I think a big factor is Mattel's mishandling of the franchise in the past few years. The TV series was controversially retooled last year in a kneejerk reaction to PAW Patrol taking some of Thomas' market share, now promoting diversity and having episodes with animals in their plots. That, and the trains and vehicles can move their bodies independent of their chassis (though at least it's more subtle and graceful than in Chuggington, where the engines jump off the rails).

The merchandising has also been grossly mishandled, becoming cheaper and cheaper in quality, culminating in Thomas & Friends Wood, which replaced the long-running Thomas Wooden Railway line. Why was it bad? Whole sections of the models were unpainted both to save money and because apparently kids thought the Wooden Railway toys were made of 100% plastic (and while plastic was used alot in the later years, wood was still the primary material used), larger characters like Gordon and Spencer became just as long as Thomas (so they could use a common chassis to cut production costs), tenders became blocks with vague details painted on (again to cut costs), and the track system was simplified and made incompatible with other wooden train track brands, which all use common connectors, just to monopolize their own track system (though this is a bit of a meaningless proposition because Wood is compatible with Wooden Railway and other wooden train systems like BRIO and Whittle).

At the end of the day, the decline in DOWT attendance can be partially blamed on Mattel mishandling and even disrespecting the entire franchise in pursuit of merchandising profits and competing with PAW Patrol.