Current Search: theme parks -- business closure -- business failure analysis -- Events Approach (x)
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Title
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Business Closure in the North American Theme Park Industry: An Analysis of Causes.
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Creator
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Kaak, Kelly, Milman, Ady, Breiter Terry, Deborah, Mendez, Jesse, Schuckert, Markus, University of Central Florida
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Abstract / Description
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Prior to this study, no analysis had focused on the 31% failure rate recorded among theme parks opened in North American between the years 1955 and 2009. This study's purpose was to identify the causes of closures among the 23 failed theme parks and inform the industry of what can be learned from these business failures. Business failure analysis typically stresses the impact of financial ratios and the accuracy of certain negative numbers to predict impending failure, but such studies avoid...
Show morePrior to this study, no analysis had focused on the 31% failure rate recorded among theme parks opened in North American between the years 1955 and 2009. This study's purpose was to identify the causes of closures among the 23 failed theme parks and inform the industry of what can be learned from these business failures. Business failure analysis typically stresses the impact of financial ratios and the accuracy of certain negative numbers to predict impending failure, but such studies avoid examining the underlying causes that lead to poor financial performance in the first place. To focus on this question, this study adopted an events approach to discover the actual event causes that preceded failure and business closure. This study tabulated the frequency of event occurrences among two samples: failed/closed theme parks and a comparable sample of surviving theme parks. Event occurrences were more common among the failed/closed sample than among the surviving theme parks sample. A detailed analysis revealed that six of the 21 events measured were more common among the failed/closed theme park sample: declaring bankruptcy; excessive debt or general unprofitability; low customer satisfaction, defined as not offering enough to do in the park and/or inadequate capacity; development pressures; limited space for expansion; and a location in a regional geographic market. Theme parks failed more frequently due to involuntary event causes than due to voluntary closures. And, in contrast to previous studies, the occurrences of internal environmental events associated with business failure were not significantly different from the occurrences of external environmental events associated with failure. These findings identified events that have preceded failure or closure in theme parks and can provide insights to operators and industry decision makers on how best to prevent or better manage such business closures in the future.
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Date Issued
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2018
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Identifier
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CFE0007026, ucf:52030
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Format
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Document (PDF)
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PURL
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http://purl.flvc.org/ucf/fd/CFE0007026
