Cedar Fair revenue and attendance down slightly through July 8

Posted Wednesday, July 11, 2018 8:25 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, today reported preliminary net revenues through July 8, 2018, of approximately $563 million, on 11.1 million guest visits, average in-park per capita spending of $45.87 and out-of-park revenues of $70 million. This period represents approximately 40% of the Company's total operating days for 2018.

When compared with the same period a year ago, net revenues were down 2%, or $10 million, the result of a 3%, or 314,000-visit, decrease in attendance. This was partially offset by a 3%, or $2 million, increase in out-of-park revenues, including resort accommodations, and a slight increase in average in-park per capita spending when compared with the same period last year.

Cedar Fair's President and CEO Richard Zimmerman said, "We came into this year with a clear focus on enhancing the guest experience and a business plan designed to drive additional attendance, especially in the second half of the year which includes the peak vacation months of July and August and the expansion of our WinterFest events in November and December. Although early-season attendance at our seasonal parks through this past weekend has not met our expectations, we are encouraged by the positive guest response to our new rides and attractions, in particular our new coasters Steel Vengeance at Cedar Point and Hang Time at Knott's Berry Farm. We are also pleased with the growth of in-park guest spending where we are seeing year-over-year increases in food, merchandise and extra charge attractions."

Zimmerman noted that the strong attendance and revenue trends that Knott's Berry Farm produced in the first quarter have continued through the July 4th holiday weekend. He also added that Cedar Fair's out-of-park revenues have continued to perform well. "Demand within our resort properties has been very strong, particularly at Cedar Point, where we recently opened a new 158-room tower at the historic Hotel Breakers located on the park's mile-long beach," he said. "We believe this demand will continue as advanced reservations at our resort accommodations for the second half of the year are up when compared with the same period in 2017. The expansion of our resort facilities will be a key driver of increased revenues over the long-term as we open additional hotels adjacent to Carowinds in Charlotte, North Carolina, in late 2019, and Canada's Wonderland, near Toronto, in 2020."

Virtually all of Cedar Fair's revenues from its seasonal amusement parks and water parks are realized during a 130- to 140-day operating period beginning in early May, with the major portion concentrated in the peak vacation months of July and August. In addition, fourth-quarter revenues have grown in recent years with the introduction and expansion of popular events and activities such as Halloween-related attractions and WinterFest celebrations. Only Knott's Berry Farm is open year-round and it operates at its highest level of attendance in the fiscal third quarter.

"We believe the positive guest response to our new attractions and offerings, as emphasized by this year's high guest satisfaction ratings, combined with the continued growth in advance purchases and lengthened seasons at many of our parks, will provide the momentum needed to increase attendance and drive additional guest spending in the second half of the year," added Zimmerman. He also noted that the Company anticipates 2018 full-year net revenues to be in the range of $1.34 billion and $1.38 billion, and full-year Adjusted EBITDA1 to be in the range of $475 million to $495 million.

"Although we've seen some early-season margin compression as a result of the attendance shortfalls and previously discussed labor cost pressure, our long-term strategy continues to produce a significant amount of free cash flow. As such, we remain committed to a steady 4% increase in our annual distribution rate going forward," concluded Zimmerman.

The Company will provide additional information regarding net revenues, operating costs and cash flows when it announces second-quarter results on Wednesday, August 1, 2018.

Read the entire release from Cedar Fair.

Wednesday, July 11, 2018 9:21 AM

I never thought I would say this, but could it be that the draw of some of these seasonal, "summer time" amusement parks has shifted to the Fall/Halloween season? There was a time where you never would have been able to convince me that crappy weather weekends in October would be a bigger draw at Cedar Point than June. But now I believe that could be a possibility.

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Wednesday, July 11, 2018 2:12 PM

In my experience, the past few years at least, CP really didn't get busy until late July/August. It doesn't surprise me. I think a shift towards Fall/Halloween is definitely plausible, given the popularity of such events. It's also been very toasty, in the 90's often. That could be keeping people at home waiting for cooler days.

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Wednesday, July 11, 2018 7:27 PM

Even 20 years ago, CP wasn't really "busy" until after 7/4. But the question isn't really that, it's why is it down compared to last year? The go-to reason is weather, but they aren't saying that here. I imagine that variations of 1-3% year to year don't matter unless it's a slide over several years in a row.

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Wednesday, July 11, 2018 7:53 PM

Seems strange they don't have more of a handle on the reason. When Merlin announce their revenues are down on a call they spend hours explaining why they think that is.

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Thursday, July 12, 2018 10:06 AM

Quite honestly, I have to believe that part of CP's in-park attendance being less than usual is the accessibility of the beach. I have NEVER seen it so busy. We've done a few beach only days this year, and it is incredible the amount of people, umbrellas, chairs, tents etc.. spread out across the beach, all along the boardwalk and not just up by the hotel.

I really think people are spending their time in the water this summer, and the halloween season will continue to bring in the crowds. I miss the days where the halloween events were cold, rainy and dead, but life goes on.

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Thursday, July 12, 2018 10:32 AM

Yeah, we were there for six days last month, and with the heat spent only about 2 hours of the first 2 days in the park. The rest was spent at the beach and Breakers pools, with tons of other guests.

As far as CF providing a reason for the attendance slip, is there any pseudo-legal obligation that any reason given must be justified by some evidence? They've pointed out weather as a factor in previous reports, so the lack of providing a reason this quarter leads me to believe that either weather was not a factor (or they lack adequate evidence to demonstrate as much), or that they know what the factor is, but don't want to mention it because it demonstrates poor strategy or decision-making (i.e. consistently-poor staffing has come back to bite them in the ass).

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Thursday, July 12, 2018 12:07 PM

part of CP's in-park attendance being less than usual

Where do you see individual park estimates? I don't see that; only chain-wide numbers.

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Thursday, July 12, 2018 12:09 PM

Cedar Fair has an earnings call for the second quarter on August 1, 2018.

http://ir.cedarfair.com/newsroom/press-releases/news-release-detail...fault.aspx

I expect they will go in more detail then.

In last year's press release through July 4th, attendance was noted at 10.5 million (up about 3%). This year through July 8, attendance was 11.1 million (which was down 314,000). This year included 4 more days (at least on the back end -- not sure what the open dates were for the CF parks). But that would show about 900,000 in attendance for those 4 days last year. Seems high to me but maybe not. Also not clear if they are stating "same-park" attendance numbers (last year they said they were but I didn't see that this year).

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Thursday, July 12, 2018 12:29 PM

Maybe people are finally starting to realize not to go early in the season because the parks are under staffed. I know someone who has gone on opening day 4 or 5 times and still cant figure it out....

I think a lot of it has to do with schools getting out later in the summer prior to other years. Where I live schools didn't get out until June 15th because they had to make up a lot of snow days this year. The economy is doing good which equals having to work a lot more overtime and delaying vacations until later for some people (myself).

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Thursday, July 12, 2018 9:28 PM

Ohio schools where I used to live actually get out early now. When I was in school we always went until the first or second week of June. Now they get out before Memorial Day but go back in mid August.

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Thursday, July 12, 2018 9:54 PM

Because they do not release per park attendance, we don't know if Cedar Point attendance is higher or lower than last year (or essentially the same). So we don't even know which factors to point to as to a reason for the change (if any has even occurred).

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Friday, July 13, 2018 2:36 AM

Weather could be a factor. June was hot. Many CF parks are misery in the heat. Especially Cedar Point with lack of shade in many queues and unshaded pathways.

Last edited by super7*, Friday, July 13, 2018 2:37 AM
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Friday, July 13, 2018 7:07 AM

I was wondering why Kings Island closed full time operations the 2nd week of August. That seemed pretty early to me for a seasonal park but now that makes sense. Hopefully when I go on that Wednesday the park will be a ghost town. Thank you for that information Brett V.

Last edited by Dale K, Friday, July 13, 2018 7:09 AM
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Friday, July 13, 2018 10:56 AM

We went to Kings Island a couple years ago the week after the area schools went back to school (was sometime in August cannot remember the exact week) and the park was totally dead. Just about everything was a walk-on all day long. Longest we waited for anything was under 15 minutes. Talked to people in line who were there the entire week and they said it had been the same the prior two days and were expecting it to be the same the remainder of the week. My kids' school started the following week so it worked out well for us.

Cedar Point still can pull in Michigan kids at the end of August because their schools cannot start until after Labor Day.

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Friday, July 13, 2018 12:19 PM

We are headed to CP late August because I’ve heard the Park is a ghost town that time of year. Fingers crossed. Of course we went last year for Labor Day weekend after hearing it was also a good time to go... And it was the busiest non-HalloWeekends visit I’ve ever had.

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Friday, July 13, 2018 7:56 PM

ShaneDenmark said:

We are headed to CP late August because I’ve heard the Park is a ghost town that time of year. Fingers crossed. Of course we went last year for Labor Day weekend after hearing it was also a good time to go... And it was the busiest non-HalloWeekends visit I’ve ever had.

I went last year at that time (last week of full time operations). Everything was still about a half hour wait, I guess for Cedar Point you could call that a ghost town.

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Saturday, July 14, 2018 5:37 PM

Dale K said:
The economy is doing good which equals having to work a lot more overtime and delaying vacations until later for some people (myself).

I’m not an expert be that seems to be a super corner case. I would bet that a good economy means more people have disposable income and are willing to spend it on a trip to CP. I can’t imagine economy has an inverse relationship with overall attendance at any point on the curve.

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Saturday, July 14, 2018 6:15 PM

Remember during the recession that they did say they felt they were getting something of a bump from people who might otherwise spend on big destination trips. It's feasible the reverse could be true, but it wouldn't align with this release that indicates more out-of-park (hotel) spending.

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Sunday, July 15, 2018 12:43 AM

Right now I'm at the stage of realizing it's almost the middle of July and I've only been the Cedar Point 4 times and this is far less than most years. The weather has contributed but I have to say I have spent a lot of money in the park so far this year compared to what I normally do.

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