When Joy Hogeley and Wenxuan Chen began their research last
fall, studying the dynamics of the theme park industry in Southern
California, theirs was an exercise born more out of necessity than
innovation.
Hogeley and Chen, both third-year graduate business students,
have found new trends in theme park attendances with regard to
population growth and unemployment rates ““ two factors that
have largely been ignored in most economic analyses about the
industry.
The two business students will be presenting the findings of
their research this evening, in an event organized by the
Entertainment and Media Management Institute at the UCLA Anderson
School of Management.
Hogeley and Chen discovered that over the last two decades, the
growth in theme park attendance has generally matched the
population growth.
“People seem to go to theme parks with a frequency that
hasn’t changed,” Hogeley said.
Basing their research around seven major theme parks in Southern
California, the two students focused on economic data like theme
park attendances, unemployment rates and even fuel prices. Their
project was carried out with the help of another third-year
business student, Dongmei He, who has since returned to China.
“We did a statistical analysis of factors such as the
state of the economy, population growth and unemployment rates to
develop a model to analyze the patterns of theme park
attendance,” Hogeley said.
Besides population growth rates, Hogeley cites the rate of
unemployment as the most important factor in influencing the theme
park industry.
“On a year-to-year basis, the state of the economy and the
rate of unemployment affect whether a park has a good or bad
year,” Hogeley said. Generally, a high unemployment rate also
negatively affects the rate of attendance at theme parks, Chen
added.
Hogeley and Chen initially began their Applied Management
Research Project ““ which is a graduation requirement for
every business student ““ analyzing the revenues of theme
parks. But they soon realized there were other avenues of research
open to them.
“We found that there were more interesting kinds of data
about consumers that were related to revenue, such as attendance,
customer segmentation, age and income,” said Chen.
The theme park industry only publicly reveals information about
attendance, Chen said, which thus forced them to focus their work
in this area.
“We also discovered that there was absolutely no previous
literature that analyzed this subject,” Chen said.
Their statistical model allowed them to reach several other
conclusions that were well-supported, and very surprising, Chen
said.
A common assumption within the theme park industry, Chen said,
regarded weather and fuel prices as the most significant influences
on attendance.
Hogeley and Chen discovered that contrary to popular belief,
weather was not a factor at all. “Florida had three
hurricanes last year, yet Southern California, with all its
sunshine, had a smaller growth in attendance,” Chen said.
They also found that, rather surprisingly, there was a positive
correlation between fuel prices and attendance rates.
“That is probably explained by the links between fuel
prices and the state of the economy,” Chen said. “While
a good economy may have high fuel prices, on the whole, it
influences attendance rates positively.”
While their research has been both successful and pioneering,
Chen believes the restricted access to information within the
industry has limited the scope of their research.
“There is a need for local industries to release data that
they normally keep private, to allow a more thorough industry-wide
study,” Chen said.
Chen hopes to set up a study group at UCLA, so that an
industry-wide study can be conducted using data from every
industry, without the study group releasing any confidential
information to an industry’s competitors.
While Chen believes their research has been both successful and
innovative, she still feels there is a need for further study in
this area.
The event is part of a series for business students and media
executives who look at “cutting-edge issues” in the
industry, said Gigi Johnson, the executive director of the
Entertainment and Media Management Institute.
“This is a wonderful opportunity for us to showcase their
research, as it challenges what the theme park industry has held
dear for so long,” she said.