Strategies for Buying an Amusement Park for Sale
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Amusement parks are an American pastime: The nation's first was built in 1846, nearly 175 years ago, and it's still in operation today. The industry has since gone on to expand exponentially, providing families with hours of thrilling fun.
Aside from their storied history, amusement parks tap into our inner child, and they're quite the money maker, too: The theme and amusement park industry in the US was valued at over $15 billion in 2022.
Thinking about owning your own piece of American history? Buying an amusement park for sale is absolutely possible, but it takes a lot of hard work, motivation, and marketing finesse.
Here, we'll cover what commercial real estate investors should know when buying amusement parks for sale. We will cover amusement park costs, buying an amusement park, and amusement park profitability.
Let's get started.
Can You Invest in Amusement Parks?
Yes, you can invest in amusement parks. The simplest way to do so is to buy shares in amusement park companies, like Disney, Six Flags, OCT Enterprise, and SeaWorld. However, the more challenging (yet rewarding) strategy is buying an amusement park for sale to create your own operation.
Although most of the major amusement parks in the world are owned by large theme park corporations, independent theme parks exist all over the country and are often local cultural icons, such as Long Island's Adventureland.
How Much Does an Amusement Park Cost?
It's impossible to give a single figure here: Amusement parks are a huge subcategory of special-purpose real estate and come in all kinds of shapes and sizes, ranging from small parks with a handful of attractions to massive complexes spanning hundreds of acres.
A small park with a handful of attractions may come in at about $1 million, while a regional waterpark can cost hundreds of millions.
The two main options are to buy an existing amusement park for sale or to build your own. Building is certainly the more expensive and time-consuming option, as you'll have to finance commercial land acquisition and park construction. Property costs can vary significantly by state, so startup costs depend heavily on location.
In terms of size, theme parks can range between a few acres to hundreds, like a Disney resort. Experts recommend that ideal park density sits at about 500 to 600 guests per acre,
How Much Do Amusement Park Attractions Cost to Build?
Amusement parks typically need to finance substantial construction and development due to the resource-heavy nature of theme park attractions. Examples of common attractions at theme parks include but are not limited to:
- Roller coasters;
- Water rides;
- Ferris wheels;
- Carousels;
- Game booths; and
- Funhouses.
The costs of building different types of attractions vary significantly: A smaller carousel might cost about $50,000, but a single roller coaster can cost several millions of dollars. For example, the world-famous Kingda Ka roller coaster at Six Flags Great Adventure in New Jersey reportedly cost $25 million to build.
Similarly, maintaining these attractions eats up a significant portion of amusement park operating budgets. Industry surveys indicate that amusement parks in the US spend an average of $300,000 a year just on ride maintenance and upkeep.
How Do You Buy an Amusement Park for Sale?
If your plan is to buy an existing park, you can start your search on the Internet. Many online listings exist for small-to-medium-sized amusement parks for sale starting at about $500,000.
If you want to buy land to build a park, you'll have to register your park with the state government and get the right permits.
Some 44 states in the US have state-level agencies that regulate the construction and operation of theme parks. The permitting process will look different in every state, so make sure to have a real estate attorney on your investment team who can review the necessary regulations.
Whether you're buying amusement parks for sale that already exist or buying commercial property to build a new park, working with a commercial real estate broker can streamline the process. Aside from providing general advice on how to buy commercial property, commercial real estate brokers can also take the lead in contract negotiations.
Is Owning an Amusement Park Profitable?
It's hard to find exact figures on average theme park profits: According to a 2017 report, the average profit margin for a select sample of the most well-known theme parks was 32.5%. However, this percentage comes from some of the larger theme park owners and may not be representative of the typical independent amusement park.
Some sources claim that average amusement park profits hover between 10% and 20%, while others claim that an independent theme park owner can turn an average annual profit of $100,000 to $200,000.
Amusement parks generate the majority (60%) of their revenue through park admission and ticket sales. Food and drink sales make up about 17% of operating revenue, and merchandise an additional 10%. Amusement park attendance depends on consumer discretionary income levels, meaning that amusement parks get hit particularly hard during recessions.
What's the State of the Amusement Park Industry?
Like many others in entertainment, the amusement park industry suffered major slowdowns during the COVID-19 pandemic, with attendance rates dropping as much as 80% in some areas.
However, theme park financials have bounced back, with major players like Disney reporting substantial revenue gains during the second half of 2022 and the first half of 2023.
Theme parks adapted hard during the pandemic, with many taking the leap into featuring virtual reality, smartphone integration, and advanced technologies. Other changes to the industry include more dynamic pricing, improved food quality, and creating more immersive park-going experiences.
What's America's #1 Amusement Park?
Perhaps unsurprisingly, the number one amusement park in the US (and the world) is Disney Parks. In 2021, Disney amusement parks generated more than $16 billion in revenue—50% higher than the second highest-grossing amusement park company, OCT Limited, at $10.7 billion.
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