The Economics of Everyday Things: Episode 91 - Roller Coasters

Introduction

In Episode 91 of The Economics of Everyday Things, host Zachary Crockett delves into the thrilling world of roller coasters, exploring not just the exhilarating experiences they offer but also the intricate economics behind their creation and maintenance. Through insightful interviews with industry experts like Cory Kiepert, an engineer and partner at the Gravity Group, and Dennis Spiegel, founder of International Theme Park Services, the episode unpacks the significant investments theme parks make in roller coasters and the returns they seek from these monumental attractions.

Cory Kiepert: Crafting Wooden Wonders

Growing Up with Coasters

Zachary Crockett introduces listeners to Cory Kiepert, a passionate roller coaster enthusiast whose fascination began in his childhood in Detroit. Kiepert's mechanical curiosity led him to dismantle household items and even build a miniature theme park from cereal boxes in his brother's closet. This early passion culminated in his involvement with the American Coaster Enthusiasts and ultimately inspired him to pursue a career in roller coaster design.

Cory Kiepert [03:55]: "I really want to do that, and someone has to do it. Why can't it be me?"

Establishing the Gravity Group

After earning a master's degree in mechanical engineering, Kiepert co-founded the Gravity Group in 2002. Over two decades, his firm has designed 30 new roller coasters, all crafted from wood—a choice that distinguishes his creations in an industry dominated by steel tracks.

Cory Kiepert [04:24]: "I think that there's just something magical about wood... Rides that are over 100 years old... they're still relevant today."

The Roller Coaster Design Process

From Concept to Creation

Designing a roller coaster is a multifaceted endeavor involving designers, accountants, construction crews, and engineers. Kiepert explains that the process begins with understanding the theme park's vision and clientele. Using advanced computer software, Gravity Group simulates roller coaster designs, ensuring they meet both safety standards and the desired thrill factor.

Cory Kiepert [08:07]: "We put together a couple ride concepts and see where it goes."

Engineering Precision

The design relies heavily on physics, particularly concepts like potential and kinetic energy, gravity, and centripetal acceleration. Kiepert emphasizes the importance of balancing safety with excitement, ensuring that each coaster delivers a thrilling experience without compromising rider safety.

Cory Kiepert [08:58]: "A lot of roller coaster design is just basic physics... manipulating that [centripetal acceleration] has a lot to do with when you're going through your curves."

Construction Innovations

Traditionally, roller coaster tracks were assembled onsite, often manually cut and shaped. Today, Gravity Group utilizes precision manufacturing in warehouses, producing track segments that are then shipped and assembled by specialized field crews. This modern approach increases efficiency and accuracy in construction.

Cory Kiepert [11:10]: "It's like sending a Lego set where there are all these different pieces, and then we have drawings on how to put it all together."

Economics of Building Roller Coasters

Investment and Returns

Building a roller coaster is a significant financial commitment for any theme park. Initial investments can range from a few million to upwards of $50 million for top-tier steel coasters. The Gravity Group highlights that the right coaster can recoup its costs multiple times over by attracting more visitors.

Zachary Crockett [02:57]: "But the right coaster in the right place can make back its cost many times over."

Return on Investment (ROI)

Dennis Spiegel, a seasoned consultant in the theme park industry, explains that calculating ROI isn't straightforward. Instead of a fixed formula, success is gauged by the increase in park attendance and the additional revenue generated from that uptick.

Dennis Spiegel [20:14]: "I'm hoping... to see somewhere in the neighborhood of a 5 to 7% increase in attendance."

For instance, a park adding a $25 million coaster and seeing a 5% increase in visitors (150,000 additional guests) could generate an extra $15 million in revenue annually, assuming an average guest spend of $100.

Long-Term Value

Beyond initial returns, well-maintained coasters can provide sustained revenue. Iconic rides like the Cyclone at Coney Island, built in 1927, continue to draw thousands of riders each year, showcasing how historical attractions can remain profitable over decades.

Dennis Spiegel [22:28]: "Every time I go up to that area, I ride it again and I'm sitting there screaming like everybody else."

Maintenance and Lifespan

Ongoing Costs

After construction, roller coasters require diligent maintenance and regular safety inspections, which can be costly. Spiegel notes that daily inspections and continuous upkeep are essential to ensure safety and longevity, with annual maintenance costs potentially reaching six figures.

Dennis Spiegel [21:38]: "We look at the entire length of the tracks and that takes money."

Determining Lifespan

Theme parks must balance the durability of their attractions with the evolving preferences of their guests. When a coaster no longer draws significant crowds or occupies valuable real estate, it may be dismantled or repurposed. Some coasters, like Tzonga, have been relocated multiple times, offering parks an affordable option to refresh their attractions without the cost of new builds.

Dennis Spiegel [23:24]: "When we believe that it has served its purpose and it's not as popular as it once was, you'll see us take a ride out."

Consultant Dennis Spiegel: Evaluating Viability

Assessing Financial Feasibility

With over 500 theme park projects under his belt, Dennis Spiegel plays a crucial role in determining the financial viability of new roller coasters. He works with both destination parks like Disney and Universal Studios and regional parks that rely heavily on attractions to draw local visitors.

Dennis Spiegel [17:15]: "I've actually flown 12 million miles... building and planning theme parks."

Competitive Landscape

Spiegel highlights the competitive nature of the industry, especially among major chains like Six Flags and Cedar Fair, which have collectively built over 250 roller coasters across 27 parks. The "arms race" to feature the longest, highest, and fastest coasters underscores the importance of standout attractions in attracting thrill-seekers.

Dennis Spiegel [18:39]: "It was an Armaments War... longest, highest, fastest, and the most coasters."

Future Trends and Innovations

Technological Advancements

The roller coaster industry continues to push the boundaries of engineering and design. Spiegel hints at upcoming innovations, such as the potential for 1,000-foot-high coasters, leveraging advancements that allow for unprecedented heights and speeds.

Dennis Spiegel [24:23]: "Technological advancements now to go there... a thousand-foot high roller coaster."

Maintaining Thrill Amid Saturation

Despite the continual drive for bigger and more intense coasters, Kiepert remains optimistic about the industry's future. He believes that as long as rides can deliver suspense and excitement, even as they grow taller and faster, they will continue to captivate audiences.

Cory Kiepert [25:04]: "People like to do something thrilling. They like the suspense."

Conclusion

Episode 91 of The Economics of Everyday Things offers a comprehensive exploration of the roller coaster industry, blending technical insights with economic analysis. Through the expertise of Cory Kiepert and Dennis Spiegel, listeners gain a nuanced understanding of the substantial investments theme parks make in roller coasters and the strategies they employ to ensure these attractions remain profitable and beloved by guests for generations. Whether it's the nostalgic charm of wooden coasters or the cutting-edge thrills of modern steel giants, roller coasters exemplify the complex interplay between engineering marvels and economic imperatives in the world of theme parks.

Notable Quotes

• Cory Kiepert [03:55]: "I remember reading an article in Smithsonian that talked about roller coaster designers. And then everything just kind of clicked where it's like, wow, I really want to do that, and someone has to do it. Why can't it be me?"

• Dennis Spiegel [20:14]: "I'm hoping... to see somewhere in the neighborhood of a 5 to 7% increase in attendance."

• Cory Kiepert [25:16]: "Then when they said, you may kiss the bride, they pressed go."

Final Thoughts

The Economics of Everyday Things masterfully unpacks the multifaceted aspects of roller coaster design and economics, making complex industry dynamics accessible and engaging. Whether you're a theme park enthusiast, an engineering aficionado, or simply curious about the business behind the thrills, this episode provides valuable insights into how these engineering feats shape and are shaped by economic forces.