Higher ticket prices increase Six Flags quarterly revenue by 6%

Posted Wednesday, November 3, 2010 12:29 PM | Contributed by Jeff

Higher ticket prices helped Six Flags Entertainment Corp. boost third quarter revenue by 6 percent, the Grand Prairie-based company said early Wednesday. The price hike is part of the theme park operator’s overall plan to pull away from steep discounting while trying to boost attendance with new rides and attractions.

Read more from The Dallas Morning News.

Thursday, November 4, 2010 10:12 AM
Tekwardo's avatar

I'm not necessarily saying the prices are too high, they're just too high for the service and quality you get at CF parks. If I'm hungry, I'll pay the convienience tax, but if I know the park has bad food, I likely will leave to get food, or wait till I leave if I'm not planning on being there all day. Sometimes, though, I'll cave, but I try not to at parks with terrible quality.

If the food is decent or good, I'll pay for it. Heck, I've left parks before and spent more on food at a nicer place than I'd have paid in the park, so it isn't about saving cash as much as not wanting to eat crap food.


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Thursday, November 4, 2010 11:52 AM

Lord Gonchar said:

GoBucks89 said:
Seems to me that saying CF food is underquality is the opposite side of the coin of it being overpriced.

Technically it is, in a vacuum.

It's overpriced for what it is on its own, but not overpriced in the larger scale of entertainment venue, 'captive audience' food pricing.

I agree with you but my post wasn't directed at you. Seems to me there are other folks in this thread and in other threads here and on CB discussing this issue who say they don't have problems with the price of the food but the quality of it. But if the quality was increased, the price would be increased as well which it seems to me will lead to the same statements that the food is overpriced and/or the quality is too low for the price.

And to me, the quality of the CF (really CP is my experience base of CF parks at least recently) food is on par with that at other amusement parks, sporting venues, movie theaters, ski areas, etc. Pricing seems to be on par too though I don't keep running totals or compare costs from place to place.

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Thursday, November 4, 2010 12:05 PM
Tekwardo's avatar

But if the quality was increased, the price would be increased

That's not an absolute. There are plenty of things you can do to increase quality (and we're talking both service and food quality here) without have a substantial increase in cost, which would lead to an increase in cost.

Then theres also the fact that it seems to me that CF in many cases over the last several years has gotten the cheapest food it can, while still charging the same amount it did, maximizing the profit. I don't have a problem with maximizing profits, as long as you're not charging me $10 for something that has a quality value of less than $1.

And I totally disagree with this:

...the quality of the CF (really CP is my experience base of CF parks at least recently) food is on par with that at other amusement parks, sporting venues, movie theaters, ski areas, etc.

I think there are certain things at CF parks (outside of just CP, where at least you have sit down options that you don't have at many of their other parks) that are on par, but thats the exception, not the rule. The food quality and quality of service is far less than other parks, sporting/entertainment venues/complexes, theaters, and ski areas.

I have no problem with paying for overpriced food at those other venues because the quality is often at least good, where as CF food is subpar. The food I had at SFoG and SFNE was decent food. I went to Carowinds 11 times this year, but rarely ate anything because the quality vs. price is so outrageous.

Pricing seems to be on par too though...

The pricing isn't the biggest problem. You have some people that complain about prices because the prices are high and they're cheap. But the biggest issue here is quality vs. price. I don't in any way think that the majority of food at CF parks is on the same level of many other entertainment venues where you pay a convienience tax. I think it's much worse.


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Thursday, November 4, 2010 12:12 PM
Lord Gonchar's avatar

GoBucks89 said:
Seems to me there are other folks in this thread and in other threads here and on CB discussing this issue who say they don't have problems with the price of the food but the quality of it. But if the quality was increased, the price would be increased as well which it seems to me will lead to the same statements that the food is overpriced and/or the quality is too low for the price.

And to me, the quality of the CF (really CP is my experience base of CF parks at least recently) food is on par with that at other amusement parks, sporting venues, movie theaters, ski areas, etc. Pricing seems to be on par too though I don't keep running totals or compare costs from place to place.

Pricing is totally on par. I still don't get anyone saying food costs at parks are too high. I'm assuming those people don't do much beyond go to amusement parks because evey single non-park related entertainment acivity I partake in has pricing similar to what the big chain parks use.

I will give people that at CF the quality is not there. Both in the food itself and the service. I always seem to have questionable experience on both fronts. Food service seems to be the weakest link in the chain.

With that said, I still buy. I'm not packing my own food or leaving the park and finding food and coming back. That's just not what we do. Frankly, for us, the hassle of the other options isn't worth it. We pay (as Tekwardo rightly puts it) the convenience fee and keep it convenient.

But more to your point, I think the idea is that other parks tend to offer the same quality for less or better quality for the same prices (or at least that's the rep that CF has built), so change needs to happen and CF needs to get more competitive (in either prices or quality) and close that gap.

That's where I think the gate needs to come into play. Make up some of the margins there. If you're paying stupid-low CF gate prices, you get crap food inside for high prices. Pay higher prices at the gate and well, think of the parks that are known for good food or lower prices in-park. They tend to be higher at the gate. (Busch, Dolly, Disney, HW)

You're right, though. It's not coming for free.

Last edited by Lord Gonchar, Thursday, November 4, 2010 12:13 PM
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Thursday, November 4, 2010 1:03 PM

Lord Gonchar said:
I still don't get anyone saying food costs at parks are too high. I'm assuming those people don't do much beyond go to amusement parks because evey single non-park related entertainment acivity I partake in has pricing similar to what the big chain parks use.

Sometimes, yes. A smaller version of Little Ceasar's "$5 Hot-N-Ready" pizza costs north of $15 at a Detroit Tigers/Red Wings game. But at those same venues, I can get a big ass beer (or fruity adult beverage) for about the same price as a 32 oz. soda at CP. That's insanely high.

But yeah, beyond the soda, most stuff at CP seems on par with price, but horrendously out of line when it comes to value.


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Thursday, November 4, 2010 1:14 PM

djDaemon said:
But yeah, beyond the soda, most stuff at CP seems on par with price, but horrendously out of line when it comes to value.

Exactly. I don't even think twice about paying the same price, if not more, for similar items (burger, pizza, etc.) at a ballgame or hockey game. But go to Cedar Point, and that money stays in my pocket. Between waiting forever for the food and it being cold and/or under cooked, it's not worth it.

The worst part: these aren't difficult issues to fix. In fact, they are very simple things to address, it just takes someone stepping up to address them.


John
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Thursday, November 4, 2010 1:35 PM

That's what's so funny about the CP/CF pricing "strategy". I spend anywhere between $20-150 at ball/puck games or concerts (over ~4 hours), and perhaps $3-10 at CP (over ~10 hours). And it's because at a game, I'm actually getting something halfway decent for my money.

Last edited by djDaemon, Thursday, November 4, 2010 1:35 PM

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Thursday, November 4, 2010 1:35 PM
Tekwardo's avatar

think of the parks that are known for good food or lower prices in-park. They tend to be higher at the gate. (Busch, Dolly, Disney, HW)

And even in cheap enthusiast circles, you don't hear people complaining about the gate price OR the food price at those parks. I'd love to see a breakdown, excluding Disney which is a totally seperate best (though the comment Gonch made is still relevant) for those regional parks like Busch, Herschend, HW, etc. and the comparison of prices at the gate, the prices for food, per cap spending, and their attendance numbers, as compared to Cedar Fair parks.


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Thursday, November 4, 2010 1:44 PM
rollergator's avatar

Purely speculative economics re: park food. Parks (SF/CF) could spend $3 on something they'll sell for $8 and make a $5 profit. But, if they're willing to spend $5 and charge $12, they're making $7 - and I'm happier because I'm getting decent product for my money. Yes, it's expensive....but I don't feel "ripped off" because I actually got food I enjoyed. Doubt that I'm alone here, but that "I feel like I got screwed" feeling comes around when I realize the food I paid for was of such poor quality I wouldn't have eaten it outside the park at all regardless of price.


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Thursday, November 4, 2010 1:58 PM
Tekwardo's avatar

That's the best way I've heard it explained. Right on, Billiam ;).

(Maybe I really should go read freakonomics)


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Thursday, November 4, 2010 2:23 PM
Lord Gonchar's avatar

djDaemon said:
But at those same venues, I can get a big ass beer (or fruity adult beverage) for about the same price as a 32 oz. soda at CP. That's insanely high.

But yeah, beyond the soda, most stuff at CP seems on par with price, but horrendously out of line when it comes to value.

My last two non-park stops were Paul Brown Stadium and the local Regal Cinemas in our neighborhood.

At Paul Brown beer was $7.75 a bottle and soda or water was $4.50. At Regal a medium soda is $4.50 and a large is $5.50.

Pretty much in line with Kings Island's drink pricing.

(comparing what are all generally SW Ohio establishements)

rollergator said:
Purely speculative economics re: park food.

Parks (SF/CF) could spend $3 on something they'll sell for $8 and make a $5 profit. But, if they're willing to spend $5 and charge $12, they're making $7 - and I'm happier because I'm getting decent product for my money.

I'd charge an extra $5 at the gate, buy the better food for $5 and then sell it for $10, making the same $5 profit on food as if I were running the 'cheap plan', plus pocket the extra gate dollars and be offering the same quality food for $2 less than your park. ;)


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Thursday, November 4, 2010 2:37 PM

Tekwardo said:
I don't have a problem with maximizing profits, as long as you're not charging me $10 for something that has a quality value of less than $1.

But if thats the price level at which you maximize profits, then that is the price level you set. At any given pricing level, you will lose folks who would have purchased at a lower price. If your goal is to maximize volume, you will reduce prices. Not necessarily the case if you are looking to maximize profits.

What would CF's admission price be today if it had followed average sporting event ticket prices?

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Thursday, November 4, 2010 2:49 PM
rollergator's avatar

Lord Gonchar said:
I'd charge an extra $5 at the gate, buy the better food for $5 and then sell it for $10, making the same $5 profit on food as if I were running the 'cheap plan', plus pocket the extra gate dollars and be offering the same quality food for $2 less than your park. ;)

Nobody told me I could mess with gate pricing! ;)

Shoot, why not just charge $100 to park your car and let everyone in "FREE"! :)


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Thursday, November 4, 2010 3:02 PM

Regulus said:


The only thing I purchase at the park is a Bottle of water, which I'll Flavor with a Powdered Beverage that I brought in from outside (Concealed in my pockets, of course). Refills are made at the Drinking Fountains, and after I leave the Park, I'll have TWICE the Food for HALF the money! :)

Actually, CF parks typically permit you to bring a water bottle into the park anyway, so you really don't even have to pay that exorbitant price once.


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Thursday, November 4, 2010 3:04 PM
Lord Gonchar's avatar


Tekwardo said:
I don't have a problem with maximizing profits, as long as you're not charging me $10 for something that has a quality value of less than $1.

GoBucks89 said:
But if thats the price level at which you maximize profits, then that is the price level you set. At any given pricing level, you will lose folks who would have purchased at a lower price. If your goal is to maximize volume, you will reduce prices. Not necessarily the case if you are looking to maximize profits.

And that's the sticking point that so many 'price complainers' don't seem to understand. Selling more product does not automatically equate to making more money.

That's exactly why the "I would never buy a $4 soda" and "I go outside the park to eat" and "I spend more when prices are lower" arguements don't matter.


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Thursday, November 4, 2010 3:07 PM
Tekwardo's avatar

Bucks, what I was saying (as a personal observation) was basically what Gator said. If the food that costs $10 at the park is food I wouldn't even buy for $1 outside of the park, then I'm not buying it.

I was basically saying that I don't have a problem with them adding in a convienience tax to the food, but it had better be food I want to eat. Otherwise, I won't.


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Thursday, November 4, 2010 3:22 PM

Thats all well and good. But my point is that if there are enough folks willing to pay $10 for the $1 food, the park will go with the $10 price. And even at $10 for $9 of food, some folks won't find value and won't buy. So the fact that some folks won't buy at a given price point doesn't in and of itself mean much.

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Thursday, November 4, 2010 3:24 PM
rollergator's avatar

^Which explains part of my fascination with Disney - sure, I get in for free (or however they factor SP admissions). But the food I'm getting is typically cheaper than CF/SF food, and it's infinitely better. Perhaps "infinitely" isn't strong enough a word. The food I eat at, say, The Land Pavilion is as good or better than what I typically make at home (and trust me, my food is TASTY). Then when I go to the register and find out how little they're charging me, it makes me feel like I'm "valued" as a customer.


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Thursday, November 4, 2010 3:36 PM
Tekwardo's avatar

But my point is that if there are enough folks willing to pay $10 for the $1 food, the park will go with the $10 price.

And unfortunately we don't have hard evidence saying if customers are paying the $10 or not, or if Kinzel & Co. are just stubbornly charging that.

But then you look at the overall financials and see that there has to be some issues. Notice what Jeff said in the recent thread about their 3rd quarter results:

If you read between the lines, profit is actually down. I love the way they bury that.

I'm not saying poor food quality is the reason profits are down, but is it a factor? Would bumping the gate up and selling better quality food (with better service) cause profits to go up even if food quality isn't currently an issue?

It doesn't matter that some people are willing to spend while others aren't, if there is a way to actually make money there, and it's obvious looking at the parks Gonch mentioned that this is possible, why aren't they doing it? Much like queue management and pay to cut, why aren't they doing that when it's a gold mine?


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Thursday, November 4, 2010 3:44 PM
Lord Gonchar's avatar

Tekwardo said:
And unfortunately we don't have hard evidence saying if customers are paying the $10 or not, or if Kinzel & Co. are just stubbornly charging that.

I think people are paying it. At least enough that it's damn close to the 'maximized profit' point we're talking about.

I base that on the fact that I physically see lines at the parks coupled with the fact that the prices aren't out of line with other entertainment venues.

That leads me to believe they're in the neighborhood of that magical maximized profit point.

Which is a nice way of saying that it doesn't matter if everyone who posts on every enthusiast board on the internet thinks prices are too high or quality is too low - the right number of people are buying at the right price to make the most money.


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