by Chris Dyer
May 24, 2023
Pervasive restrictions on travel and social distancing requirements prevented most people from traveling or spending on recreation in 2020 and 2021 and forced others to cancel existing plans. As restrictions lifted, consumers were ready to spend again on everything from gambling and amusement parks to cruises and movies. This year, even more people are expected to get out of the house for long overdue trips and recreational activities. Prepare for summer crowds!
Gamblers aren’t particularly known for being risk averse. They tend to weigh the odds. Despite the concern of COVID-19 transmission and an increasing number of variants, gambling showed among the strongest recoveries, more quickly than many other types of recreation in 2021. In fact, it was the only form of recreation to reach pre-pandemic levels that year. Consumers increasingly relied on gambling (either in-person or online) as a form of entertainment rather than attending sporting events or amusement parks, where crowds were more likely to be an issue.
This strength has continued even as other forms of entertainment become more accessible. In 2022, gambling revenues reached an all-time high. This year, with the expansion of mobile sports betting in Ohio and other states, revenues may climb even higher. Through the rest of the year, another group of risk takers may take the recovery spotlight.
Most amusement parks were closed, or open with limited capacity, during the COVID-19 pandemic. Often, trips to amusement parks – especially major ones (e.g., Universal Orlando, Walt Disney World) – are planned far in advance. Operating at full capacity in 2022, Walt Disney World faced massive crowd swells.
Many consumers were excited to get back into the parks, and die-hard fans were desperate to get their hands on new collectibles. For instance, in January 2022, Walt Disney World released its collectible “Figment” popcorn bucket to massive fanfare. Figment, a purple dragon character featured as the guide on Epcot’s “Journey to Imagination” ride (and so named as a “figment of imagination”), is a fan favorite. Patrons lined up for four to five hours to get their hands on the popcorn bucket. At one point, the line was over seven hours long. The buckets ran out, leaving some guests a bit disgruntled. According to Disney, this was the company’s longest line since the December 2021 opening of its Star Wars Rise of the Resistance ride, when the wait time reached four and a half hours. However, the massive swell seen since the pandemic has led Disney to introduce a range of new ticketing options and fast passes for guests, causing mass confusion and frustration, but seemingly maximizing attendance.
The addition of new parks and attractions, such as Universal’s Epic Universe with an expected opening in 2025, will draw in visitors as well. The park was intended to begin construction earlier but was delayed due to the pandemic. It will feature a Nintendo World area, which will benefit from the popularity of the newly released The Super Mario Bros. Movie.
Many amusement parks have shifted to a business model focused on season passes. Though major theme parks have offered passes for years, smaller parks have been taking advantage of the plan to encourage repeat visits and increase in-park spending per visit. However, some of those offering passes during the pandemic were pushed to stretch existing passes into 2022 due to passholder inability to enter the parks once they reached the established capacity – if they opened at all. Some faced calls for refunds and lawsuits brought by passholders. Though this may have limited total revenue for amusement parks to a degree, annual and season passes are expected to continue to be popular this year. According to a 2022 survey carried out by Freedonia Focus Reports, of those who planned to visit an amusement park, 69% were likely to purchase an annual pass.
Purchasers typically benefit from free parking, free admission, and a discount on food and/or merchandise inside the park. Once inside the park, visitors are more likely to spend money on food and merchandise since admission (and often parking) is out of mind.
The cruise industry is another area that was heavily impacted by the COVID-19 pandemic. With cruise ships being the site of some of the early outbreaks, the industry was effectively shut down for more than a year. However, as restrictions on travel and social distancing requirements lifted, the cruise industry began to show signs of recovery.
In the early months of 2022, cruise lines resumed operations with reduced capacity and enhanced safety measures. This allowed them to slowly start rebuilding consumer confidence and attract passengers who were eager to get back to traveling. Through the end of 2022 and the beginning of 2023, cruise lines lifted mask and vaccination requirements, and introduced very affordable rates to encourage travelers to book cruises. However, the industry is still facing some challenges.
As consumers have become more accustomed to booking vacations online and creating their own itineraries, the traditional cruise model has become less appealing to some. Additionally, the rise of alternative forms of travel, such as RV rentals and road trips, have siphoned off some of the cruise industry's customer base.
Despite these challenges, there are some reasons to be optimistic about the cruise industry's future. For one, there is still a significant demand for cruising among consumers who are looking for a convenient and all-inclusive vacation experience. Additionally, the industry is continuing to innovate, with new ships and destinations being added to itineraries all the time.
For those less willing to embark on such lengthy journeys, movie theaters may offer some fun a bit closer to home.
The COVID-19 pandemic had a significant impact on the movie theater industry, with many theaters closing their doors temporarily or permanently due to public health restrictions and declining attendance. However, as the world began to recover from the pandemic, the movie theater industry slowly but surely started to make a comeback.
One of the major factors that has contributed to the recovery of the movie theater industry is the release of highly anticipated blockbuster films. As vaccination rates increased and moviegoers became more comfortable with attending public events, major studios began releasing films that were delayed due to the pandemic. For example, Top Gun: Maverick and Avatar: The Way of Water both performed well at the box office.
Another factor contributing to the industry's recovery is the creativity and flexibility of theater owners and operators. Many theaters implemented safety measures such as mask mandates and increased sanitation protocols, which helped to reassure moviegoers and make them feel more comfortable returning to theaters. Additionally, some theaters pivoted to alternative revenue streams, such as private screenings and special events, to make up for lost revenue during the pandemic.
However, the movie theater industry still faces significant challenges. The rise of streaming services has led to increased competition for consumers' attention and dollars, particularly during the pandemic, and some consumers may continue to prefer watching movies from the comfort of their own homes. Furthermore, some theaters may struggle to attract audiences if they are unable to secure highly anticipated films. To encourage higher attendance, many theaters are adding enhanced experiences, such as expanded dining and drink menus and various add-ons like 3D and 4D viewing, the latter including motion and environmental effects.
Overall, while the road to recovery may be long, there are reasons to be optimistic about the future of the movie theater industry. Continued innovation and adaptation by theater owners and operators will be key to ensuring the industry's long-term success.
Don’t worry, we have you covered! For additional information and analysis of US industry trends, see the following reports published by the Freedonia Focus Reports division of The Freedonia Group:
About the Author: Chris Dyer is a Market Research Analyst for Freedonia Focus Reports. He holds a Master of Arts in Security Studies, and his experience as an analyst covers multiple industries.
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