Cost cutting at CP: It ain't the hours

Not true, Gonch. They don't do the open haunt stuff on Sunday nights at CP.

I meant that more in response to Gator, Jeff, but since I'm here - wouldn't the Sunday night thing be covered by the last part of my post?

My assumption would be that the Halloween stuff isn't open on Sunday nights because not many people are staying late on a Sunday night at that time of year.

My point was (in response to Gator) that I don't think parks will shift their schedule that direction in the future - the reason they run those hours at all is merely in response to the Halloween thing, not a larger trend.

The lights are all on anyway. I don't think they ever shut them off except for the winter months when the park is closed.

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Lord Gonchar said:I still don't understand the difference in reasoning that people will buy more stuff at the end of a 10 hour day if the time is 10pm, but won't if the end of their 10 hour day falls on 8pm.

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Here's where I guess I'm going....not that I have any *science* going on. Say I worked that day, and got to the park around 5:30pm. Not CP, not specific to any park or season. In general. Park closes at 10pm, I came, spent 4 hours having a GREAT time at night in cooler temps, I buy some souvies and go home.

Park closes at 8pm? I probably went home instead! ;)

CP is a little different with the dorms for staff and such… But I look at the hour cuts and think…they must not be able to get enough qualified (equals breathing) staff to work extended shifts with unemployment hovering around 4%. Teenagers have never been much for working late evening shifts anyhow. This is when they like to play.

I’ve always felt this may be a staffing issue versus a profit issue. They’ve had the ability to track in park spending per hour for years and years (just look at the receipt ribbons)…yet the hour cuts are a recent phenomenon that coincides with record low unemployment.

Maybe it is a coincidence…? But this scenario is more intellectually palatable to me than…people just stopped coming at night in the last few years. The timing does not make sense in light of the standard justification.

It's not a staffing issue, that I can say with certainty. It's all about how many bodies are in the park, from a historical perspective. Obviously they sometimes get it wrong, as this week has shown.

I do not doubt what you say Jeff…

From a different perspective it seems odd that NOW they suddenly do not have enough bodies in the park (although I did not think the original thread on this subject was about Cedar Point per say…I was not aware CP cut hours too).

Has there been a recent (last year or two) decline in night time guests? Or is there some new tracking system they are using to drive the recent change? One would think they would have known their nightly profit potential since the advent of the dated cash register. Did they not look at that data in the past? Have they changed their opinion of what an appropriate profit margin is?

I guess I’m wondering…out of intellectual curiosity…what has changed THIS YEAR?

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Maybe it is a coincidence…? But this scenario is more intellectually palatable to me than…people just stopped coming at night in the last few years. The timing does not make sense in light of the standard justification.

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It's not that people suddenly stopped hanging around until close, it's that they never were. Increased efficiency has the potential to lead to growth in what is a mature industry.

So you are saying they (decision-makers) just recently got smart? Why were they not trying to be efficient circa 2004?

I agree with the premise that there is no need to stay open if you are not making money. I don't understand what took them so long to come to this decision...IF people were never hanging around until close in the first place.

That was what my questions to Jeff were trying to determine. Something had to change RECENTLY. Maybe it is as simple as the got SMARTER or they got the courage to do what they should have been doing all along. Or maybe they got a fancy software tracking program that made visualization of economic realities "dummy-proof." SOMETHING changed THIS YEAR that led to the decision. That is the part that interests me...for some stupid reason.

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Jeffrey R Smith said:
So you are saying they (decision-makers) just recently got smart? Why were they not trying to be efficient circa 2004?

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Maybe as their coaster count goes up, the wait times are lower, and as people get off rides faster and on to the next one faster, they get done with their day faster, and they are may be leaving earlier.

Also, this early in the year the crowds are mostly local school groups who are usually there first thing in the morning until the early evening.

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Jeffrey R Smith said:
SOMETHING changed THIS YEAR that led to the decision. That is the part that interests me...for some stupid reason.

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The lack of other ways to grow. The biggest parks are pretty much at the ceiling as far as attendance goes. Driving attendance as a means of growth for the larger regional parks that already do 3 to 3.5 million guests just isn't going to happen. (unless they find further ways to extend the season, but that's a different topic)

Continued financial growth has to come from elsewhere for parks in this 'maxxed-out' sort of situation. SF already started pushing in-park pricing to it's limit and from what I understand CF completely discountinued all of those "in-park reductions" that got played up last year in favor of pricing much closer to what SF is doing. That's one way of keeping revenue/profit moving.

Another good way is to cut costs. Which is what these hour reductions do.

So have they suddenly gotten smarter or suddenly found ways to super-accurately measure those numbers? What HAS changed?

I say the game has changed.

My guess is that in the past attendance was still a way (and the preferred way) to bring in more money. We're finally at the point for some of these parks where that's just not going to work anymore.

(as usual, based on nothing other then my take as a complete outsider looking in :) )

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Jeff said:
Not true, Gonch. They don't do the open haunt stuff on Sunday nights at CP.

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Not always true. The open haunt attractions were open last year on the Sunday of Columbus day weekend.

Good news because im going to Cedar point tommorow and im glad to see they are staying open till 8. Im glad i got on this board tonight or i wouldnt have known until i got to the park..

I think the game has indeed changed, as Gonch said. Certainly exponential increases in capacity make a difference too. Every coaster ups the count by thousands of rides per day. Dragster aside, I never wait in the kinds of lines I did ten, or even five years ago.

And consider that the daily attendance average has to have gone down. If they did 3.4 million in 1994, without the benefit of all the fall days they've since added, that's a big difference to the 3 million and change they get now.

Personally, it's still about bean counting if you ask me. As they try to trim every little savings they can, they look at the historical data, make their best budgeted guess on attendance on an hourly basis, and decide whether or not they'll make a dime during a particular time span. What changed is that the company is double the size, and they have acquisitions to pay for.

Wow. OK, I've admitted being TOO involved in the business end before. Here's a thought that REALLY makes sense to me in alot of ways, from my few days so long ago in the private sector. It might make sense. Probably not. :)

Consider that CF might have "profit targets" in terms of *percentages*. Many many companies think pretty highly of their "margin", and I'm not really sure why. ROI junkies love that stuff. Let's say you can make 25K/hr., net, for operations from 10a-7p.

You think to yourself "that's pretty good, I wonder what I'd make if I stayed open another hour." Who wouldn't, right? Turns out I'd only make 10K staying open for that last hour. My company insists that for MY bonuses, raises, stock options, whatever, that I make 20% per hour of operations. Without mention of total profit. Well, as fate would have it, my raise might be earned if I end up making LESS money in terms of total revenue. So, I close earlier, and make more money for me. Less for the company, though.

Having the new parks might make someone think more about how much money you can earn overall (to pay down the debt), and a little less about what "percentage" you're making. It's one of a million possible conclusions...maybe more... ;)

*** Edited 5/22/2007 4:07:58 AM UTC by rollergator***

Cedar Point will have a tough time EVER setting attendance records again. They are located between two of the fastest shrinking metropolitan areas in the country (Detroit and Cleveland). Sans a change in the demographic shift…they’re screwed on that front.

I wonder if they ever thought of driving revenue through some sort of City Walk type arrangement on the peninsula. Close the park early…but give people another reason to spend a dollar…and stay on property. I always felt the waterfront was perfect for a late night party zone…just not sure how it fits with the family-friendly emphasis…but I think you can capture a bit of both if done correctly. Food, shopping, and night-life seem like growth potential areas that could give more bang per buck than another coaster…but what do I know. I’m told I had a hell of a time the last time I went to City Walk though…spent A LOT more money than I planned. ;)

I could see them adding some sort of City Walk area, not sure exactly where, but they already have several restaurants around the peninsula that are open past the hours of the park and hotels. Would make for a nice addition.

Also, not knowing that the park was open until today, I was perplexed as to why all the rides were still operating at 7:30 today. ;)

The idea of more nightlife at the Point is something I've heard Jeff say for quite a while now.

I have to agree - seems like a logical progression.

Indeed. Preacher, meet choir. It'll never happen on Kinzel's watch, that I'm convinced of. He's just not into risk unless he can see it done somewhere else.

Being the first bird doesn't always mean you'll get the worm. There is nothing wrong with safe investments, especially during critical times for a company. Cedar Fair is in a critical period because of the Paramount acqusition. They are now in a position where they could follow Six Flags and slip.

The idea is that there is investments to be made for operations. The company invests in the labor, maintenance, and utility costs of operation. Cutting back operation hours during periods of low attendence is a good idea to keep costs down. Is it really worth it the costs for the company to give those who come to the park in May more value for their dollar than those who come in July? Less people in the park means shorter lines and more value for your dollar. It is therefore reasonably justifed in this case. Now that the expected crowds have been surpassed, the value is less and therefore Cedar Point extended hours to adjust.

It's obvious to me at least that Cedar Fair is extending hours as an investment. This investment is of the perception of value. People return when the feel as though they have received value for their dollar. Extended hours are therefore a long term investment.

The problem I see is in the Foods department, but that is another topic for another day.