Theme Parks Face Tough Tech Investment Choices

Disney's Epcot park and Hollywood Studios in Florida reopened their doors to visitors on Thursday, after the company's Magic Kingdom and Animal Kingdom opened on July 11 in Orlando. The moves symbolized a broader reopening by theme parks in countries worldwide. The reopenings dovetail with hard decisions. Cash-strapped theme park owners must evaluate which technological investments they can afford and which will deliver the best long-term return. "It's a tough time right now for any theme park to be thinking about capital investments," said Robert Niles, editor of Theme Park Insider. "Many chains have had to rush forward development of new apps to support mobile ordering, advance reservations, and other customer service features that they needed to promote safe physical distancing in the parks," Niles said. "But the lack of income over the past several months, coupled with much lower than expected income over the year ahead, will keep most parks from committing to major capital expansions for the time being." Revenue is in short supply. For U.S. regional parks, attendance in the fall might be half the year-over-year level, and attendance in 2021 might struggle to reach 80 percent of 2019's levels, forecast Eric Wold, an analyst at the research arm of investment bank B. Riley FBR. Yet parks may be able to manage the lower volumes. "We can still remain — over short periods of time — in a positive cash flow position at a park level with attendance levels that may be as low as mid-teens or well inside of 25 percent of