Cedar Fair attendance up 8% in 4Q, 3% for year

Buying a house right now is ideal....buying one a year ago, not so much. I know several people who've been laid off in the last 3-6 months, and a couple in jobs where they thought they were safe. Not sure where the line is between majority and vast majority, but clearly many people are hurting, and virtually everyone who isn't hurting "directly right now" certainly lost alot out of their retirement accounts. The good news is that for MOST, that money will re-accrue as the market rebounds. But for far too many who were closing in on what they felt was a comfortbale retirement ahead, they're revising their expectations about when to retire, or how much they'll have to retire on. This may indeed BE "the fix", but only if we learn the lessons of how to compete successfully in the global marketplace - so far, I haven't heard that enhanced wisdom coming from Detroit (or Wall Street for that matter). Keep bailing (out) folks, this recession will probably last at least through this summer....and maybe into 2010.

"I," "I have friends who" and "people I know" aren't the reality. You guys are smarter than that.

Mortgages and credit cards are one thing, but business runs on revolving credit. Businesses are having a hard time securing credit lines because the banks are scared to loan money. Small to medium sized businesses in particular don't have the cash in the bank to pay their employees while waiting to be paid by their customers. The consumer debt taken on by the banks may have been the impetus for the crisis, but it affects everything else they do.

I work for a company that manages the online efforts for a number of very large brands everyone knows. Trust me, they're not spending the way they used to. The ripple reaches far and wide, and it's not done.

The highest unemployment in 16 years (7.2%) is very real and really affects consumer spending. Don't be naive to think that just because you're OK, everything is peachy.

The highest unemployment in 16 years (7.2%) is very real and really affects consumer spending.

Yes, but I think consumer spending dropped (when it had no reason to other than fear mongering) and created rising unemployment. It's very chicken/egg, but I'm of the opinion that consumers flinched unnecessarily and business reacted just as strongly (and unnecessarily) and the circle has its momentum.

I don't think anyone is saying there hasn't been a change.

I think the opinion on how great the change, how widespread the change, how serious the change or how the change started is up for debate.

Kind of repeating myself and I promise it's the last time I'll say it...maybe:

1. I think the severity of the change is being overblown.

2. I think the change itself (or perhaps whatever level of severity there is) is a result of people telling us there would be a problem.

3. I'm more inclined to call the change a 'fix' rather than a 'problem'

No, rising unemployment is better attributed to frozen credit markets in business. It's not a chicken or egg situation at all. Banks hurt for providing stupid credit -> banks take a bath -> banks don't want to lend to business -> business trims expense -> unemployment rises.

You are right that there's a necessary adjustment occurring, and I would never debate against that. What I'm getting at is that the adjoining pain is not narrowly focused. The only saving grace in all of this is that so much of our crap is made in China that the phenomenon is no longer limited to the states.

I really just don't understand what is going on, though. Taking that article about Best Buy for example... it states that the 3rd Q earnings were down significantly despite increases in revenue, gross profit margin, and market share. What am I missing?

And why is it that banks have decided to be too afraid to lend to businesses all of a sudden? I thought we determined it was the consumers themselves who were demonstrating poor credit management skills.

Something has to kick off the cycle. What was it?

Carrie M. said:
And why is it that banks have decided to be too afraid to lend to businesses all of a sudden? I thought we determined it was the consumers themselves who were demonstrating poor credit management skills.

That's a political debate and you won't find a definite answer either way:

The housing market bust is at the base of the credit crisis and the question is who’s to blame, irresponsible lenders or irresponsible borrowers. I tend to blame those that are more educated, but that’s just me.

They're afraid to lend because they've exceeded, and are being burned by, their risk tolerance. It really is a combination of people taking stupid mortgages and the banks offering them.

But I don't think that has anything to do with the plight of companies like Best Buy who are considering major lay-offs. If their earnings are down while their revenues, profit margin, and market share are up, the only thing that could be responsible is excessive spending or the higher cost of spending.

I'm thinking the value of the dollar could be the culprit for that. While buying outside of the United States is a great deal when the value of a dollar is higher than its global counterparts, it will burn an organization when the dollar tanks.

Best Buy just took a huge charge to offer severance for voluntary lay-offs, which would certainly hurt their earnings. Why they chose to do it I have no idea, except perhaps they see trends that frighten them.

The mass severance offers didn't come after the earnings drop, it was what resulted from the earnings drop. At least that is what they are reporting. Their earnings dropped by 77% in the third quarter and so they offered the severance packages in December in response.

http://www.newsobserver.com/business/story/1336657.html

And even if they did offer the severance which caused the drop in earnings, that only supports that some of what is going on at least, is a result of fear mongering.

I think that's getting away from the point though. The economy isn't in the crapper because of fear and doubt. The credit issues are very real and not imagined. Banks won't lend if they're already teetering on insolvency, and that has a serious ripple effect to all segments of the economy.

Another problem with calling it a 'fix' (though I too believe it was a long time coming and in a neccessary correction) is that the people who eat it the most have nothing to do with the initial cause of the problem. Retirees, people who lose their jobs, people who are worried about losing their jobs...It might be a "fix" in the macro sense, but it's unjust in the micro sense.

I've seen both sides of this.

I know a lot of people---high-paying job, white collar people---who lost their jobs in this area. Some were automotive management/engineering/R&D. But, interestingly, most of the ones I know personally worked at Pfizer's R&D labs that closed several months ago, after a consolidation. Some, not all, were offered relocation to Connecticut and the UK. Many of these folks lived in my general neighborhood, and my house's value has dropped considerably thanks to all the extra houses on the market by those that left town. Of those that stayed, some have found new work (sometimes with a pay cut), some are still looking, and others have decided to go from two-income households to one.

Most of those folks have changed their spending in a big way, and they had to. If they went to Disney World last year, they're going to Cedar Point this year. If they went to Cedar Point last year, maybe this year they're going to the county park for a picnic.

Then there are the people that Gonch is thinking of. Fear, Uncertainty, and Doubt leads people to start thinking about the money they spend, even if their jobs now are still secure. They start thinking "what happens if" and stop spending---on both luxury items and "non-essential" necessities---even though, strictly speaking, they don't have to.

A lot of folks (including me) will argue that this is a good thing. The US had gotten to a dangerously low level of savings rate---we were collectively living from paycheck to paycheck, if not worse. If this scares people into socking a way a few months' worth of expenses to get them through rough scrapes, that's going to be better for everyone in the long run, because it's going to reduce the instances of financial default that end up with much larger societal costs.

As anecdotal evidence of all of this: normally, when I need my Honda serviced, I have to wait at least a week to get it in to the shop. I called yesterday afternoon, and got an appointment for this morning. Normally, they quote me "the price" on any repair, and that's that, take it or leave it. Today, without being asked and before I even really hesitated, my mechanic offered to "do what he could" before I agreed to the repairs, and he meant it. This tells me that my Honda dealer is not getting nearly the repair volume they normally do. Whether it's because people really don't have the money, or think they don't, I can't say.

Finally: Gonch, your bet is an awesome one. You bought low---both in terms of property values and interest rates.

So how is all of this going to affect CP (or the industry) in 2009? :)

I think Brian addressed that.

Brian Noble said:
Most of those folks have changed their spending in a big way, and they had to. If they went to Disney World last year, they're going to Cedar Point this year. If they went to Cedar Point last year, maybe this year they're going to the county park for a picnic.

It will really depend on how CP reacts to what is going on and if they choose to market accordingly. It may be true that the folks who used to attend CP will no longer do so. But there is a whole different market of folks they could pull in who may have to choose not to attend Disney or other recreational resorts.

I think attendance will generally hold, but I'd expect the in-park spending to be down. Not because of pricing but because of the economic situation. It'll be a "We can go to the park, but you kids can't get anything" situation.

I don't think it's going to matter if you have $5 fries or $2 fries this summer. People will still want entertainment and recreation, but they'll be doing the same things (or similar things) as cheaply as possible.

(big risk on that prediciton, huh? ;) )

Flat attendance (give or take) and lower per caps for all in 2009.

And what about season passes and the parks that rely heavily on those visitors?

Is the value of a $100 or $150 pass greater than the dollar amount to get the value? Do people balk at spending $150 and opt for one or two visits for the family at an overall lower cost? Or just the opposite - more people buy them because of the 'value' tied to it regardless of the higher cost?

I would think that at some point the streak of really good weather weekends in October is going to end. I'm sure they will put more money into Halloween events again this year (which they justifiably should), but sooner or later October is not going to have multiple 70+ degree weekends in the midwest and Canada.

This makes me wonder how close to flat attendance would have been if not for the Halloween events.

The number of trips to CP in '08 were about the same for us, but I know we spent less in the park than in the past. We aren't one to take a cooler of food and leave to go eat lunch or dinner. We usually just fork over the money to avoid the inconvenience of leaving the park to eat. But their food is horrible for the price and I found that we would try to put off eating so we'd only eat one meal in the park instead of two. CP wasn't the only park (SF parks) that we watched what we spent. We also started looking at the prices more closely and instead of buying a meal, we'd only buy the main part of the meal. I've even been known to buy kids meals because I don't eat much and it's cheaper. We never do buffets because while my husband would get his monies worth, my daughter and I never would.

I know for us, this year is going to be a little different in our park visits. Yes we will go to Kennywood a couple times and Waldameer. We do have '09 Platinum pass for CP so they will get used at CP and hopefully a couple more CF parks, KI and CW. We are going to Florida in November and will be visiting the Busch and Universal parks. That is a big cut back from last year (we visited 30 parks last year), but mainly because the Florida trip is going to cost some major $$. Our pool will see a lot more use this summer than last.

We've been kind of immune to the housing market crash here in the Pittsburgh area. Our housing market never really had a big boom and prices didn't inflate too much. Our umemployment hasn't had a big jump (mainly because of some major infrastructure projects going on right now) but that hasn't stopped some big companies from recent layoffs. Even my husband's company who had record earnings the last 3 quarters has a hiring freeze and are delaying raises because of fear of what the next couple of quarters may bring. I think people got too comfortable in the "good times" and I know people who are really struggling right now, but like Gonch, I think there is some unworthy panic going on right now too. Lord knows we didn't need (and really shouldn't have spent the money on) a new 52" HDTV and a PS3, but that didn't stop us from buying them in the past couple of months.

^I too went about the same amount of times but spent less. 2 years ago I would always spring for a big meal at Fridays and a snack (usually fries) but this year I brought a meal more times then not and only bought a snack.

Its when the price for food for the day got closer to $40 total instead of $30 that I knew I would have to cut back, and I wasn't going to go out to my car to just have a snack, so out went the trips to Fridays.

When I go to Knott's I leave the park and walk to the fast food places which are only a few blocks away. Knott's has drastically raised their food prices in the last two years. There is a Mexican restaurant which used to have a combo meal with two tacos, beans, spanish rice and a medium drink for $7.99. Last year they changed it so that the drink is no longer included and the price is now $10.50 and if you want the drink you have to buy it separately for $4.25. So you are paying $14.75 for what used to cost $7.99. It just not worth it when I can walk 2-3 blocks and buy fast food.

Panda Express is another good example. At Knott's a combo with 2 entrees, rice and chow mein is $11.99. The drink is not included and is $4.25 for a medium and $4.75 for a large. With a drink you would pay $16.24 or $16.74 for 1 meal.

At SFMM, you can get the same combo with the drink included for $10.62 or $11.12 if you upgrade to a large drink. If I use my Xtreme Play Pass and get 25% off, the prices become $7.97 or $8.34 which is barely more than you would pay at a normal location. With my pass I can get the same combo meal at SFMM for 50% of what it costs at Knott's. Granted all the other food prices at either park are insane but at least at Panda Express I feel I am getting a large meal at a pretty decent price. You can't hand pick each item but to me that is a small sacrifice in order to pay $8.00 less per meal. The all you can eat buffet at the Mooseburger Lodge is pretty good too. With my pass the meal and a large drink is $11.61.

Also, with my pass a large soda at SFMM costs $2.61 compared to $4.75 at Knott's and a medium is $2.24 compared to $4.25 at Knott's. I remember prior to last year food at Knott's was cheaper than SFMM and if you looked hard enough you could actually find a few pretty decent deals. I never expected food at Knott's to be this much more expensive the the point that some of the food at SFMM seems reasonable.