Does Amusement Park Food Have to Be Low-Quality?

Friday, August 13, 2010 5:03 PM

Jeff said:

Except that potential is not met when per caps go down, as we've predicted they would for several years now.

But there's no way to know if that's because of the pricing or because of infinite other reasons.

Per caps dropping is not a positive trend (unless attendance keeps rising, I suppose), but it alone doesn't indicate a problem with pricing.

With per caps numbers we know people spent less. We don't know why.

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Friday, August 13, 2010 5:04 PM

I prefer the atmosphere.

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Friday, August 13, 2010 5:16 PM

Is that anything like charm?

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Friday, August 13, 2010 5:48 PM

No...it's a lot more like chram :)

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Friday, August 13, 2010 10:15 PM

Jeff said:

This is not any more of a justification for the way things are than, "Well so and so does it this way, so should we." People are always so quick to explain why it's not a fair comparison, but people are doing it anyway, so apparently it's valid to a lot of people.

I think if people are saying, "Hey, I get great value/quality at Disney then I should be able to get it at Cedar Point," then that's a valid comparison statement. I think when it becomes, Disney provides value/quality by doing X, Y, and Z so Cedar Point should be able to do the same thing," then the comparison becomes invalid.

The two business structures are completely different. The experiences they offer are completely different. Guest behavior in terms of length of stay, planning ahead, etc are completely different. Hell, the general guest demographic is a lot different.

What works for Disney in their quest to provide value may not work for Cedar Point. Sure, Cedar Point needs to figure out their own method and make it work, but I don't think they can just do what Disney does so to speak.

Now if you want to talk about what Holiday World, Knoebels, and Kennywood do and draw the comparison, then I can get on board with that. They seem like a more reasonable peer group if you ask me.

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Friday, August 13, 2010 10:51 PM

Oh, I totally missed the first half of Jeff's double post earlier.

But yeah, generally what Carrie said.


Jeff said:

I tend to believe it's fair and correct to compare the two since they're both places I spend discretionary dollars. I consistently don't feel like I get amusement/theme/resort bang for the buck in Cedar Fair parks, but feel like I do at Disney or Universal.

That's fine. As a customer you compare what you get. Makes sense.

You're presenting an entirely different line of thought regarding value and the customer experience. You're simply saying that you don't feel CF offers the same value as Disney. I think we all agree. Hell, I've made a point to agree with that from the start.

The argument in this thread hasn't been that. The argument is to look at Disney's price boards and then Cedar Point's and proclaim that if Disney can print a certain number on theirs that Cedar Fair can too.

But "Disney sells food for lower prices" is not justification for saying Cedar Fair prices should be (could be, need to be?) lower.

Kennywood sells food for less than Disney, so using the same logic - Disney prices are too high because Kennywood has cheaper food.

And Knoebels has some lower prices than Kennywood, so Kennywood must be WAY overpriced because I can buy food at Knoebels for less.

You get the point. If Park A sells a burger for $6 and Park B sells one for $10 it doesn't mean Park B is overpriced or that Park B could even sell theirs for $6 because Park A does or whatever.

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Friday, August 13, 2010 11:15 PM

Lord Gonchar said:
Your lack of purchasing is potentially made up (and then some) by someone like me who does pay the high prices and not limit my purchase just because of the bumped up costs.

Well yes, but like you say, you're going to pay the high price anyway, no matter how bad the food is. My thought is that they should be trying to lure in the people who wouldn't normally buy their food; in other words, aim for the fish *outside* the barrel as well. :) But I also realize that I'm the polar opposite of the majority/target market, so there might not be enough of us to make a difference.

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Saturday, August 14, 2010 12:00 AM

So you guys both agree with me and disagree with me. That's so bipolar. :)

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Saturday, August 14, 2010 12:41 AM

Lord Gonchar said:
All the anecdotal evidence in the world doesn't cancel this:

"Cedar Fair generated net revenues of $275.6 million in the second quarter of 2010...For the same period last year, the Company reported net revenues of $264.1 million..."

Granted, that says nothing about from who, what or where the money comes, but that's not exactly the kind of thing that indicates you're out of line with the overall pricing of your product.

---

EDIT - Let me just point out that I tend to agree to some degree. CF food pricing is not a good value for the most part.

It just shows that as a result of more people buying season passes and tickets their revenues went up. I would guess more people are coming to their parks and getting season passes is because of the economy. People aren't traveling as much now and want to stay close to home. So rather than go cross country a family will buy season passes.

Per caps still went down for that time period, and that does show their pricing is out of line for food and merchandise. If they priced their food and merchandise better per caps would go up or at least stay stable. They should differentiate their products more. Such as price the crap they have now lower and provide premium products at a higher price for people such as yourself who will spend more. That's the best way to get money from everyone.

In the coming years as the economy improves and people start traveling more they will probably have a drop in season pass and ticket sales while still have dropping per cap spending.

Last edited by BDesvignes, Saturday, August 14, 2010 12:43 AM
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Saturday, August 14, 2010 1:21 AM

BDesvignes said:
Per caps still went down for that time period, and that does show their pricing is out of line for food and merchandise.

No, it doesn't. It just means each guest spent less for their day at the park. You guys are filling in the blanks based on your own preconceptions. There's a laundry list of things that they could be spending less on. Hell, you gave a good potential example yourself:

It just shows that as a result of more people buying season passes and tickets their revenues went up.

If more people are buying passes and, in turn, using those passes to visit the park more, it explains both the increased attandance (more visits on a pass) and the decreased per caps (paying less per visit for several admission on one pass).

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Saturday, August 14, 2010 1:47 AM

Yes that is a factor in the per cap spending being lower, but people are also spending less on food, merchandise, and games.

For the 3 months ended June 27, 2010 each guest spent $15.21 on food, games, and merchandise. The cost per guest was $3.97 resulting in a profit of $11.24 per guest.

For the 3 months ended June 28, 2009 each guest spent $15.44 on food, games, and merchandise. The cost per guest was $4.00 resulting in a profit of $11.44 per guest.

So that's a drop of 23 cents (2%) or 20 cents excluding costs per guest for food, merchandise, and games for that period.

With the numbers they provide it's not possible to see specifics though. Food sales could have increased while game and merchandise sales dropped a lot. It would be interesting to see specific numbers and be able to see the rationale for their pricing.

EDIT: Also if you look at the year long numbers attendance is relatively flat (down .8%) spending on food, games, and merchandise is down 3.6%.

Last edited by BDesvignes, Saturday, August 14, 2010 1:55 AM
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Saturday, August 14, 2010 3:25 AM

BDesvignes said:
With the numbers they provide it's not possible to see specifics though. Food sales could have increased while game and merchandise sales dropped a lot.

Exactly.

It would be interesting to see specific numbers and be able to see the rationale for their pricing.

Totally agree.

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Saturday, August 14, 2010 2:39 PM

Sure Disney's Burger and Fried Chicken meals are mediocre but all you need to do is branch out a bit and you can get some healthy counter service options.

Maybe. The rotisserie chicken, as often as not, is simultaneously greasy and overcooked. The fish and chips at CHH are average. Sunshine Seasons in Epcot looks like it should be good, but somehow they always miss the mark on execution.

The sit-down places, likewise, are usually over-priced and very average. I can get better food for a lot less here in my little college town in almost any genre that Disney offers. The glaring exception is Mexican, though that's more to do with the horrid Mexican options here as opposed to the high quality there.

On the other hand, the ribs at AK aren't half-bad (though a bit on the pricey side), the sandwiches at CHH (especially the vegetarian one) are pretty good, and the platters at Tangerine Cafe are *great*.

*For a theme park*, Disney's food is pretty good. In absolute terms? Spotty execution, but as often as not it just doesn't measure up.

Edited to add: The Busch parks seem to be in the middle in terms of both quality and price---more expensive that (but not as good as) Disney, and less expensive (but better than) CF/SF. But, Busch's price point for the gate is in the middle too. Perhaps that Gonch guy is onto something.

Last edited by Brian Noble, Saturday, August 14, 2010 2:43 PM
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Saturday, August 14, 2010 11:34 PM

If Kinzel is the micro-manager he's made out to be on this board, then he knows with 5 dollars how much revenue the chain has taken in on food and drinks each year for the past umpteen years. We can surmise whether per caps from food and drink purchases are increasing or decreasing. Personally I think they're decreasing. The one number nobody knows, and was alluded to by Jeff, bird, and a few others earlier, and that is the amount "being left on the table" as it were by the people refusing to pay high prices for what they believe are low quality offerings.

As a unitholder, I first and foremost want to see revenue and per caps go up across the board. I don't want to hear that food sales went down, but revenues increased somewhere for a net increase of 0.5% each year. Gonch, you've said it many times that CF is not able to increase attendance significantly across the chain, so they have to increase revenues on the per cap end.

I think food service is a place they can and should look to increase revenue. There are two ways they can do that: raise prices, or raise demand and sell more. I think we've seen the former the past few years, and it hasn't worked. Is it ever a good idea to raise prices when demand is falling? I think they need to consider the second idea-- raise demand by improving the quality of the food and selling more of it to more people.

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Sunday, August 15, 2010 1:29 AM

RatherGoodBear said:
I think they need to consider the second idea-- raise demand by improving the quality of the food and selling more of it to more people.

Again, it's cute on paper, but just because you lower the price by 5% or increase quality and increase costs by 5% doesn't automatically mean you sell 5% more product.

How do we know they're not at a point of diminishing returns?

(and the answer isn't, "Because other parks do such and such.")

Again, not saying that the price or quality (or both) couldn't be improved. Quite the opposite. Just pointing out that better food or lower prices and increased demand doesn't immediately equal more money.

I think food service is a place they can and should look to increase revenue.

I think their gates need to be $5 or $10 higher.

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Sunday, August 15, 2010 1:42 AM

I think we already know that the present system is anything but cute on paper. Maybe "we" don't know they're not at a point of diminishing returns, and you're right that nobody can say what the result will be if they change their focus to improve the quality of food offerings. But what business decision is ever made with results already known? Saying we don't know what will happen shouldn't be an excuse for not trying something different. (I hope I don't have too many negatives in that sentence.)

They're in the business to make the most money they can within existing constraints of course. So why not try to increase revenue in every segment? To me, it's a cop out to settle for one part of your business being crappy and underperforming and making up for it in another area. Not to say they couldn't raise gate prices if the market can take it, but they shouldn't do it because they can't or won't try making more money in an area they know needs improvement.

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Sunday, August 15, 2010 2:18 AM

Well, I like to believe they do know what the results will be - or at least have a hell of an educated guess. Perhaps I give too much credit?

I remember the big "we're dropping prices" experiment of a few years back.

I also remember them going right back to where they were the next season.

They see the numbers every day and yet the food prices/quality remain where they are.

I'm not saying the powers that be are infallible, but if I'm putting money on it, I'm betting on the side that has the info available to them.

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Sunday, August 15, 2010 1:01 PM

Yeah, I think you give them too much credit. As for that story in 2006, the way I understand it, the move to drop prices was essentially executed and publicized without dad's approval. He flipped out over the .25 cotton candy thing, even though he would often mention it to the press. That they reverted is not indicative of failure, it's indicative of The Man not letting it continue. Oh, and I seem to recall per caps went up again slightly that year.

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Sunday, August 15, 2010 1:03 PM

Lord Gonchar said:
Again, it's cute on paper, but just because you lower the price by 5% or increase quality and increase costs by 5% doesn't automatically mean you sell 5% more product.

How do we know they're not at a point of diminishing returns?

(and the answer isn't, "Because other parks do such and such.")

Again, not saying that the price or quality (or both) couldn't be improved. Quite the opposite. Just pointing out that better food or lower prices and increased demand doesn't immediately equal more money.

If the quality of the food was better, and the prices were adjusted a bit lower, I have no problem spending my money. I seem to be hearing a lot of complaints from people(even non coaster geeks like us :)) that the food prices are too high, and the quality is horrid. Other parks seem to be able to do this, so why can't cedarfair figure this out. Even six flags is doing a better job at food quality and prices.

I was just talking with some in line at the store the other day(he saw that I was wearing a ravine flyer T shirt), and the convo was about parks. He was telling me that him and his family had just got back from cedarpoint, and he had a good time, but he said it was too expensive. He mentiond the lousy food and the crazy prices for it. I never even mentiond food, he brought it up. He also mentiond that he will be bringing his own food next time.

That's what the big problem is going to be. Even if they did fix the food problem, it's going to take a while to start showing a profit because people are going to remember that lousy food and prices and be bringing there own food or even leaving the park to eat.

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Sunday, August 15, 2010 2:45 PM

crazy horse said:
If the quality of the food was better, and the prices were adjusted a bit lower, I have no problem spending my money.

Again, great. But do sales go up enough to cover the reduced profit margin on higher coasters and lower revenue?

You can't just say that improving quality or lowering prices means more people buy so they make more money. It doesn't necessarily work that way. It's possible to make less money with more sales.

Isn't that supposedly (at least in part) the logic with CF preferring Snoopy to Nick?

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