Is Now A Good Time To Invest In New Attractions and Theme Parks?

Here we are months into the pandemic. Despite the fact that while we keep hearing that a vaccine is “around the corner” and testing is becoming more reliable, how do we get out of this? It feels like all of these changes, especially within the attractions and theme park industry, are permanent.

While theme parks have lost billions (perhaps trillions collectively) since the start of the pandemic, despite the way it feels right now, nearly all of the big contenders will survive these hardships. No matter what the path is to get back to “normal”, it will happen and when it does, what will things look like?

Recently we posted a story about a potential Lionsgate theme park and resort that could open in Orlando, Florida. If you follow Theme Park University, you know there are a lot of proposed parks and attractions that never see the light of day. For logistical, financial and even political reasons, even with the best of intentions some projects just weren’t meant to be.

When Schuyler Buffington responded with the above message on our Theme Park University Facebook page about the potential of a Lionsgate Park opening in Orlando, I actually think it’s a good thing to respond in an article versus social media.

First of all, Schuyler is right. Most movies aren’t being released in theaters, travel has been cut off at the knees (but slowly getting better) and all the major theme parks in Orlando alone have laid off over 50,000 employees at this point.

Again, this doesn’t mean the future of theme parks or entertainment in general is bleak. When it comes to the Lionsgate Orlando theme park project in particular, the soonest it could open is 2024. That is if the leaked documents are accurate. More importantly, it’s important to know how a Lionsgate project gets funded.

Even though there are several Lionsgate attractions (including indoor theme parks) scattered around the globe, Lionsgate isn’t in the attractions operating business. Rather, they license their movies and intellectual properties out to others who are interested in using them. While I am not privy to their particular deals, this is often a percentage of sales, including merch and food & beverage. Companies like this usually get a flat yearly fee on top of this. That means they spend virtually zero dollars and get to kick back and enjoy the royalties of their own work.

So who would be an investor for a Lionsgate Orlando theme park? Literally anyone with the dough. While the entertainment division is currently taking a nosedive at the moment, the stock market, in general, is doing quite well. This means for corporations who aren’t giant entertainment conglomerates, they could be doing great financially.

To be clear, if you’ve got a portfolio with a hedge fund and/or you’re a venture capitalist, odds are you are doing just as well during the pandemic and in many cases, even better than prior to March. Thus, if you’re sitting on a pile of cash and looking for an investment, why not a theme park?

Headline from Travel Pulse Website

Historically, every time the economy takes a nosedive for a few years, the recovery is even stronger than before. We have seen this over and over again especially in theme parks. In years where people can’t afford to travel (after 9/11 and 2008), once the pendulum swings back the other way, many people often “go big” and return to theme parks in record numbers.

This year, according to analysts, there is a huge pent up demand for travel once conditions improve either financially and/or travelers feel safe to do so.

Thus, let’s say you’re a venture capitalist who owns a few businesses and a has a diversified portfolio that doesn’t include anything within attractions or theme parks? Wouldn’t you (and other like minded people) want to invest in something that historically seen an upswing in after an economic downturn?

Regardless of what your personal thoughts are on Lionsgate films, they do hold brand recognition. Thus, they could draw tourists away from places like Fun Spot Orlando or I-Drive 360.

Finally, I want to say that I have no idea if a Lionsgate Orlando Park could or even should get built. If I was in a position to own a stake in such a company, I would no doubt consider it. However, maybe they want $1 million a year plus 50% of all sales as their fee? Now THAT is a reason this park could never happen. On the other hand, thinking new attractions is a bad investment at this point is completely inaccurate. Your thoughts?

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The views and opinions of Theme Park University Staff are not associated with any themed entertainment company and are clearly our own. Please don't sue us.

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