This document summarizes Christopher Peak's dissertation defense examining the relationship between macroeconomic trends and regional theme park performance. The study found correlations between certain macroeconomic indicators (debt as a percentage of GDP and interest rates) and revenue performance at Cedar Fair parks. It also found correlations between consumer confidence, stock market values, interest rates, unemployment rates, and revenue performance at Six Flags parks. The study concluded that specific macroeconomic indicators can predict future regional theme park revenue but not attendance due to lack of monthly data. It recommended regional theme parks utilize indicators like debt, interest rates, and consumer confidence to inform strategies.
2. Agenda
Introduction
Statement of the Problem
Findings from Literature
Methodology
Results
Implications
Conclusion
Recommendations
3. Introduction
• Consumer spending is a highly-researched topic and has been evaluated by
multiple industries
• With consumer spending accounting for more than half of the gross
domestic product in the United States, understanding the impact of the
consumer confidence index, stock market values, interest rates,
unemployment rates, and the consumer credit index on spending trends is
crucial to predicting reactions from changing macroeconomic conditions
• Understanding the impact of these macroeconomic trends on consumer
spending is vital for policymakers and business leaders alike, especially in
times of shifting macroeconomic conditions where swift decisions need to be
made.
4. Statement of the Problem
• Downturns in macroeconomic trends have historically
been followed by decreases in consumer spending
• Researchers have demonstrated the effects of
macroeconomic downturns on consumer spending in retail
industries, when metrics like consumer confidence,
interest rates, unemployment rates, stock market values,
and consumer credit index decline
• Regional theme parks are separate from other retail, travel
and tourism destinations because unique variables related
to the businesses characteristics, goals, and revenue
drivers that differ from typical retail and destination
locations
5. Statement of the Problem (continued)
• Although there is research on the impacts of macroeconomic trends
in relationship to various industries, there is no current information
on how changes in macroeconomic trends impact regional theme
park attendance and overall revenue results
• This lack of information impedes the industry’s ability to develop
strategies to combat changes in consumer behaviors at regional
theme parks when macroeconomics trends shift
• If this research is not done, regional theme parks will not know how
to plan for and react properly to changing macroeconomic
conditions, and would most likely underperform due to this inability
6. Methodology
• A non-experimental quantitative method of inquiry, correlation design utilizing ex
post facto quantitative research was used to understand how the consumer
confidence index, stock market values, interest rates, unemployment rates, and
the consumer credit index impacted regional theme park attendance and revenue
performance
• The data gathered used publicly distributed records for all variables
• With the data gathered from verified public sources, no issues related to data
quality or completeness was present
7. Methodology
(continued)
• The interval values of regional theme park attendance and revenue performance
were used as the dependent variables to understand how the consumer
confidence index, stock market values, interest rates, unemployment rates, and
the consumer credit index impacted regional theme park performance
• The independent variables that consisted of the consumer confidence index, stock
market values, interest rates, unemployment rates, and the consumer credit index
were also interval values
8. Methodology
(continued)
• The exact population for this study was Six Flags and Cedar Fair Entertainment
• These two corporations consisting of thirty-three regional theme parks were
selected based on their representation of approximately sixty-six percent of the
regional theme park industry across the United States
• The closest competitor to these two companies operated six locations in five
states, with other industry participants falling well below these totals
9. Findings from Literature
(Theory of Planned Behavior)
• Research has concluded that in some instances, rational behavior is overruled by one’s
desires related to a product or activity. To better understand these occurrences, the theory
of planned behavior is used to evaluate the influence of consumers’ knowledge, beliefs, and
feelings related to a product
• Research related to the theory indicated four main factors that drove consumers to behave
in a certain way. These factors included commitment and perceived importance,
consumption and entertainment, attendance and discover, and joining others
• Another study utilizing the theory of planned behavior examining a product that was
consumed in public noted cultural norms and social benefits as the largest two impacts on
decision making, with attitudes related to the products quality, taste, and health benefits
coming in third
10. Findings from Literature
(Consumer Spending)
• Recent research determined that interest rates, annual inflation, annual earnings increases, and
mortgage rates affect consumer spending in the most direct manner
• Macroeconomic indicators including consumer confidence, stock market values, unemployment rates,
and the consumer credit index have also been shown to impact consumer spending
• Other research evaluated consumers’ intent to change spending patterns during times of economic
change using the theory of planned behavior
• During times of financial crisis, consumers’ attitudes had a significant impact on their decision to move
money
• When consumers are threatened by stressful situations or environments, they use their spending to
take back control
11. Findings from Literature
(Regional Theme Parks)
• Regional theme parks are designed to attract consumers that want to spend a specific amount of time in an environment that
creates surroundings of enjoyment and new experiences
• Consumer spending is a key component to the success of the regional theme park industry. Information related to factors that may
increase or decrease consumer spending is quite valuable to the regional theme park industry due to the impact of consumer
spending on the industry’s attendance and revenue performance totals
• Many consider attendance at an amusement park to be a luxury item or event with culture, values, attitudes, and cultural behaviors
being identified as influences on consumers’ behavior patterns when considering luxury items
• Said another way, a positive or negative attitude toward a product or company may be the deciding factor related to consumer
purchases of luxury items regardless of the product being sold
• The study also concluded that a consumer’s ease in performing the purchase was also a driving factor in the decision process. If
income levels are a deterrent to purchasing goods, marketing or financing activities need to be in place to overcome this obstacle
12. Findings from Literature
(Consumer Confidence)
• Consumer confidence is typically defined as the likelihood that consumer spending is to be relatively strong
or relatively weak among consumers in the general population of an economy
• Research indicated high correlation between the consumer confidence index and household spending.
Another study connected increased consumer spending with just the expectation of financial increase with
consumers spending more as their confidence levels increased through an expectation of future financial
security before they had the money in hand
• The impact of consumer confidence on consumer spending was recently evaluated across specific sectors
including durable goods, semi-durable goods, and nondurable goods.
• The research concluded that analyzing these specific sectors would have given greater predictive ability
during the timeframe analyzed. With the exclusion of auto purchases, the durable goods category would
have seen the greatest impact
13. Findings from Literature
(Stock Market Values)
• While at a first glance, the stock market values may seem like a point of interest for only the wealthy, current research has proven
the connection between the stock market and total consumer spending
• A recent study found that with every unit of change in the business confidence level the stock market also increased one and a half
percent. When consumer confidence levels change by one unit, the stock market has an even greater response, increasing by over
four percent
• Consumers also see the stock market as a leading indicator of future economic activity, thus giving the consumer the expectation of
financial growth or decline. Research indicated a decline in consumer investments during downshifts in the stock market as an
initial reaction, further enhancing the connection between consumer spending and stock market values
• Previous generations used the ability of the dollar to convert into a metal, and the value associated with this conversion as their
basis of the dollar’s worth. In contrast, the current generations view the stock market and other macroeconomic factors as their
guidance on the dollars worth
• Research also indicated a stronger response from consumers related to negative trends versus positive trends in the stock market
14. Findings from Literature
(Interest Rates)
• While interest rates and consumer spending have not been directly linked as they relate to everyday purchases,
research has shown a direct relationship between interest rates and large ticket purchases, including automobiles
and homes. The trickle-down effect of these large ticket items has also been directly linked to overall consumer
spending
• Another recent study indicated that as interest rates lifted, or were predicted to increase, both cyclical and planned
spending were shown to decrease
• Rising interest rates also created lower future expectations causing an increase in the likelihood of decreased
spending on larger ticket items, driving the overall spending total down across the board if interest rates do not
increase
• In contradiction to other studies, a recent study noted that during the most recent economic recovery, lower interest
rates have driven only modest increases in spending on durable goods. The items included in the durable
segment consisted of residential investments, vehicles, recreational goods, and household goods
15. Findings from Literature
(Employment Rates)
• Research has shown that as employment rates decline, consumer spending will soon follow with a lack of jobs in an
economy leading to foreclosures, homelessness, and bankruptcies
• These situations obviously decrease the amount of spending from the individuals involved, but also affect the spending
and investment capabilities of the landlords and banks holding the loans for the homeowners
• Other studies have shown that consumers have been able to sustain a consistent level of spending, even during times of
declining employment rate due to a lack of consumers’ motivation to change consumption habits during times of
unemployment
• These consumers used savings or acquired help from friends and family to sustain their current spending habits during
employment difficulties and when unemployment benefits were expanded, so were spending levels above their normal
levels
• While short term spending trends were upheld due to this practice, long term spending was decreased due to higher levels
of debt and reduced savings
16. Findings from Literature
(Consumer Confidence Index)
• As a direct input into the amount of income that is available for consumers to spend, the consumer
credit index, or the availability of credit or loans within the United States economy is a driving factor
within research around consumer spending
• Current studies found that credit limits were a deciding factor for consumers when purchasing a home,
and sometimes a factor for everyday items. A lack of self-control is evident concluding that many
consumers use credit card companies and mortgage lenders to set the spending limits that to which
they adhere. As more controls have been implemented to control debt levels, overall spending levels
have been negatively impacted
• Households with increased levels of debt have shown lower levels of spending versus households
with smaller amounts of debt. While increased levels of credit spurred short-term spending, in the
long run, consumer spending was impeded by higher levels of debt
17. Results
• A linear regression model used to evaluate the relationship between the five
predictive variables (consumer confidence index, stock market values, interest
rates, unemployment rates, and the consumer credit index) and attendance at both
Cedar Fair theme parks and Six Flags reflected no correlation between the
variables
• This same model was used to evaluate the relationship between the five predictive
variables (consumer confidence index, stock market values, interest rates,
unemployment rates, and the consumer credit index) and revenue at Cedar Fair
theme parks along with Six Flags
• While all five independent variables did not show a combined correlation to the
revenue performance at each corporations locations, specific independent
variables did show correlation to revenue performance at both six Flags and Cedar
Fair theme parks
18. Results
(Cedar Fair Entertainment)
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .589a
.347 .165 .205760802000000
2 .581b
.337 .198 .201691234000000
3 .554c
.306 .202 .201133902000000
4 .513d
.263 .193 .202277656000000
5 .450e
.202 .166 .205661120000000
a. Predictors: (Constant), CCI B/W%, Stock B/W%, Debt % of GDP B/W%, Interest Rate B/W%, Unemployment
B/W%
b. Predictors: (Constant), CCI B/W%, Stock B/W%, Debt % of GDP B/W%, Interest Rate B/W%
c. Predictors: (Constant), CCI B/W%, Debt % of GDP B/W%, Interest Rate B/W%
d. Predictors: (Constant), Debt % of GDP B/W%, Interest Rate B/W%
e. Predictors: (Constant), Debt % of GDP B/W%
• With model four providing significance and the largest Adjusted R Squared value, the combination of
debt as a percentage of GDP combined with interest rate increases explained 19.3% of the variance
related to Cedar Fair Parks revenue performance
• While multiple variables outside of the study may have impacted the results during this timeframe, a
correlation between debt as a percentage of GDP combined with interest rate increases and revenue
performance at Cedar Fair parks was established
19. Results
(Six Flags)
• With model two providing significance and the largest Adjusted R Squared value, all independent variables
excluding debt as a percentage of GDP explained 33.5% of the variance
• While multiple variables outside of the study may have impacted the results during this timeframe, a correlation
between all five independent variables excluding debt as a percentage of GDP and revenue performance at Six
Flags parks was established
Model Summary
Model R R Square Adjusted R Square Std. Error of the Estimate
1 .683a .467 .319 .094753103100000
2 .671b .451 .335 .093614750400000
3 .636c .404 .315 .095025008400000
4 .598d
.358 .297 .096267823900000
5 .524e
.274 .241 .100000288000000
a. Predictors: (Constant), CCI B/W%, Stock B/W%, Debt % of GDP B/W%, Interest Rate B/W%, Unemployment
B/W%
b. Predictors: (Constant), CCI B/W%, Stock B/W%, Interest Rate B/W%, Unemployment B/W%
c. Predictors: (Constant), CCI B/W%, Stock B/W%, Unemployment B/W%
d. Predictors: (Constant), Stock B/W%, Unemployment B/W%
e. Predictors: (Constant), Stock B/W%
20. Results
(Correlations)
• The inter-item correlation between most of the independent
variables was not significant apart from three sets
• Using the 2-tailed correlation factor, unemployment percentage and
debt as a percentage of GDP had a strong covariance
• Unemployment percentage and interest rates both had a strong
covariance between themselves and consumer confidence as well
• With more than one predictive variable showing covariance with
another predictive variable, the null hypothesis that no covariance
existed was rejected
Correlations
Debt % of
GDP B/W%
Unemployme
nt B/W%
Interest Rate
B/W%
Stock
B/W% CCI B/W%
Debt % of GDP
B/W%
Pearson
Correlation
1 .607**
-.362 .079 -.251
Sig. (2-tailed) .002 .083 .715 .236
N 24 24 24 24 24
Unemployment
B/W%
Pearson
Correlation
.607**
1 -.142 .008 -.508*
Sig. (2-tailed) .002 .507 .972 .011
N 24 24 24 24 24
Interest Rate B/W% Pearson
Correlation
-.362 -.142 1 .043 .502*
Sig. (2-tailed) .083 .507 .843 .013
N 24 24 24 24 24
Stock B/W% Pearson
Correlation
.079 .008 .043 1 .036
Sig. (2-tailed) .715 .972 .843 .869
N 24 24 24 24 24
CCI B/W% Pearson
Correlation
-.251 -.508*
.502*
.036 1
Sig. (2-tailed) .236 .011 .013 .869
N 24 24 24 24 24
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
21. Implications
• A correlation between the independent variables debt as a percentage of GDP and
interest rates in relation to revenue performance at Cedar Fair parks exists. These
findings are consistent with previous research indicating that as a direct input into
the amount of income that is available for consumers to spend, the consumer
credit index, or the availability of credit is a driving factor of consumer spending
• Results also aligned with previous research indicating that while decreases in
interest rates did encourage future planned spending, it was not a driver for
increased spending on a day to day basis for Cedar Fair Guests
22. Implications
(continued)
• These conclusions aligned with previous research indicating that the theory of
planned behavior also indicated the same trends, concluding that attitudes that are
influenced in the short-term drive decision making for Six Flags guests
• It also indicated that Six Flags guests saw stock market trends as a leading
indicator of future economic activity, thus giving the consumer the expectation of
financial growth or decline
• This data also indicated that day to day consumer spending is very tied to
consumer confidence with decreases in interest rates doing the opposite by
encouraging future planned spending while not driving increased spending on a
day to day basis
23. Conclusion
#1: Since both companies do not provide attendance data on a monthly basis, the use
of macroeconomic indicators to predict attendance at regional theme parks is restricted
#2: Specific macroeconomic indicators can be used to predict future regional theme
park revenue performance
#3: Specific macroeconomic indicators had intra correlations that must be considered
during research. Further research could be conducted to find other macroeconomic
variables that impact regional theme park performance
#4: The study contributed to the theory of planned behavior by presenting a correlation
between macroeconomic indicators and consumers future spend with regional theme
parks across the United States
24. Recommendations
• Regional theme parks should utilize specific macroeconomic indicators to predict
future performance at their locations. With full access to the attendance data,
along with other internal factors, regional theme park operators should be better
equipped to plan resources over the short and long run using this process
• A clean look at the data with the external factors eliminated from the study like
weather, time of year, capital investments, and one off impacts could provide
exponential amounts of useful information if used correctly
