Annual attendance projections for 2021 have improved for some organization types since the start of this year, but not by as much as some leaders may hope.
Here’s the current condition and outlook as of July 2021 for both exhibit and performance-based organizations.
Strap on your nerdy seatbelts, folks. Things are about to get math-y in pursuit of realistic attendance expectations mindful of the ever-evolving conditions concerning the coronavirus.
We’ve been hearing a bit of discussion about the concept of “revenge travel,” which is the idea that there is (and will be) a huge increase in travel in response to being cooped up for over a year. To this end, IMPACTS Experience has been asked by several leaders if we may share an update to January’s 2021 attendance projections. After all, the United States was arguably around the height of the pandemic at the start of the year and predictive models are reflections of the inputs surrounding the then-current conditions. With this in mind, have things changed since the beginning of the year?
What is a market potential analysis?
Market potential for cultural enterprise is a modeled measure of the size of the market for these experiences at a specific time. It is the product of modeling robust data relating to the US public’s attitudes, perceptions, and behaviors that leverages models of both the market and the experiences offered to the public by cultural organizations. The outputs of the simulated interactions between these models during a defined duration are quantified to produce a data-informed attendance forecast.
For this article – just as we did at the start of 2021 – we’re considering market potential in terms of onsite attendance numbers (i.e., volume of visitation). The research in this article provides a benchmark for the overall market potential for both US exhibit-based (museums, zoos, aquariums, historic sites, botanic gardens, etc.) and performance-based entities (symphonies, theaters, ballets, operas, etc.) in order to provide a sense of realistic expectations.
Typically, market potential assessments are developed for a specific organization. The research in this article, however, is a composite intended to provide a broad direction for the cultural sector as a whole, rather than the exact numbers for any individual organization. For example, a zoo in Texas likely has a different market potential than a children’s museum in Los Angeles, even though they are both included in the “exhibit-based” category in this research. To better understand your own organization’s specific attendance projections, you’ll need a more individualized analysis. We can help you with that.
How has projected attendance changed since the start of the year for exhibit-based organizations?
In this article, the research contemplates the combined aggregate market potential for exhibit-based organizations such as zoos, aquariums, museums, botanic gardens, historic sites, etc.
In January 2021, the United States was arguably at the height of the pandemic. We had a different president. Many cities and regions were still largely staying home. While a vaccine had been recently approved for use, its availability was very limited. And many cultural entities were still closed or had significantly restricted attendance. All of these factors influenced the market’s attitudes and plans earlier this year. All considered, audiences were very much in a wait-and-see mode, and uncertainty ruled the day. Collectively, the combination of these factors suggested a market potential projection for year 2021 totaling 72.2% of year 2019 attendance.
But conditions have evolved since early January 2021, and the market indicates beliefs that it is operating with more complete information. Vaccines are more broadly available, our world has largely reopened with fewer capacity constraints and limitations, and people are resuming their more typical behaviors. These evolving factors impact market potential. Consider the below update to market potential quantified as of July 2021:
Market potential for 2021 for exhibit-based organizations (museums, zoos, aquariums, historic sites, botanic gardens, etc.) has increased from 72.2% of 2019 attendance levels as projected in early January 2021 to 77.2% of 2019 attendance levels as of mid-July 2021. The outlook for the year has improved, but perhaps not as much as leaders banking on a strong “revenge travel” upsurge throughout the year would like.
The vaccination rate for eligible people has massively increased, and this has fundamentally changed the US public’s perceptions and behaviors concerning their leisure activities. For comparative context, on January 11 approximately 9 million people in the US had received at least one dose of the COVID-19 vaccine. At the time of this writing, more than 338 million vaccine doses have been administered.
The biggest change impacting year 2021 market potential occurred during the second quarter (“Q2”) of the year – which coincided with the largest increase in vaccine distribution, eligibility, and availability we’re likely to see this year. Thankfully, quarterly market potential is expected to keep improving for exhibit-based organizations.
Note that the indicated July 2021 numbers for Q1 and Q2 are actual results.
While many items contribute to the data modeling, two underlying factors about the then-future (as of January 2021) are worthy of attention in this particular analysis. One is the presumed rollout of an effective vaccination in 2021, and another is the knowledge that we did (and do) observe a measure of pent-up demand for cultural activities. Rest assured, these things were factored into the January models given people’s plans around timelines and vaccination expectations at that time.
In addition to factors relating to the vaccine, research suggests that three other factors prominently influenced our audiences’ plans in Q2 2021 – each of which is likely more limited in the duration of its impact:
1) Increasing home values and low interest rates have given Americans who are likely to visit cultural organizations more access to capital to support their preferred leisure activities.
Let’s talk about broad economic factors. The Federal Reserve reports that low interest rate policies – combined with vaccinations – are playing a major role in aiding American recovery from the coronavirus pandemic right now. Not only that, Americans have more home equity than ever. The US housing market recently witnessed record valuation increases which, when coupled with historically low interest rates, has created a record high in US consumer home equity availability. This ready access to relatively inexpensive credit has contributed to the market’s ability to afford travel and vacation activities. In turn, we have observed cost-related factors decline for many of our high-propensity visitors when identifying barriers to their travel-planning endeavors. However, while access to home equity and other inexpensive credit tools tends to support discretionary leisure activities, these bills eventually do come due! An engagement strategy that depends on continuing increases in property valuations and easy access to credit markets is probably not sustainable.
2) Government-funded stimulus programs have effectively subsidized leisure activities for many high-propensity visitors.
This article is not about social welfare policies. However, the impact of these policies is important for many organizations to contemplate, especially those who risk mistakenly considering the phenomenon of “revenge travel” as an ongoing factor to boost their future performance. Between the recently authorized appropriations and American Rescue Plan, a couple earning less than $160,000 annually (and this is the majority of Americans) with two children would have received a total of $8,000. As a result, we’re starting to observe survey respondents making comments along the lines of “Joe Biden paid for our vacation to Hawaii.” (We’re not being glib. People are actually saying things like this in our data collection.) Of course, these funds were lifelines for many, many Americans. At the same time, it is important to recognize that high-propensity visitors to cultural organizations represent a subset of the overall population. While most everyone appreciates additional resources, some people may use them for more essential needs while others may have the privilege of applying the funds to leisure pursuits. Regardless, organizations would be wise to recognize the influx of stimulus funds to many of our audiences as an extraordinary event – and not necessarily something that we should rely on going forward as a factor influencing our audiences’ future travel plans.
3) Exhibit-based organizations are benefiting from redistribution of demand.
We still see that people are more likely to choose to visit an outdoor zoo than an indoor theater performance. Competition is lessened for exhibit-based organizations because feelings of safety have not kept pace for select indoor activities such as movie theaters and performing arts organizations. Although many museums, zoos, aquariums, botanical gardens, etc. have already reopened (or are in the process of soon reopening), many performance-based organizations remained closed or significantly capacity-constrained. As the year progressed through Q2 2021, people interested in cultural activities – but not necessarily a specific cultural activity – were able to “scratch their cultural itch” at a museum (or zoo, aquarium, etc.) at the likely expense of other activities perceived as being less safe or which simply had not yet resumed the same level of programming as in past years.
This said, it should be noted that both Q3 and Q4 already portend even better results than Q2. By Q4, based on current perceptions and conditions, the market potential model suggests that attendance will recover to 95.3% of historic levels. Obviously, this is a significant improvement over the 77.8% of 2019 attendance observed in Q2 2021, but the percentage increase for Q3 and Q4 from the January projections is less dramatic.
How has projected attendance changed since the start of the year for performance-based organizations?
In this article, the research contemplates the combined aggregate market potential for performance-based organizations such as symphonies, theaters, ballets, and other dance performance entities, etc.
Market potential has not changed significantly for performance-based organizations compared to January projections, and it only slightly lowered for performance-based organizations in terms of annual outlook.
Please, performance-based leaders, do not stress about a modeled market potential decrease in the 2% range for the aggregated industry – particularly in a time of continuing disruption for your programs. Just don’t do it to yourself. From a data and modeling standpoint, a 2% movement is relatively insignificant. We will continue to watch demand for performance-based entities and see if any unforeseen factors arise in the coming months. However, January’s projections are still fairly accurate as of July for the industry on the whole. Instead of stressing about this 2% decrease, we recommend that you focus instead on making sure that your symphony, theater, ballet, opera, or other organization maximizes its potential so as to beat the benchmark.
Note that July 2021 numbers for Q1 and Q2 are actual results.
Again, we see that the breakdown by quarter remains very close to January projections. Economic-related factors that positively influenced Q1 and Q2 2021 for exhibit-based organizations didn’t indicate the same benefit for performance-based organizations. Many exhibit-based organizations have been able to move closer to “business as usual” in the second quarter compared to performance-based entities. We’re still observing a notable measure of general trepidation in returning to stationary activities, particularly those which take place indoors. Thus, exhibit-based entities returning to regular programming and perceived to allow for freedom of movement reaped the benefits of Q2’s unforeseen economic factors, while performance-based organizations did not (comparatively).
Could this change – and get worse due to the Delta variant?
Yes, it could. Or maybe it won’t. We’ll have to see the extent of its impact on intentions to visit cultural organizations and if it’s enough to impact the attendance forecasts. The same is true for additional stimulus or economic factors that are currently unforeseen at this particular time but may also happen.
As you’ve observed, pent-up demand + vaccinations + more confidence in the economy = a better Q2 than was anticipated as of the start of the year for exhibit-based organizations. We’ll gladly take it!
Hang in there, performance-based entities. The struggle is ongoing, but the creativity, innovation, experimentation, and connection spearheaded by your leadership while faced with these challenges continues to be inspiring.
Most importantly, market potential for cultural organizations continues to move in the right direction on the whole by quarter. That’s a win.
IMPACTS Experience provides data for the world’s leading organizations through workshops, keynote presentations, webinars, and data services such as pricing recommendations, market potential analyses, concept testing, and Awareness, Attitude, and Usage studies. Learn more.
We publish new national data and analysis every other Wednesday. Don’t want to miss an update? Subscribe here to get the most recent data and analysis in your inbox.