The Financial Strategies Theme Parks Use To Make Millions

A photo of Disneyland Paris.

For many of us, theme parks house a collection of nostalgic memories, exhilarating rides, and sweet snacks. But each purchase at a theme park reflects carefully calculated moves on a hidden financial chessboard. In reality, the complex mazes of carnival games, fast-pass tickets, and surprisingly expensive food follow key financial concepts to ensure that theme parks can have long-term success.

Most important is the principle of supply and demand. Successful theme parks research ticket sales to better price their tickets and maximize earnings. If you’ve ever wondered why ticket prices are much more expensive during weekends and holidays, it’s because of peak season, which is the time of the year when theme parks receive the most visitors. So, to make up for the operational costs during weekdays or off-peak seasons, parks will raise the ticket prices during peak season in order to generate enough revenue to turn a profit. It’s definitely more uncommon to find theme parks that don’t use this strategy. It is the industry standard, with Walt Disney World, Universal Orlando Resort, and Six Flags all following this strategy to generate higher revenues.

Successful theme parks also use the Return on Investment (ROI) metric. It’s no wonder that theme parks are incredibly high-investment operations. Just think of all of the costs, including labor, building the attractions, purchasing food, sourcing carnival prizes, and operating arcades! Therefore, before theme parks invest in major rides or attractions, they conduct an ROI projection, calculated by comparing the estimated revenue from the investment to its initial and operational costs. If a theme park wanted to build a new roller coaster, here are some questions the developers may ask themselves before investing:

• Is there demand for this roller coaster?

• Would the operation and maintenance costs exceed the revenue generated

• Will riders purchase more food, drink, or merchandise due to this experience?

If the ROI projection is positive, it would be a financially wise decision to take the risk and invest in the roller coaster, as a positive projection would indicate that the net revenue will likely be greater than the initial investment. Conversely, a negative ROI projection can signal that investing in the new roller coaster will likely not pay off.

Theme park giants like Disney need to maintain dozens of rides and attractions per location. Every park analyzes the ROI of every single investment to make the most informed financial decisions. For example, Disney locations in California and Florida invested over $1 billion in building Star Wars: Galaxy’s Edge. Of course, confidence in this investment didn’t appear out of nowhere. The financial team conducted extensive research to forecast the surge in demand for tickets brought about by the Star Wars brand. A positive ROI showed high demand for more Star Wars attractions, so they invested in various revenue streams related to Star Wars, including Star Wars merchandise and themed dining experiences. They even raised ticket prices to take advantage of the high demand.

Interestingly, Disney has also had some ROI miscalculations, seriously damaging the theme park's profitability and branding. Before, when Disneyland Paris was still called Euro Disney, the park invested $1.8 billion to start operations in 1992, with almost 50 attractions and a projected 11 million visitors in the opening year. Euro Disney had severely miscalculated, however, and they ended up receiving only about 7 million visitors. As a result, the park remained millions of dollars in debt for many years. According to a Harvard Business case study, the main issue was the overly optimistic ROI calculation, which led to a very high investment for demand that didn’t exist—at least to the extent they thought it did. Demand wasn’t as high as expected because European consumers were just not that interested. The theme park was a copy-and-paste of the American model, with drinking restrictions, American food, and Disney brands that Europeans found less attractive, which led to lower-than-expected ticket sales.

Theme parks aren’t just about building new rides and attractions; they’re about all the different activities visitors can do and the memories they can make. Theme parks run on the idea of revenue diversification, which involves generating income and spreading the risks of investment across multiple sources. This is why theme parks have no shortage of things you can impulsively buy. Disney is the master of revenue diversification, with every visit, for most, resulting in at least one extra purchase, including Disney-themed food and drinks, high-margin merchandise, exclusive dining experiences, and unique activities. Disney doesn’t solely rely on visitors purchasing a ticket; they rely on all these other profit-makers to ensure that even if fewer people visit, they can still generate income. The main idea is that by protecting overall financial performance from changes in any one source of income, the amount of risks is reduced.

Yet, a significant drawback of revenue diversification is that it is resource-intensive, and smaller, regional theme parks cannot invest to the same extent as corporations like Disney due to resource constraints. As a result, they become more dependent on the main source of income, like the rides or the tickets, increasing vulnerability to risks or sudden changes in demand. For instance, Ocean Park in Hong Kong relied way too much on its primary source of income, which, due to changes in demand, resulted in operating expenses exceeding earnings. To this day, Ocean Park is still in debt and has struggled to attract visitors due to the majority of Hong Kongers traveling to mainland China, where day trips are convenient and cheap. The Hong Kong government deferred Ocean Park’s loans, which totaled to HK$5.4 billion ($690 million), and they encouraged more revenue diversification.

Behind every theme park is a fragile web of financial management that dictates everything from the visitor experience to the overall revenue of these multimillion-dollar enterprises. Whether it's Disney’s careful orchestration of immersive, revenue-generating experiences or the missteps of Euro Disneyland and Ocean Park, every financial decision weaves directly into the park’s ability to entertain customers and maintain long-term profitability.