Essay Instructions: Understanding and dealing with risk is essential in business today. The business environment, and indeed the world in general, is fraught with risks of all kinds. Being able to identify and prioritize these risks is paramount to successful management of an organization. The marketplace has always been an uncertain environment. But now, compound the normal business risks - do I have the right product, at the right price, for the right market? - with the ?new? risks of terrorism and unsavory business practices by large, and previously reputable companies, and you begin to realize how many factors the average business must anticipate and mitigate to operate safely and successfully. Please read the article below concerning the risks theme parks are taking, then answer the following questions.
What four risks and their specific consequences do theme parks face in today's market?
Are they High, Medium, or Low risks?
In a 4 page paper describe the risks the them parks face and explain the level of each risk.
Full Text:
The thrill is back.
With faster, scarier rides, Southern California theme parks are betting visitors will be too.
The region's amusement park industry, after suffering several years of declining attendance, is gearing up for the summer tourist season by opening new roller coaster attractions, some with elaborate special effects. Among the offerings: a jerky ride from atop a 183-foot-tall "haunted" hotel that will be the tallest structure at the Disneyland Resort and the fastest indoor roller coaster west of the Mississippi that zooms into total darkness at more than 45 mph.
"The theme park industry is extremely competitive now," said Dave Koontz, a spokesman for SeaWorld Adventure Park in San Diego, which is unveiling a watery roller coaster called Journey to Atlantis. "If you don't refresh your park every two to three years, it's very difficult in today's environment to retain your attendance base."
All told, Southern California parks have invested more than $150 million in their new attractions, creating hundreds of jobs, according to estimates from Amusement Business, a publication that tracks the industry.
"We're thrilled. It keeps the product 'California' always fresh and trendy in the minds of visitors," said Caroline Beteta, executive director of the state's Travel and Tourism Commission, which estimates that more than $75 billion in travel spending funnels into the state economy every year, supporting more than 1 million jobs and generating $5 billion in direct state and local tax revenue.
The new rides might lure more visitors and pump more money into the economy. Or they might not excite enough interest to make the money spent worth it.
When a park adds a multimillion-dollar attraction, "there's always risk," said James Zoltak, Amusement Business' senior editor in Los Angeles. "There's risk that you'll do it and you won't get the visitors you hoped," he said, "or that you won't do it and you'll have lackluster performance."
At Disney's California Adventure, the Twilight Zone Tower of Terror, a ride that starts in a service elevator atop the 13th floor of an abandoned Hollywood hotel, is the most expensive gamble at an estimated $60 million, according to Amusement Business. The Tower of Terror is slated to open May 5.
Also on tap for May is SeaWorld's Journey to Atlantis, the park's largest attraction in its 40-year history. Riders board eight- passenger Greek fishing boats for a voyage that tells the tale of Atlantis through simulated tremors and floods and also enjoy an underwater view of Commerson's dolphins, an exotic piebald-marked species of the mammal.
At Six Flags Hurricane Harbor in Valencia, the Tornado water slide also will open in May. In June, the high-speed, special- effects-laden Revenge of the Mummy roller coaster, based on "The Mummy" movies, will debut at Universal Studios Hollywood.
At Legoland California, which was forced to cut jobs and close on Tuesdays and Wednesdays after attendance sagged in 2002, summer will bring Coastersaurus, which will speed along at up to 18 mph in and around a jungle of Lego dinosaurs.
And in December, Knott's Berry Farm will launch the Silver Bullet, a roller coaster that loops six times.
Together, the parks are spending millions to promote their new rides, with new television, radio, print and billboard advertising beginning this month, analysts said. On May 4, for example, Disney will hold a media day for Tower of Terror and expects several hundred members of the press to attend.
The theme park companies declined to divulge how much they are spending on their latest projects.
Wall Street analysts who cover publicly traded theme park companies such as Cedar Fair, which owns Knotts Berry Farm in Buena Park, said it was in the best interest of the companies to keep adding new features, despite the expense.
Other parent companies of the theme parks, such as Walt Disney Co., owner of the Disneyland Resort, and Vivendi Universal, the global entertainment giant and parent of Universal Studios Hollywood, are all hoping for more profits from their theme parks.
In the last year, the stocks of Sandusky, Ohio-based Cedar Fair, Burbank-based Disney and Vivendi of France have all gained at least 50%.
Brett Petit, senior vice president of marketing for Charlotte, N.C.-based Paramount Park -- which recently opened the Borg Invasion attraction at its park in Las Vegas -- put it another way: "You want people to come back and so you need to have something new."
At Knott's, spokeswoman Susan Tierney said that was the reason for the Silver Bullet and other new attractions, including RipTide, a high-flying spinning thrill ride to open later this year. "We're a regional park, heavily dependent on the Southern California repeat business," she said. And there is a lot of competition in the region, she added. Theme parks "need to keep up with each other."
Visits to theme parks worldwide were down 1.5% in 2003, mostly due to poor weather, the economy and terrorism concerns, according to Amusement Business. Among the gainers last year were Universal Studios Japan, with 10% more traffic, and Disney's California Adventure in Anaheim, with a 13% uptick in visitors. After a big spending boom in the late 1990s, most parks cut back on heart- stopping thrill rides and went for more family-friendly and cost- effective rides, with slower speeds or seated experiences linked to movies such as Universal's "Shrek" 4-D movie ride.
But this year, it's back to the future.
"This is a very dark, very edgy experience," said Chuck Myers, a vice president at Paramount who helped craft the Borg Invasion in Las Vegas, a 20-minute encounter with the evil aliens made popular in "Star Trek." "People will feel the Borg touch them and almost feel as if they are breathing down their neck."
At Universal, Don Skeoch, a senior vice president of marketing, said he was hopeful the new Mummy ride would bring in more visitors.
Billed as the "world's first psychological thrill ride," the coaster uses special motors to propel 16 passenger mine cars through a third of a mile of curves, drops and sweeping turns. The ride tracks are filled with sand to minimize noise and the cars zip forward and backward. Four warrior mummies free-fall 20 feet in the air, nearly landing on the guests' heads.
Skeoch is unconcerned that other parks are promoting new rides, too.
"All boats will rise," he said. The investments will make "Southern California a more appealing destination for theme park visitors."
And a more expensive destination. Universal raised ticket prices this year by $2 in anticipation of higher demand. Adult ticket prices are $49, while children under 48 inches are $39 and children younger than 3 are free.
Like most parks, Universal offers special deals: If you purchase a one-day admission, you get a full-year's admission free, although there are blackout dates, such as weekends in July and August.
SeaWorld, owned by St. Louis-based Busch Entertainment Corp., has a similar deal with its "fun pass," which allows a visitor who pays full admission price, $51.95 for each adult and $42.95 for each child, by May 2 to come back for the rest of the year for free, except for blackout dates. Also included: a sneak preview to Journey to Atlantis.
At Disneyland until April 29, Southern California residents can visit both the main park and California Adventure for $47.
Executives at Disneyland aren't concerned about the number of competing new attractions opening in Southern California this summer, or about the amount of money spent on Tower of Terror.
"Theme parks need to open new rides. People expect it," said John McClintock, spokesman for Disneyland. "As Walt Disney once said, 'Disneyland will never be completed. There is no limit to imagination.' "
New Thrills, and Risk, for Theme Parks; Local attractions are betting millions on faster, scarier rides to draw guests
Debora Vrana. Los Angeles Times. Los Angeles, Calif.: Mar 21, 2004
