Secret of the Theme Park on Disney's Doorstep

KISSIMMEE, Fla. ( MainStreet) -- By mid-January workers, parents and students are seeking warmth to cure their winter blues. Florida is a natural destination for sun, relaxation and fun, and is famous as the home of Walt Disney ( DIS) World, which turned 40 last year with the distinction of being the world's most visited theme park -- nearly 17 million visitors in 2010, according to TEA/Aecom.

But for those who can't afford to shell out hundreds of dollars for their family in just one day, or who don't want deal with the crowds, there is a smaller and more affordable neighbor: Old Town, located about 15 minutes away in Kissimmee, Fla.

How does a small theme park compete when it has the world's largest tourist attraction right next door?

By not competing at all, but instead offering a different experience altogether that is complementary to Disney, says Old Town's president, Gary Conroy. The strategy brings in roughly 2 million visitors a year.

If you've never been to Old Town, the 12-acre theme park has been created to resemble small town USA during the 1950s and 1960s. There is a Main Street filled with stores and restaurants, and there's a county fair eternally visiting to provide attractions and rides.

Access to the 75 shops, 21 amusement rides and a Classic Car Cruise every Saturday is free, as is parking. Visitors pay for the various attractions and rides.

Old Town, which celebrated its 25th anniversary in December, appeals to families as much as Disney does.

"There's many different reasons why people are coming to Old Town," Conroy says. "Our niche is to provide them with an experience that is certainly different in terms of value. Less hustle and bustle, less need to be lining up in long lines where parents don't have to empty their pocketbooks, but have all the attributes of a theme park."

Conroy sees the park as a place for visitors to come if they need a day off from Disney or before they go to the larger park. And because Old Town can meet the needs of the whole family -- shopping for mom, classic cars for dad and rides for the kids -- it is successful.

"We don't view Disney as a competitor in our business model," Conroy says. "Disney is an asset. If it wasn't for Disney we wouldn't have a customer base."

"The more we hear about large parks opening, bigger parks that keep opening, that's good news for us," he adds. "We are simply positioned as an accessory option to those theme parks. Our theme park is an average four- to five-hour destination. It's not an all-day destination."

The model
This may sound strangely familiar to consumers and small-business owners. Dr. Alex DeNoble, head of the Entrepreneurial Management Center at San Diego State University, compares the Old Town-Disney dynamic to that of a large "anchor" store in a shopping center: Large department or discount retailers typically bring customers to the center, from where they branch out to shop in smaller stores nearby.

"For a company to get that big, they have to put systems and processes and policies and procedures in place to support their larger entity. And what that does in many ways is takes away from flexibility, because they have to appeal to a mass audience," DeNoble says, referring to companies as proportionately large as a Disney park. "So when you look at a smaller firm positioning itself geographically they certainly can't compete on price or brand-name recognition, but what they can compete on is offering an alternative -- a different kind of experience."

Old Town's business model also makes sense because it can capitalize on visitors using time shares or other reasons for a weeklong stay. "You can't spend seven days at Disney. You need some alternatives," DeNoble says.

Roots
When Old Town was conceived in the mid-'80s, the idea was to create a place nostalgic and reminiscent of 1950s and 1960s Americana. It was a great idea "because it represented a positive time in the country, with a strong community feel," Conroy says. "The concept that was built was able to sustain a very long period of identity, because it's a timeless identity."

The park featured novel retail concepts and introduced the car cruise in which anyone owning a car built before 1972 was invited to participate. Today an average 250 to 300 cars take part weekly.

Merging with a new world
Still, it's a challenge to keep tourists -- and locals -- visiting while keeping up with the ever-changing and fast-paced theme park industry. Old Town faces the challenge of updating its relevancy while maintaining its nostalgic and timeless feel.

Old Town is finalizing a deal to be fully acquired by Brothers Entertainment Management Group. The group has owned some amusement attractions at Old Town since 1999 and took over all of the amusement rides in 2010. Conroy, president of the park since November 2010, is charged with refreshing the theme park.

"Old Town has been here for 25 years, but it also hasn't changed much in 25 years. It needs a fresh identity change ... which really incorporates resetting the scene of the '50s and '60s in a modern form. We need to re-establish the identity, but we need to re-establish it in in 2012," he says.

Cosmetic updates will help, as should bringing in more of a "large theme park feel" to Old Town including rides, attractions and other events such as parades, Conroy says. But he acknowledges the need to keep a small-town feel.

"If we think too big or try to reach for something too big we will lose what is the most important part of Old Town -- our history, nostalgia and community feel. We don't want to lose that," he says. "I think the most important thing going forward is maintaining our identity."

On the merchant side, "it's absolutely imperative that we keep that sense of community in place because that is very unique in the commercial setting," he says. At the same time, the park has to ensure that it is attracting "new and exciting" retail concepts that work on its grounds and appeal to customers, he says.

"If we meet those two needs correctly I think we will have an incredible future," he says.

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

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