Cedar Fair Conference Call Notes

Hello, here are some notes from the Cedar Fair 2nd Quarter Conference Call that was this morning.

- Attendance at the parks for the first 7 months of the year:
KBF: "Up over '03"
DP: "Up slightly over last year"
MIA" "Up again over last year"
CP "Down 6%"
VF "Down 8%"
WOF "Down 3%" (snap)
Water Parks "Down 9%, mostly from Oceans of Fun" (super-snap)

- Geauga Lake
Has performed poorly. Blamed on weather, late advertising plan, and lack of animals. Stated that underestimated the importance of animals. Said that the park has been a "disappointment" thus far, but expects it to take several years to smooth out. Also mentioned that it is "on its way to being a resort complex."

- Silver Bullet is said to open the first week of December.

Mike

Re: Geauga Lake

"Stated that underestimated the importance of animals." - That's interesting.

"Said that the park has been a "disappointment" thus far, but expects it to take several years to smooth out." - That's obvious

"Also mentioned that it is "on its way to being a resort complex." - That's intriguing

"Blamed on weather." - That's from the excuse book SF left on a shelf in the main offices somewhere.

Ahhh, so Six Flags wasn't pulling something from their lower orifice about the weather thing. I guess it's now a valid excuse!

Actually, this summer, weather has been a fair excuse.

It's been FREEZING for the past month...relatively speaking, of course. All summer long it has been either rainy or cold, and neither condition is conducive to good waterpark business...which, quite frankly, is probably the most important feature at Geauga Lake.

In this part of the country, we're on our third straight year of crappy summer weather, although on the whole it's been slightly less crappy this season than last year if you don't mind the cold.

Because the problem this season has been unseasonably cold weather rather than non-stop precipitation, I think CP has probably been less adversely affected than Geauga.

--Dave Althoff, Jr.

When are going to fix that dump MIA? I can't believe it's still open.

The only positive about the cool weather is the lowest electric bill I've had in July for the four years I've owned my house.

I don't know why the animals would be a surprise. I just went to the San Diego Zoo last Friday....the place (120 acres) was bulging at the seams. Tried to go to Sea World the day after. 2 mile line to get in.

People are fascinated with 'em.

Guess it doesn't hurt that San Diego is a destination though...but there are also plenty of free beaches to play at too.

I'm totally not surprised that they underestimated the attraction the animals had. I was really disappointed to hear that none of the animals would be making a return when Cedar Fair took over. Whether Cedar Fair could have purchased them from Six Flags or not remains a question, but they seriously should have tried to keep the spirit of Worlds of Adventure's established park & just improve upon what Six Flags was still trying to accomplish.

The locals liked it because it was still a part of Sea World Ohio, just linked all into 1 park. I liked it (me not being a local & only attending since they became WoA), because it was a very very unique park very much unlike Cedar Point or any other park I have visited.

I guess it's too late to bring back the Six Flags animals... but that doesn't mean that they still can't get some new ones for the "wildlife" side of the park that's been closed off. I'm sure there's a lot of zoologists & marine biologists in the Cleveland area who'd love to jump at the chance to care for & help train new animals.

Then again... I don't know... maybe the disappointing figures thus far about Geauga Lake will either change their focus from a straight family park to a more all-around resort park (kinda how CP was in the 80's with their dolphin show & other wildlife exhibits)?

If you listened to the call, you'd also note they're putting a cap ex plan together for '05 and '06 that should fix that.

If I was calling the shots, I'd make GL the CP of waterparks with racing Master Blasters, a Tornado, a Royal Flush and whatever world-firsts the guys at NBGS or ProSlide can dream up.

-'Playa

Adding animals is not an answer. That's why Busch left in the first place, and it was an albatross for Six Flags as well.

I agree that the marketing came late (and I'd like to punch that "Fun" guy in the face). They aren't even selling the water park hard which, as far as I'm concerned, is what would best put people through the turnstiles.

It'll be interesting to see what they decide to put in there.

A Master Blaster seems like a good idea to put into Geauga Lake, and hell, they could even count it as a rollercoaster. What Cedar Fair needs to do is appeal to only Local people. Which means drastically reduced prices, friendly staff, and very cheap food/drink. Cedar Fair should make Geauga Lake the Indiana Beach of Ohio, only with more rides and things to do obviously.

Did Cp mention anything about the season pass having to do with the problem?

If they ever thought of animals as a small attrraction answer to give the public a little of sea worlds past then they can book a show as a concession... not that would be the smartest choice

I am curious about how season passes are included in the attendance figures.

I am also curious if season pass money is posted 100% in the quarter it was received, or if it is "depreciated" over the whole season.

While obviously Cedar Fair is better for the park in terms of operations, I’m not sure they did not bite off a bit more than they can chew here. The charm of the old Geagua Lake was that it was a traditional park. They had their obligatory out-and back woody, another twister woody, older style Arrow loopers and a genuine boardwalk-like atmosphere. Six Flags came in and upgraded this park immensely in terms of ride numbers and choices, but certainly took the old traditional feel of the park with them. They also took away the “traditional” prices that families were used to paying. In essence, they decided to be a big player in the market and go head-to-head with CP and to a lesser extent PKI. We know how this turned out.

Cedar Fair seems to have a tough decision to make here. While I agree they certainly need some new attractions to help turn around attendance problems, I’m not sure this fits with their stated goals of making this a traditional park. I can only assume that the sheer numbers of rides they currently possess (particularly coasters) would have rather large operational and maintenance expenses much beyond what a typical small traditional park would have. It almost seems like it may make sense to remove some of the rides that don’t fit into the “traditional” theme so they can get expenses under control. For example, how many of you guys think of B&M floorless and flight coasters when picturing a traditional park in your mind? I know this seems blasphemous, but stick with me here!

If they decide to keep the current line-up, I would assume that they have no choice but to keep their prices inflated to offset the obvious operational expenses that they will incur. If they go this route they essentially will be competing with themselves with CP just down the road. Why would somebody choose GL over CP if prices were close? I think we’ve already seen that this is not a good game plan. The Cleveland market will clearly choose CP most of the time if all things stay equal.

It seems like a damned if you do and damned if you don’t situation. In my opinion the lesser of two evils is to remove a few coasters from GL and spread them out to their other parks. This will help those markets who are getting new rides (CP, Valleyfair, etc) while at the same time relieve the operational expenses of GL and allow them to reduce pricing for GL to attract a different market (traditional market)! This seems like a good plan for Cedar Fair as a company. I realize that locals and enthusiasts will be upset with any ride removals from GL, but I just do not see how they can fairly compete in the current market. I also think a year or two of reduced pricing may offset any lingering resentment that ride removals would certainly cause. From a strict business sense, this seems like a possible route that can help the current situation.

Just some good old fashioned speculation from the one who didn't drink the kool-aide! :-)

P.S. Traditional parks do not need any animals beyond a petting zoo! Are there any goats there? :-)

To be honest, if I'd known the weather was going to be this crappy again this year, I would've gotten a refund for our SFWoA passes instead of trading them in for GL passes. We've had 2 trips planned to go up to GL for the waterpark for a day and had to cancel both (one for rain, one for too cold). We've only been to CP once so far this year and it rained that day.

I like 'Playa's idea for expanding the waterpark. Is there a waterpark in the mid-west or north-east for that matter with a toilet bowl slide? And I'm all for a master blaster.

But, like Jeff, I'm real happy with the low electric bills this summer.

The thing with WOF being down is that the GP is furious about the removal of Orient Express and everytime I go to the park I hear grumbling about there is nothing to do now that they took it out. As for OOF being down, the weather has been rather cool and that doesn't equal good business for waterparks. The other water parks in the region are down as well, so it is not just something isolated to KC. Also the people of KC are still programmed to expect something new at BOTH PARKS, like when Hunt Midwest owned the park. Also when HME owned the park, you added something to replace something removed as well as the new addition. This take one to add another has got to stop otherwise attendance will continue to go south to SDC/CC.

Regarding the loss of animals and marketing the park, Kinzel mentioned that they had hoped to market the great 'coaster package' (I believe he called it) that the park has... but due to lack of time and such things did not go as planned. (Or they just did not work)

Regarding expanding the waterpark, apparently Bill the GM of Geauga made a mention of some sort a couple times about fixing/removing older/adding newer attractions for next year.

Only time will tell!

Mike

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CoasterDad64 said:
I am curious about how season passes are included in the attendance figures.

I am also curious if season pass money is posted 100% in the quarter it was received, or if it is "depreciated" over the whole season.

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The attendance is simply a raw turnstile count. Whether they are one-day tickets or season passes, a body is a body. You can usually try to ferret out some assumptions (i.e. -- if per capita spending is down it usually means more season passholders in attendance, and vice versa) but the number is your basic headcount. It's not daily paid admissions.

As far as the season passes go, I would be shocked if they aren't in fact amortized over the whole season. No auditor would sign off on a company allowing a prepaid plan to be booked when it was sold -- rather than piecemeal over the course of the pass' life.

Companies even aren't allowed to book gift certificate sales when they are sold -- only when they are consumed. It's just the way that the numbers are crunched.

Anheiser-Busch sold SeaWorld-Ohio because mainly they were never granted permission to build coasters, and the limited season of the park was also an issue. The park had the smallest operating season of the 4 parks, but even the Texas one is limited.

I honestly don't know why CF even bought the park, but if they want to make it unique again, the only choice they have as a non-animal park, is to build GL a large waterpark section, unique from all others. The biggest problem they'll have is the weather cooperating...Is it possible they would consider building a combination indoor/outdoor waterpark on the former SWO/SFWoA-Wildlife side?

Loriu, we had an awesome time at Splash Lagoon Indoor Waterpark in Erie, PA this past winter. Hotel with 2 days watepark passes for 4 people is around 200 bucks, and they have the 'toilet-bowl' waterslide!http://www.splashlagoon.com

*** Edited 8/4/2004 6:27:17 AM UTC by midwave***