio, a theme park consultancy.

“My research shows demand has been building since 9/11, and a lot of parks have spent a significant amount of capital on new attractions this year; that bodes well for the industry, and it means people are turning out to try these rides. It’s a good story this year,” he said.

The American amusement park business, with its thrilling rides, water parks and animal-themed attractions is the largest retail family entertainment industry in the world. And like its stomach-churning roller-coaster rides, the industry has had some big ups and downs over the last 15 years.

In the 1990s it splurged, expanding into overseas markets in Europe and Asia and built new blockbuster movie-themed rides. But attendance at the nation’s top 50 amusement parks slumped in the years following the 2001 terrorist attacks, as fewer overseas tourists visited America, and only clawed back modestly in 2004.

This year, with U.S. terrorism fears abating and parks developing and building new rides and attractions, industry analysts expect an upswing in attendance.

A good omen for a strong 2005 is the fourth quarter of 2004, notes Spiegel. Attendance at Disney resorts, which operates parks like Disney World in Florida, and for Universal Universal Studios' Themeparks, rose 11 percent and 14 percent respectively he said.

“If you’re doing well at Christmas and at New Year that carries on into the summer season, and the theme park industry’s fourth quarter of 2004 was strong in the Florida and California markets,” said Spiegel.

A free tank of gas?
Even a recent spike in the price of gasoline is being greeted by many a would-be thrill seeker planning to drive to the nearest water park, or Six Flags, this summer with a collective shrug.

“I talk to most of the major amusement park operators and I hear consumers saying that they’re seeing zero impact so far this season from high oil and gas prices,” Spiegel said, adding that his own research shows that as long as gas prices stay in their current range — between about $2:20 and $2:60 a gallon depending on the region — the impact on amusement park attendance will me negligible.

“It’s not that people like higher gas prices, but they’re realizing they’re likely to remain high and so the impact is settling in,” he said. “But if the price of gas goes up to the $3 range that would be a factor and could deter people from driving to a park.”

Some resort towns are already anticipating visitors’ concerns about high gas prices during the summer. Worried that sticker shock at the pump will keep visitors away, many are offering an incentive: a free tank of gas. California’s Big Bear Lake, for example, recently extended its $25 gas voucher spring promotion for the entire summer.

Weather worries
One potential spoiler for the amusement park industry is the weather, Spiegel notes. A particularly aggressive or prolonged hurricane season dampens down attendance, he said, especially for parks in the Carolinas, Louisiana and Texas.

“We are starting to see some signs of an early hurricane season and no one likes to see that,” he said. “Hurricanes didn’t hit until late last year, at the end of the summer, and they were not as impactful as they could have been if they were in July and August, so an early hurricane season could be a big problem for the industry.”

The industry is getting a helping hand from the U.S. economy, according to a new report from accounting firm and consultancy PricewaterhouseCoopers

Stronger economic growth and weakness in the U.S. dollar, which has not reversed a three-year down trend against other major world currencies, will boost worldwide spending on theme parks and amusement parks 4.5 percent a year to $26.8 billion by 2009, according to the study, with spending at U.S. theme parks and amusement parks expected to increase 3.7 percent a year to reach $13 billion.

Parks are also diversifying their offerings to maximize revenue. Many are offering discounts to residents, multi-park tickets and some continue to operate through the fall and winter months, developing activities during traditional holidays like Halloween and Christmas.

“Some of parks are asking, ‘Do we want to spend $20 million on a new roller coaster, or do we want to put on concerts, or Christmas programs?’” said Suzanne Mark, former Vice President of Education of the International Association of Amusement Parks, a trade group, and now a consultant to the amusement park industry. “And in many cases it’s the latter.”

But amusement parks are still busy building roller coasters. Beth Robertson, vice president of communications services for IAAPA says parks have added 170 new rides so far this year, and 300 are expected by the end 2005.

And the coasters are getting bigger and scarier.

The recently-opened, 456-foot-tall “Kingda Ka” roller coaster at Six Flags Great Adventure in New Jersey is billed as the world’s tallest and fastest and rockets riders horizontally from 0 to 128 mph in 3.5 seconds, although it has been closed for several weeks as officials correct a malfunction.

“The coaster is still king and people want them higher, faster and longer,” Spiegel said.