StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Risk in the Theme Park Industry - Essay Example

Cite this document
Summary
With billions of dollars worth of investment and millions of visitors each year, the theme park industry is constantly evaluating risk and attempting to minimize it. But with the exception of customer safety, the risks are not manageable. At best, individual parks can come up with innovative strategies to minimize the financial losses that result…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER94.2% of users find it useful
Risk in the Theme Park Industry
Read Text Preview

Extract of sample "Risk in the Theme Park Industry"

Download file to see previous pages

According to Lukas, accidents and deaths are the most closely monitored risk despite the statistical fact that economic concerns and poor weather affect business more frequently. (2005) However, when accidents or deaths do occur, there are several direct consequences. First, the park is often closed during the process of an investigation. In addition to the lost ticket sales during that timeframe, the public perception of danger is increased. "The mere perception of an unsafe ride can affect park attendance, while accidents and deaths can result in park closure and decline in ticket sales.

" (Lukas, 2005) Statistically, the risk is minimal. In 2003, there were only 78 ride-related injuries which resulted in an overnight hospital stay. (Banay, 2005) Nevertheless, the costs are high when accidents do occur. Insurance underwriters are very concerned with safety, and the cost of insurance is dictated by safety records. While patrons of amusement parks are seeking danger and thrills, park management must balance these desires with the risk of increasing insurance rates. Still, the cost of bad publicity is the highest cost resulting from this statistically insignificant risk to the industry.

Terrorism, despite occurring far less frequently than accidents, is considered to be a greater risk to the industry. While the publicity surrounding accidents generally affects one park, or perhaps one family of parks, the effect of terrorist activity is industry-wide. "After an incident of civil unrest, natural disaster, or terrorism, there is an immediate 30% downward spike in the perception of safety at such public locations." (Banay, 2005) She reports that the resultant decline in theme park attendance continues as much as three years after a major terrorist episode.

According to sources cited by Debora Vrana in her article for the LA Times, visits to theme parks worldwide were down by 1.5% in 2003. (2004) This decline was attributed to terrorism in addition to poor weather and a poor economy. Under current terrorism threat conditions, the cost to the industry is potentially high, and the US government currently classifies the risk of another strike as moderate to high. Unfortunately, due to the large crowds that gather at these establishments, they are considered to be a potential target.

The specific consequence of that risk appears to be a long-standing decline in park attendance stemming from a decrease in the public perception of safety. A panel of industry insiders gathered in 2002 to discuss the impact of 9/11 on theme park attendance and revenues. Of note, their conclusions did not identify terrorism as the greatest risk. Rather, they concluded, "at this point, it is the soft economy that is really putting a crimp on vacation plans." (Levine, 2002) Like other businesses within the travel and tourism industry, theme parks rely on patrons to spend their discretionary income.

When the economy is poor, fewer people are spending, and those who are spending frequently spend less. "Road blocks in the form of war in Iraq, SARS, a stagnant economy, and currency rates have impacted the amusement industry." (Banay, 2005) Currency rates are known to affect the rates of international travel, and those parks which attract an international audience are subject to those effects as well. The risk comes in

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Risk in the Theme Park Industry Essay Example | Topics and Well Written Essays - 750 words”, n.d.)
Risk in the Theme Park Industry Essay Example | Topics and Well Written Essays - 750 words. Retrieved from https://studentshare.org/business/1519292-risk-in-the-theme-park-industry
(Risk in the Theme Park Industry Essay Example | Topics and Well Written Essays - 750 Words)
Risk in the Theme Park Industry Essay Example | Topics and Well Written Essays - 750 Words. https://studentshare.org/business/1519292-risk-in-the-theme-park-industry.
“Risk in the Theme Park Industry Essay Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/business/1519292-risk-in-the-theme-park-industry.
  • Cited: 2 times

CHECK THESE SAMPLES OF Risk in the Theme Park Industry

Hedging Commodity Price Risk

Airlines are typically exposed to commodity price risk in the form of fluctuations in the price of fuel oil.... Southwest airlines managed its exposure to oil price risk in the year 2005 with the help of forwarding contracts and successfully enhanced its earnings.... The author of this essay "Hedging Commodity Price risk" illuminates the impact of commodity price risk on the firms as well the significance of hedging such risk....
6 Pages (1500 words) Essay

Risk Management - Hospitality Industry

… Every business entity when initiated will have inherited risk in them as it has to reach the costumers expectations and has to place itself in a competitive environment or it has to create a market demand to its new product to be launched.... Every business entity when initiated will have inherited risk in them as it has to reach the costumers expectations and has to place itself in a competitive environment or it has to create a market demand to its new product to be launched....
12 Pages (3000 words) Essay

Risk Management In The Airline Industry

This essay focuses on the element of risk in the airline industry.... … This essay explaines the element of risk in the airline industry, that could include aspects such as the single loss of aircraft or a collision between two aircraft, terrorist atacks and so on.... This essay also describes risk assessments, incidence of accidents and insurance policy, market and functions using companies, such as British Airways and EasyJet as examples....
4 Pages (1000 words) Essay

The Approaches a Non Financial Company

But still risk is an inevitable part of every business.... The risk for a new project includes the non-availability of funds, unrealized debtors, availability of The company plans its operations well in advance.... This means that the company is taking a risk.... Moreover the company is also subject to the risk of interest rate fluctuations.... This is called interest rate risk....
8 Pages (2000 words) Essay

Risk Management in Hospitality Industry

It is the function of management to adequately analyze the risk scenario and be prepared… This is necessary both for the organization itself and for the society in which it operates. Euro Disney, the joint venture between the US parent company Walt Disney and the French government had to face severe and unexpected financial This experience is of immense help to the management studies and the hospitality industry, particularly in these days of great emphasis on globalization and expanding service industry....
15 Pages (3750 words) Essay

How the Insurance Industry Deals with Problems of Risk Pooling and Risk Sharing

"How The Insurance industry Deals With Problems Of Risk Pooling And Risk Sharing" paper argues that the allocated risk of the pool should be consistent enough.... To be more specific, the risk that is allocated to a particular group does not necessarily depend on the level of performing the allocation.... hellip; When it comes to risk sharing or risk pooling of insurance, there exist a number of criteria that are to be satisfied in order for the risk allocation to be effective....
6 Pages (1500 words) Article

Insurance Industry in Europe and America

"Insurance industry in Europe and America" paper examines the various external forces affecting the insurance industry and brings out the effects it causes in the insurance industry.... The future of insurance industries, therefore, will depend on how it will deal with the world's fastest developing country and regulations that govern this industry.... he insurance industry has become fundamental to today's welfare because most of the developed economies, especially in Europe and America, have emerged to where they are without the existence of risks....
7 Pages (1750 words) Coursework

The Increase in the Emergent Occupational Heath Challenges

This discussion seeks to review the demographic, industrial structure and labour market changes that have occurred in the USA, with a view to assessing how such changes impacts on the occupational health of the country's workers.... An appraisal and discussion of the most appropriate strategies.... hellip; Occupational health refers to the status of the health of an individual, which is based on the kind of work that such an individual does....
15 Pages (3750 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us