2025 Uncharted Waters; Fascinating Times!
Who has the map?

As we dive into 2025, the theme park and leisure industry finds itself in a fascinating yet uncertain era, marked by shifting economic dynamics, evolving consumer behavior such as low consumer confidence, and external pressures like the newly established tariffs and flaring global tensions. It’s a time of high stakes, smart strategizing, and swift pivots—where the decisions made now (at the initiation of the 2025 season) may very well shape the future landscape of entertainment for 2025 and the short term into 2026.

One of the most pressing issues currently facing theme park operators and manufacturers is the rising impact of tariffs, and their unknown effects. Trade disputes, particularly involving materials and components imported for ride manufacturing, are seeing signs of creating turbulence across the industry supply chains. These tariffs—targeting steel, aluminum, and other essential industrial techno components—can significantly increase the cost of manufacturing attractions. At this point, it is too early to calculate the financial impacts but certainly is not a positive factor for the manufacturers needless to say.

Now obviously this doesn't just affect manufacturers; it hits all the operators as well. Higher production costs mean higher prices for new rides and upgrades, squeezing capital expenditure (CAPEX) budgets. For many operators, especially mid-sized parks, this can lead to reevaluation or delayed CAPEX plans. Instead of investing in new attractions, parks may shift toward refreshing, where possible, existing rides, enhancing guest experiences through technology and software changes, or focusing on lower-cost entertainment offerings. I believe the cost to build and buy theme park rides in the short term could rise steeply, causing companies to rethink or delay some capital investment strategies, like we saw in 2020 (Covid). This cautious approach could lead to a quieter product revolution cycle in the near term, 12-24 months, with parks opting to hold back until economic conditions stabilize.

Another immediate challenge is the growing economic uncertainty affecting consumer spending. Inflation concerns, global political instability, and fluctuating interest rates are all putting pressure on household budgets. In response, parks are aggressively rolling out discounts to maintain attendance and revenue streams. We are seeing announcements for discounts as early as we have ever seen in recent season liftoffs.

Disneyland, for example, has already launched attractive promotions to celebrate its 70th anniversary, which, while celebratory in tone, are also a strategic play to boost summer attendance amid a potential softening demand. Universal and other major players are following suit. The hope is that increased foot traffic will lead to higher in-park spending on food, beverages, and merchandise, balancing out any loss in ticket revenue. Remember we are and always have been a “mark it up, mark it down industry”, heavy into discounting.

But this strategy comes with its own risks. There are always pitfalls associated with over-discounting risks. If parks lean too early and too heavily on discounts, they risk an early devaluing of their brand. And consequently, frequent, deep discounts can train guests to wait for sales, making it harder for parks to return to full pricing. This is a critical tightrope. While discounts may drive short-term gains, they can hinder long-term pricing power and erode brand perception. Six Flags ran into this pricing confusion situation during the period prior to the merger. This appears to be coming under control under Cedar Fairs’ leadership.

The reality is the industry is bracing for the “season of discounting”. As parks watch front gate numbers in real time, they'll be forced to make rapid adjustments — "calling audibles all summer long" to stay ahead of the curve. Currently, there appears to be too much uncertainty to avoid these future audibles.

Another factor looming over the industry is the slowdown in international visitation. Concerns over tariffs, visa complications, and even personal safety perceptions are affecting inbound travel from Canada, Mexico, and South America. We are not going to bounce back from this quickly. This current reduced cross-border travel could have lasting effects for U.S. parks that have traditionally benefited from strong international tourism. This reduced international presence could hit major destinations like Orlando and Southern California hardest. Parks in these areas depend on a healthy mix of domestic and international guests, and a pullback from nearby countries could compound, thus developing 2025 attendance challenges. We have seen this week where Canadian tourism plans to visit the USA are down 72%.

Now despite these unfamiliar headwinds, not all is bleak. One major beacon of brightness is Universal’s upcoming Epic Universe, set to open on May 22, 2025. Industry insiders predict that its debut will significantly energize the Orlando market and perhaps lift the entire industry. With its cutting-edge attractions, immersive I/P’s, fresh new themed lands, and a wave of new marketing, Epic Universe is generating a massive buzz, and tourist interest, particularly at a reported estimated cost of $7+billion!! The word of mouth on numerous blogs, and quite frankly throughout the industry, appears to be going so good that this introduction of Orlando’s first major theme park in 27 years could offset the local economic issues and will have a positive impact on Orlando and the other theme parks and attractions.

So, what can operators be doing in the face of all this volatility? Well, adjust capital planning, if necessary. Parks should consider phasing out, or put on hold, high-risk capital projects and instead invest in lower-cost, high-impact upgrades.

Next, get smarter with discounting programs. Deep discounts should be used strategically, not reflexively. Parks might benefit from personalized pricing models, bundling offers, or exclusive member deals that maintain value perception. I have been stressing the importance of parks properly implementing true dynamic pricing for years, unfortunately the “mark it up, mark it down” mentality is too hard for many to walk away from. Also, with international travel slowing, boosting domestic appeal, parks should double down on regional marketing efforts. Focusing on local markets and offering flexible, affordable options can attract budget-conscious domestic travelers. It would be smart to resurrect the term and program from 2007-09, Staycation. It actually worked.

Monitoring guest sentiment early on is going to be of paramount importance to the outcome of the 2025 season (do your research). Parks should keep a close eye on the consumer confidence index and shift quickly to accommodate changing preferences. Things like pricing concerns, internal spending variances, visitation shifts, and government interventions, potentially all loom at this point in time.

2025 is shaping up to be a pivotal year for the theme park industry. It’s a time of immense challenge but also of immense opportunity. The choices made now—whether in pricing strategy, investment, or guest engagement—will set the tone for the next several years. With the right mix of caution, creativity, and agility, the industry can weather the current economic calamity going on and come out stronger. We always do. After all, the real magic of our theme parks has always been our ability to transport guests from the real world to one of wonder and escapism. In times like these, that escapism might be more valuable than ever.

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