Do building expansions for cultural organizations that are less than 10 years old affect attendance more than expansions for more established entities? Here’s the data.
At IMPACTS, we track the attendance outcomes of various cultural organizations that have pursued major building expansion projects in an effort to understand how people react to them and how they motivate the visitation decision process.
We have worked with several organizations contemplating major projects since 2005, with costs ranging from $1.8 million (for a medium-sized special exhibit) to upwards of $500 million (for a new building). Some of these organizations include the California Academy of Sciences, the Monterey Bay Aquarium, Exploratorium, Carnegie Museums, the Tennessee Aquarium, and the Naples Botanical Garden, among others. Sometimes our greatest value in market testing these projects isn’t in “green-lighting” them, but also in grounding the reality that these expansions often aren’t reliably the one-stop, “build it and all will come” magic bullet some leaders often hope they will be.
We’ve published data on the trendline we see when cultural organizations that have been in business for ten years or longer open a major expansion project. We can cut this data for certain organization types and sizes. But what about the trendline for organizations that were NOT in business for ten years prior to opening an expansion project? To see if and how things might be different, we’ll need to look at a different set of organizations: entities that opened their expansion projects five to ten years after opening. Today, we’ll do just that.
Post-expansion attendance for established organizations
Before we examine attendance bumps for newer organizations, let’s revisit our previously published data on attendance trends after major expansion projects for organizations ten years or older at the time of their opening. IMPACTS tracked attendance to 11 visitor-serving organizations that completed significant expansion projects between years 2003-2011. Each of the assessed organizations had been in business for at least ten years before opening their new expansion. The average project cost was $43.6 million. Here’s what we found.
You can dive deeper into the data and what’s happening here. If you’re considering an expansion project, we suggest that you watch the video above and check out the article. Established cultural organizations generally experience a major attendance bump after a building expansion, but visitation returns to baseline at five years on average.
The first column in the above chart shows the average, aggregated annual attendance to these eleven cultural organizations expressed as an index value with the 10-year period preceding the opening of the new expansion quantified as 100.0. This number is our baseline. This way we can compare and consider the impacts for the organizations evenly by considering percent increase, even though they each have different respective attendance levels.
You’ll notice that in the five-year duration preceding the opening of the expansions, annual attendance declined on average by 5.2%. When they undergo an expansion project, organizations tend to forget that visitation often drops during this time for two important reasons. First, construction tends to lower visitor satisfaction and thus decreases the volume of glowing endorsements that an organization receives. Second, during this period, potential attendees are more likely to defer their visits until after the expansion opens. Why visit now when they can come back later and see the cool, new expansion?
When some organizations consider the “cost” of an expansion project, they overlook some of the opportunity cost. Construction isn’t the only way to lose word of mouth endorsements and incur negative visitation impacts – the opportunity cost is also a major reason why organizations underestimate attendance loss resulting from unforeseen closures due to weather, facility rentals, or civil unrest.
And then the expansion opens! During the first full year of operation, organizations saw an average increase in visitation of 19.6% compared to the average of the 10 years prior. That’s huge! But it doesn’t last. At five years out, the organizations’ attendance had only increased 1.4% – essentially returning to the baseline condition.
Just because an organization builds more space doesn’t mean folks will be there forever to fill it. Increasing long-term attendance to cultural organizations involves alleviating data-informed barriers to visitation. These often include things like better establishing ongoing relevance for potential visitors, overcoming the perceived hassle of traveling there, or just being open during times when someone is at work or school and cannot attend. An expansion project, in and of itself, doesn’t generally fix these issues.
Post-expansion attendance for organizations with less than ten years of operating history
But what about younger organizations? They’re moving! They’re shaking! They’re new and exciting (hopefully)! Perhaps these entities generally have better luck with sustaining the post-expansion attendance bump?
The chart below contemplates five organizations that opened completed expansions within ten years of their opening. All five entities had been open for five years by the time the expansion opened. The minimum total reported project cost contemplated in this set is $6.5 million, and the maximum is a project for $78 million. Take a look at the findings:
There are two things you’ll notice immediately compared to the data on expansions for the eleven more established organizations. First, the attendance bump upon opening is generally much smaller than seen for the more established organizations (7.2% attendance increase vs. 19.6% increase on average for the more established entities).
Second, attendance still reaches baseline at year five, on average.
What factors contribute to a smaller attendance bump for newer organizations?
1) It takes time for organizations to find their market and engender trial
Entities that have been open for less than ten years may still be in the process of establishing themselves, securing valuable word of mouth, and succeeding in the fierce competition of how people choose to spend their precious leisure time. It’s often too early to have a reliable baseline understanding of attendance and market penetration – the entity is often still doing this work and things are still changing!
As you can see, the “preceding 5 years” constitutes a baseline in this data set, but it may include the year of the organization’s opening – often an anomaly in terms of attendance. Because the first few years of an organization’s opening may have yet to find footing in terms of more consistent attendance, we aren’t able to reliably assess the pre-expansion opportunity cost of decreased attendance in the years prior to the expansion opening. The immediately preceding years for these young organizations tend to have too many variables. New programs that never existed are rolling out! People are still hearing about the new entity and assessing if they should attend!
A big reason why the attendance bump is lower in some cases is that the cultural organization is not fully “trialed” and the market has not often adopted the initial offering yet, let alone had want for an expansion.
2) If the expansion addresses a deficiency, trust may already be eroded
Let’s say that the expansion aims to address a deficiency in the original experience. Perhaps the space was too dark and off-putting, but now the entity is making it light and airy? Perhaps the layout was confusing and distracted people from great content? One might think that a fix would bring scores of folks through the door. After all, the entity is fixing the problem – and it’s still new!
If folks already attended and had a less-than-optimal experience, then they are less likely to return or to endorse the organization. If an entity proved that it couldn’t be trusted to deliver a satisfying experience on the first go-round with opening publicity, can it be trusted to deliver a satisfying correction? Is it worthy of another precious day that could be otherwise spent at the park, the beach, hiking, taking a long lunch, visiting a different attraction, or just enjoying the wonders of Ben Platt in The Politician on Netflix?
In looking at case studies, it seems people may be less responsive to proposed “solutions” for newer entities. Organizations do not as easily get extra feet in the door for finally delivering on an original promise of a satisfying experience. This doesn’t mean solutions are a bad idea! Correcting deficiencies is a good idea! However, it often results in less of an immediate attendance bump. This kind of expansion may indeed help in the long run in a more sustainable way instead. Or at least, more than if the deficiency wasn’t corrected.
3) Expansions that are part of publicized “phasing” often experience smaller attendance bumps
This may be less surprising. If the expansion is part of intentional phasing (opening a series of expansions and related projects), then the organization may not gets much “foot credit” for merely fulfilling the promise of completing the ongoing project or its phases. This is especially true if an organization promoted the total project – including phases – during the fundraising process.
In this situation, people know and are familiar with the project. Thus, completing a second phase is not necessarily considered a “new” thing. It’s more akin to meeting delivery expectations of a bigger roll-out. This is different than a single, major expansion for an established organization. In that case, the project itself is the focus of the grand reveal, rather than part of a longer phased process.
This isn’t to say that phased projects don’t experience visitation bumps (they often do), or that phased projects shouldn’t be completed (they certainly should)! It’s simply to say we see that these kinds of phased expansions for newer entities function differently than singular projects for established ones. This contributes to differences in the data.
Expansion projects can be a good idea – when the long-term focus isn’t the expansion itself, but what the expansion may accomplish based on how the space is used. An expansion creates more room. Why does your organization need it? Can you use the space to reach new audiences, diversify the experience, or alleviate barriers to attending? The bump in visitation after a major expansion isn’t likely to stick around, but the impacts of how an entity uses the space can help it to continue to evolve to meet ongoing needs.
In order to yield payoff, it may be beneficial to consider how a project or initiative removes barriers to engagement – and that means knowing enough about your audience to understand why they may not visit in the first place.
Considering an expansion? Next week we’ll share key steps to inform your thinking for our experience conducting feasibility studies and working with various cultural entities considering such projects. Sign up here to receive weekly emails so you don’t miss it!