Cedar Fair reports "strong performance" so far for 2021

Posted Wednesday, September 8, 2021 8:55 AM | Contributed by Jeff

From the press release:

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, said today that strong attendance and guest spending trends had continued across its portfolio of 13 properties through the 2021 Labor Day weekend, while strong initial sales of 2022 season passes offer early indications that market demand remains high for immersive, outdoor entertainment experiences.

“Strong attendance through the Labor Day weekend capped off a very busy and successful summer season at our parks and resort properties,” said President and CEO Richard Zimmerman. “The strength and resilience of our business model has quickly propelled operations back to near-historical levels over the last 10 weeks.”

Preliminary net revenues through Sept. 5, 2021, totaled $879 million, driven by attendance of 12.9 million visits, in-park per capita spending of $60.99, and out-of-park revenues of $122 million. For the comparable period in 2020, net revenues totaled $134 million, on attendance of 2.1 million guests, in-park per capita spending of $45.43, and out-of-park revenues of $42 million.

Year-to-date 2021 and 2020 results are not directly comparable, given the effects of the pandemic and suspension of park operations during the summer of 2020. To provide more informative comparisons, the following information reflects results for the comparable 10-week periods of June 28 through Sept. 5, 2021, versus July 1 through Sept. 8, 2019. During the 10-week period in 2021, the parks had 878 total operating days compared to 936 operating days during the comparable 10-week period in 2019.

For the 10-weeks ended Sept. 5, 2021, preliminary net revenues totaled $645 million, a $3 million increase from $642 million during the comparable 10-week period in 2019. The year-over-year growth was driven by a 25%, or $12.73, increase in in-park per capita spending to $62.81, and a $3 million, or 4%, increase in out-of-park revenues to $71 million. These increases were offset in part by a decrease in attendance of 2.4 million visits, or 20%, largely due to 58 fewer operating days in the period. On a same-day basis(1), attendance for the current 10-week period represented approximately 85% of comparable 2019 attendance levels. Excluding results of Canada’s Wonderland’s, which remained under capacity limitations for the entire period, total attendance for the current 10-week period ended Sept. 5, 2021, represented approximately 90% of comparable same-day 2019 attendance levels.

Commenting on the recent operating performance, Zimmerman said, “We are extremely pleased with the momentum we’ve built in the business over the past two months. We continue to see healthy demand across all areas of our business, reaffirming confidence in the strategic initiatives within our long-range plan. Our strategy to broaden the guest experience through more experiential attractions and limited-duration events is extending our audience reach, encouraging guests to visit and visit more often, and contributing to the growth in guest spending, which is at record levels.”

Zimmerman added, “We are also very encouraged by the early trends in the sale of 2022 season passes and related all-season products, which through yesterday are pacing well ahead of the early sales numbers of the then record 2020 season pass program. Pre-COVID, our season pass and other all-season programs, which have always produced meaningful, recurring revenue streams, helped drive our record performance in 2019 and much of the attendance growth we’ve produced over the past several years. These programs remain foundational within our long-term strategic plan, and a key area of focus as we develop and expand our resources and capabilities in areas like business intelligence.”

Zimmerman continued, “In a few weeks, our parks will begin transforming their midways into a seasonal, color-filled celebration of autumn, highlighted by the return of our regional Halloween events including Haunt, HalloWeekends, SCarowinds and, of course, Scary Farmat Knott’s Berry Farm, where theme park scare fests were invented some 50 years ago. Historically, weekends in October leading up to Halloween produce our busiest days of the year, offering unique, immersive entertainment at a size and scale unmatched in our markets. Given the tremendous demand for these special events, we have added days to this year’s park operating calendars that will provide our guests more opportunities to visit during this extremely popular period.”

Zimmerman concluded by noting, “Given the strong performance of our parks during July and August, our positive outlook for the balance of the year, and the early sales trends for 2022 season passes, we remain committed to our near-term priorities of reinvesting in our business, reducing debt, and reinstating our distribution when most appropriate.”

Read the press release from Cedar Fair.

Wednesday, September 8, 2021 9:39 AM

Richard Zimmerman said:

We are also very encouraged by the early trends in the sale of 2022 season passes and related all-season products, which through yesterday are pacing well ahead of the early sales numbers of the then record 2020 season pass program.

I still think this is not the point of pride they are trying to make it out to be. The passes are so underpriced for the product offered, and to me it's nothing more than undervaluing their own product. If they were priced appropriately (higher than Six Flags but still lower than an Orlando park pass) and you were having higher than usual sales with pent up demand, then great! But if you are setting all these pass sale records for a product that has evolved, but not necessarily changed in recent history, I feel like that's a huge red flag that the pricing is too low.

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Wednesday, September 8, 2021 10:30 AM
Jeff's avatar

Totally agree. You can sell a lot of anything if you price it low enough. It doesn't mean that you hit the sweet spot against what the market will tolerate.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 10:50 AM

And that some people think a given price is too low doesn't mean it isn't hitting the sweet spot against what the market will tolerate.

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Wednesday, September 8, 2021 12:13 PM

Weren't season pass sales increasing before the Gold Pass, when pricing was significantly higher? That seems to indicate they hadn't reached the sweet spot.


Brandon | Facebook

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Wednesday, September 8, 2021 12:22 PM

Do they release season ticket sales by park?

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Wednesday, September 8, 2021 12:43 PM

Not to my knowledge, but if the chain's season pass base was growing absent any major Gold Pass-esque promotions, and Cedar Point, at least anecdotally, was pretty damn busy pretty consistently, it stands to reason that CP could have charged the same if not more for the product, rather than basically give it away.


Brandon | Facebook

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Wednesday, September 8, 2021 12:49 PM
Jeff's avatar

Yeah, that's exactly where I am. Decreasing the price when you were in a period of growth seems like an odd choice.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 1:08 PM

And especially coming out of a year where staffing was such a challenge and not knowing if that trend will continue in 2022, I would think the Disney "less is more" strategy with expensive admission combined with slightly decreased attendance for a better experience would be the no-brainer decision.

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Wednesday, September 8, 2021 1:17 PM
Jeff's avatar

For all the sound and fury about the cost of Disney parks, it isn't reflected in the lines for F&W, that's for sure.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 2:11 PM

Not to my knowledge, but if the chain's season pass base was growing absent any major Gold Pass-esque promotions, and Cedar Point, at least anecdotally, was pretty damn busy pretty consistently, it stands to reason that CP could have charged the same if not more for the product, rather than basically give it away.

So we don't have the data. But people who made the pricing decisions have the data. Not relying on extrapolating data from the entire chain to individual parks. They have the data for each park. And looking at data not anecdotes.

So either management doesn't understand a basic principle of economics (which pretty much anyone who took a high school economics class and definitely a college economics class knows) or the data is otherwise than the extrapolation/anecdotes.

One thing I learned over the years on this site is enthusiasts tend to view parks through enthusiasts' eyes. They know what they would do with given price point, given a certain perk, etc. Assumption is that everyone will do the same. But the vast majority of people aren't enthusiasts.

Disney and Cedar Fair have a very different revenue mix (gate, food, lodging, merchandise, etc). As a result, taking the same approach is one won't necessarily work for the other.

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Wednesday, September 8, 2021 2:28 PM
Jeff's avatar

Why does it matter if we have park data? We can see the gold passes range from $79 to $119 across the chain. You could make all of those assertions about Six Flags in the Burke era when they did the same thing Cedar Fair is doing now. You know how that turned out.

And come on, "enthusiast eyes?" This is the site where the community that calls out enthusiast eyes. We get more right than we get wrong, and Gonch has every post cataloged to prove it.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 2:50 PM

So you determine sweet spot in terms of pricing by touch? Smell? Weather forecast in Seattle? Of course you need data.

As a journalist major you presumably know the meaning of the word "tend" right?

And all from the guy who views the world through Disney eyes. Too funny.

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Wednesday, September 8, 2021 3:48 PM

If I remember things correctly, the failure mode of the Six Flags Story years wasn't (just) giving away the gate. It was also combined with an inadequate focus on customer service and an over-extension of cap-ex. I bet they could have survived one of those at a time. Maybe even two. All three together is pretty tough.

Cedar Fair seems guilty of (at most) one of those---and the debate here is whether or not they are even guilty of the one. If I understand this point correctly:

> So we don't have the data. But people who made the pricing decisions have the data.

that leads to a set of questions that we can guess at, but leadership (probably) knows the answers to:

1: How many visits does a gold pass holder make on average to the park in a season?
2: How many times does a gold pass holder park on average in a season? (Almost certainly meaningfully smaller than #1)
3: How do the add-ons (season drink, food, fastlane, etc.) for a gold pass holder perform?
4: How do changes in the passholder mix influence demand for the resorts?

There are probably others, but the easiest (and maybe most important) one to think about is #1. If it's more than three, then the pricing seems like it might be a bad idea. If it's less than two, the park is #WINNING. If it is in between those two, then it is arguably working as an upsell mechanism.

And, I would not be surprised to find that the average is somewhere between two and three. I suspect everyone who buys one plans to visit at least three times. But, some (and maybe many) of those people won't quite make it as often as they'd planned, because plans change. The distribution is almost certainly heavy-tailed, so there will absolutely be some outliers, and so the average is not descriptive statistically.

But, it strikes me that the average is very meaningful economically. At the end of the day, if the per-caps are going in the right direction (they are, comparing '19 vs. '21) and attendance is not falling by more than a compensating amount (it isn't, on the same basis) then they are doing something right. Could they be doing something "more right"? Maybe, but at least it isn't wrong.

Yet.


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Wednesday, September 8, 2021 3:53 PM
Jeff's avatar

GoBucks89 said:

So you determine sweet spot in terms of pricing by touch? Smell? Weather forecast in Seattle? Of course you need data.

As a journalist major you presumably know the meaning of the word "tend" right?

And all from the guy who views the world through Disney eyes. Too funny.

For ****'s sake, this is CoasterBuzz, this is what we do. If you want to make an argument for something, then do that instead of implying we're all a bunch of dumbasses. Then we can talk about what's "too funny."

What Brian said, and I would add that the pent-up demand effect on everything, which has pushed inflation higher, labor costs higher and is breaking supply chains, all makes a pretty good argument to be skeptical of anything being cheaper right now.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 4:45 PM

Brian Noble said:

If I remember things correctly, the failure mode of the Six Flags Story years wasn't (just) giving away the gate. It was also combined with an inadequate focus on customer service and an over-extension of cap-ex. I bet they could have survived one of those at a time. Maybe even two. All three together is pretty tough.

Cedar Fair seems guilty of (at most) one of those---and the debate here is whether or not they are even guilty of the one. If I understand this point correctly:

Lurking over on Pointbuzz it looks like at least Cedar Point was pretty guilty of number two as well for at least the first half of the season. Food lines longer that coaster lines, bad Six Flags and SeaWorld/Busch Tampa style dispatch times on major rides, major rides opening hours late, coaster lines being cut off 2 hours before park close, etc., seemed to be the norm for at least May and June.

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Wednesday, September 8, 2021 7:12 PM

that leads to a set of questions that we can guess at, but leadership (probably) knows the answers to

I agree that the park doesn't have perfect info as to all of those questions. But they certainly have more info than we do. And thats been my point in this thread and the 500 other times this conversation has happened here since Cedar Point first announced Gold Passes.

But even without the data, you can look at what people who have more data than you are doing and draw conclusions. They set the price at 99 cents from the get go. They have pass data from other parks plus a lot of data from CP over the decades. And then when they had the chance to adjust the price for the 2022 season (with the ability to increase it like many other things right now, say the 99 cent offer was a 150th anniversary thing, etc), they kept it at 99 cents.

One, could be that management doesn't understand Econ 101 in terms of impact that price increases or decreases can have on profits. Doesn't seem likely though.

Two, could be they are getting it wrong. Given there is some art involved because you are not keeping everything else constant to determine the profit impact on one price change. That is something in all the discussions on this I have never ruled out.

Three, could also be that the data shows the current price is the best economic choice for the company.

Many people here seem to totally discount #3 as even being possible with more apparently supporting #1. On what basis?

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Wednesday, September 8, 2021 8:01 PM
Jeff's avatar

"People here" have not been leaning on either condition. They've been leaning on the idea that management thinks that they can get people in cheap and have them spend more once they're inside, a movie that we've all seen before. That's a reasonable conclusion given the emphasis on dining plans and Fastlane and generally higher per capita spending. They reported July per caps at "120% of 2019 levels." And when they start talking in the next breath about "challenging business optimization" and the reports from the front line guests is uncharacteristically negative, it's pretty reasonable to conclude that the formula is not winning.


Jeff - Editor - CoasterBuzz.com - My Blog - Silly Nonsense

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Wednesday, September 8, 2021 8:59 PM

GoBucks89 said:

And all from the guy who views the world through Disney eyes. Too funny.

How man-bites-dog is it that someone on here is being chastised for viewing Cedar Fair's results through Disney eyes? 20 years ago it was all about this site having a Cedar Fair bias.


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Thursday, September 9, 2021 9:57 AM

That all ended when Dick Kinzel bought Pop Forums to... wait a minute... wrong timeline.

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