How the slowing economy is affecting theme parks this summer

Wall Street analysts are raising concerns about lagging attendance and spending levels at Disney, Six Flags, SeaWorld and other U.S. theme parks during the industry’s busy summer season as visitors contend with recession worries, high gas costs and ticket price increases.

The economic slowdown in the wake of COVID-19 pandemic shutdowns at theme parks across the United States is keeping visitors from riding roller coasters and tackling thrill rides this summer, according to financial analysts reports.

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“This is happening despite the early predictions and performance reports claiming that the theme park industry was expected to thrive this year,” Screamscape’s Lance Hart wrote for Blooloop. “After all, prior indicators claimed that there was a huge pent-up demand for the product amongst the public.”

Wall Street analysts are beginning to see signs of weakness across the theme park industry.

Wells Fargo analyst Steven Cahall said Disney stock has “seen the wheels come off” in 2022, in a note to clients on July 25.

Wells Fargo blamed the slowing economy for lower spending, revenue and income at Disney theme parks, according to the analyst report. Cahall expects visitor spending, hotel revenue and operating income at Disney theme parks to be lower in 2023. The Wells Fargo analyst expects Disney theme parks to recover in 2024.

“We remain Disney bulls,” Cahall wrote in the analyst report. “We see a big catalyst ahead.”

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Citi Analyst James Hardiman lowered his price targets for SeaWorld Entertainment, Cedar Fair and Six Flags in early July, according to a report to investors.

“While we continue to like the theme park industry’s ability to mitigate losses even in the event of a recession, we are beginning to see signs of weakness across the industry, with the month of June particularly problematic,” Hardiman wrote on July 8 in a note to investors.

Cedar Fair released financial data after the Fourth of July weekend that painted a rosy picture during the first half of the year – showing strong performance compared to the same period in 2019 prior to the COVID-19 pandemic.

The parent company of Knott’s Berry Farm set new record highs for net revenue, theme park spending and season pass sales through the first half of 2022, according to financial statements released by Cedar Fair.

“Yet early reports from a number of theme parks this summer have painted a different picture,” Hart wrote for Blooloop. “Attendance seems to be lacking at many theme parks thus far, despite favorable weather conditions throughout most areas during June.”

Fewer visitors this summer would not necessarily be a surprise at Six Flags, where new CEO Selim Bassoul has been willing to trade lower attendance for higher visitor revenue from price increases, according to the amusement park chain’s latest quarterly report.

Universal parks are showing no signs of a negative impact from a slowing economy after parent company Comcast reported quarterly earnings on July 28.

“Universal theme parks are knocking the cover off the ball,” writes MoffettNathanson analyst Craig Moffett.

Universal’s “red hot” ​​theme park revenues jumped 64.7% year over year, according to MoffettNathanson.

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Other theme park companies like Disney, Seaworld, Six Flags and Cedar Fair are expected to reveal attendance and spending trends for the busy summer season when quarterly earnings reports are announced in early August.