Cedar Fair announces third quarter results

Posted Tuesday, October 31, 2006 8:50 PM | Contributed by Jeff

Cedar Fair revenue and attendance was down slightly on a same-park basis in the third quarter. The company says that the integration of Paramount Parks is a two-way process that involves consolidation and the adoption of systems and processes from both of the original companies.

Read the press release from Cedar Fair.

Tuesday, October 31, 2006 10:08 PM
Lord Gonchar's avatar So knocking $5 off admission and giving away cotton candy really changed nothing? Surprise!
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Tuesday, October 31, 2006 10:54 PM
What cotton candy? I heard that was phased out for sanitary reasons at the beginning of the summer. I don't know why because Mr. Bavarian Nuts doesn't have a problem on the midway.
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Wednesday, November 1, 2006 12:31 AM
Not sure if all of the parks did this, but Cedar Point and a few other parks sold a stick of cotton candy for 25 cents a pop --- a new for 2006 promotion Kinzel wanted to try out.
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Wednesday, November 1, 2006 12:44 AM
The carts that were supposed to be on the midways went away early in the season, but permanent indoor locations still sold 25 cent cotton candy all year.
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Wednesday, November 1, 2006 7:26 AM
I think the reason the cotton candy carts went away was because of the bugs that were all over those carts. It's all that makes sense to me.
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Wednesday, November 1, 2006 9:08 AM
Well, it did nothing unless leaving prices the same (or raising them) would have resulted in even poorer attendance---possible in a year without a marquee attraction to promote, gas prices in peak summer that were 50-75 cents higher in '06 than '05, while the auto industry continues to implode.

Truth be told, I'm with LG on this---I don't think $5 matters---but from a Devil's Advocate point of view, we don't know for sure it wouldn't have been worse. We'll know more when Six Flags reports its attendance, and comparing CP with the SFGAm and PKI numbers will be particularly interesting when the end-of-year estimates come out this winter.

I'll also note that some of the other things I thought could have been to blame in '05 (mostly around marginal declines in customer service) seem to have largely been corrected this year as well, and that hasn't made for much in the way of attendance gains either.

Here is the most surprising statement from the release, to me:


Among the integration actions undertaken to date... Certain information systems utilized by Paramount adopted for expansion to Cedar Fair operations.
I'd've thought it would be a cold day in you-know-where when CF management saw the benefits of better IT in its operations. Heck, the CP Resorts still use paper-copies-in-triplicate to manage room charges!

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Wednesday, November 1, 2006 10:44 AM
rollergator's avatar ^ "I'll also note that some of the other things I thought could have been to blame in '05 (mostly around marginal declines in customer service) seem to have largely been corrected this year as well, and that hasn't made for much in the way of attendance gains either."

To me, these are the kinds of changes that have a marginal effect THIS year....but have an increasing effect as time progresses. Excellenece in customer service, that's something that takes awhile to spread by word-of-mouth...

As SFI might be able to tell you, disastrously-poor customer service, that works its way thru the system MUCH faster... ;)

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Wednesday, November 1, 2006 2:37 PM
Lord Gonchar's avatar

Well, it did nothing unless leaving prices the same (or raising them) would have resulted in even poorer attendance...

True. That's that "postive negative" thing I was going on about in the news item about Shapiro's pay raise. Flat or negative numbers can often mean exceeding performance expectations. Perhaps that's the case here?

I still don't think $5 at the gate and cotton candy for found change is a business changing decision, but you have a point.

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Wednesday, November 1, 2006 3:51 PM

To me, these are the kinds of changes that have a marginal effect THIS year....but have an increasing effect as time progresses. Excellenece in customer service, that's something that takes awhile to spread by word-of-mouth...

That's kind of how I feel about the price cuts this year (at least the ones in the park). They might not help over the short run, but they do help improve people's perceptions and experiences which helps over the long run. I think people are more likely to remember seemingly outrageous prices for parking and in-park stuff than admission. The reason being is that they’ll compare those prices to out of park equivalents, but are more likely to judge the admission differently.

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Wednesday, November 1, 2006 4:51 PM
The price (at one park) was lowered by $5.00, and per capita spending remained roughly unchanged. That would indicate that $5.00 is being spent elsewhere in the park.

So it appears that reducing admission by $5.00 has the same effect on the bottom line (revenues) as increasing parking fees by $5.00 or so along with other price increases at the other place-- no major change. But somehow I think when people leave parks owned by the two big chains and they say "Guess what they went and did?" the tone of voice is quite different between the two.

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Wednesday, November 1, 2006 5:32 PM
Lord Gonchar's avatar That's a good point, RGB. It also confirms that price probably really doesn't matter (at least in terms of revenue) - perhaps this suggests that people have a number in mind long before entering the park and that's what they spend...period? Maybe.

So I choose to fall back on Gonch's number one rule of business - sell less at a higher margin.

Assuming all things being equal (which we've kind of done) - the park that moves less product but maintains the same amount of revenue (raising prices) will have more profit than the park which moves more product to maintain the same revenue (lowering prices).

Revenue means little without profit.

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