Posted Wednesday, November 5, 2008 9:42 AM | Contributed by Brian Noble
"Although Dollywood was excited to announce Adventure Mountain for 2009, the ongoing downturn in the economy has created unpredicted changes in cost and availability of basic materials like steel and concrete used to build the new attraction. Therefore, Dollywood is choosing to take a proactive step to delay the Adventure Mountain project."
Read the entire statement on the official Dollywood site.
Hmmm. Celebration City closes. Now this gets put on the back burner.
I wonder how hard Herschend is getting hit?
They only did this because Dolly voted for McCain. I call shenanigans.
(huge winky face)
You're looking economically disadvantaged, Dolly!
She's behind on her financing payments for cosmetic surgery, and has to make up for it.
I don't think I'd read any more into it than what they're saying. Although it does seem like the cost of building materials wildly varies from one region to the next.
But Dollywood doesn't have very far to go for wood . . . just drive up the mountain and chop down another flatbed of charm. ;)
I have to agree with Jeff that there isn't more to this than some think. It's not the first time an attraction has been axed due to materials costs. Hershey's Frequent Faller project is the most recent that comes to mind.
It seems like something more than nothing when you add in Celebration City and the delay of the SDC river battle project.
Plus the excuse doesn't jive as the price of steel is now WAY lower then it has been in a couple of years.
So because you say so they're just imagining it?
wrt material prices: It is also possible that the problem isn't that raw material prices are extremely high or low, but that those prices are so volatile that budgeting is nearly impossible...
--Dave Althoff, Jr.
(You want HOW MUCH for a 15' VGA cable?)
It could also be that any major contractors who might do this are booked or don't want the risk of getting halfway done, then having the park go belly up.
Material cost is volatile, but I thought that the cost of building was way down and contractors are hungry for work. Also, there are plenty of places that are moving forward with their projects. There have been a lot of cuts by these guys recently. Herschend seems to be in cost cutting mode, but for what? I thought that their parks were doing well. Of course it may be a precautionary financial desicion to protect themselves a little for next year. It seems logical that they may forsee a hard year next year and plan for that.
Just to play the devil's advocate for a moment though, could these decisions also involve a certain plot of land off of highway 17 in Myrtle Beach? Not that I believe every rumor I hear, it's just that this one seems to be making a little sense nowadays.Last edited by D the Great, Thursday, November 6, 2008 9:33 AM
Herschend manages the park, but it's my understanding that they don't own any significant portion of it. If that's the case, cap ex is going to come down to whether or not the Dollywood company wants to spend the money.
From what I've read on the subject, Dave is right, that prices for raw materials are absolutely all over the place. It's true for all commodities right now. I mean, gas is under two bucks here now, when it was over four six months ago. That's nuts.
It's not just that gas has gone from >$4 to <$2 in a matter of *weeks*. Oil and gasoline seem to be the exception in commodities and raw materials. I just looked at a few charts chosen at random (google is your friend...) for gold, silver, copper, aluminum, and steel, and all of those have seen wild price swings. Oil has basically just crashed from nearly $150/bbl to around $65/bbl, but even at that, its price has been swinging through about a $10 range every day. Gold is probably the most extreme example (particularly since the gold trading market has little to do with real world uses) where during October the price has been everywhere between $800 and $1000 per ounce. I am not familiar with the standards for other metals, so I can't interpret the numbers in terms of cost per unit (don't know which currency, don't know what unit), but just for October, the price swings on everything I looked at have been absolutely crazy. If you are a low-volume user of raw materials, how can you budget for that? It's just like what Interactive ran into with the Hersheypark deal a couple of years ago: the materials price took them from being able to make a tidy profit to not being able to fabricate the ride.
It's not so bad if you're building commodity products and you are buying your steel a couple million pounds at a time (1M lbs = 500 tons). But if you're building *one* ride whose finished weight is going to be under 40 tons*, and you can't store a lot of raw material on site, how do you budget for that?
--Dave Althoff, Jr.
* Typical of a single-trailer portable ride: maximum weight without special permits for a semi trailer is 80,000 pounds gross.
--DCAjrLast edited by RideMan, Saturday, November 8, 2008 12:43 AM
You must be logged in to post