Six Flags Economics

Friday, April 1, 2005 11:12 AM
There was an interesting article on www.bizneworleans.com that discussed the issues at Six Flags New Orleans.

I don't want this to become a Six Flags bashing thread. I personally thing they have decent to good parks but bad to horrid management.

Of interest in the article:

Six Flags has never made a profit since Premier bought the company from Time Warner in '98.

2004 net loss was reported at 5.23 per share for 2004...compared to .90/share in 2003. For the fourth quarter ending 12/04 they lost $109.5 million vs a loss of $79.5 million the previous year.

Burke, of course, blames national economics for the bad performance of recent years. He uses that excuse even as other theme park companies hold their own.

With all the pressure on Eisner to leave Disney I am just amazed that Burke continues to survive. I can't help but think that his time is running out and we may see more park dumping ala World's of Adventure in the near future.

When I worked for Funtime (Geauga Lake) we always knew the potential of that park was never met due to leadership. The Six Flags purchase gave hope but that was quickly dashed. Cedar Fair has another opportunity now.

But, that could be the scenario on a greater scale with the entire Six Flags property. I suspect that good managers at individual parks have moved on because of the direction (or lack thereof) of corporate leaders. Perhaps a Save Six Flags group needs to be formed and Burke should be given his walking papers.

As a theme park enthusiast who loves ALL parks, I hope the potential of Six Flags can be lived up to once again.

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Friday, April 1, 2005 11:18 AM
Six Flags sucks ;)

mOOSH [I always skip the second sentence of each post]

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Friday, April 1, 2005 11:23 AM
'moosh...I should have seen it coming from you! :-P
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Friday, April 1, 2005 11:39 AM
Once Burke gets his walking papers, then hand over the reins to some of the better peeps at SF....i.e., NOT Del Holland, LOL...;)

When WE can come up with a half-dozen or so SF parks that ARE well-run, and DO "maximize potential", then it shouldn't be THAT hard for the board to determine who SHOULD be running the company....

SF economics is simple...provide a guest experience that increases DEMAND, the rest will follow suit...:)

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Friday, April 1, 2005 11:51 AM
Well, it isn't that simple. Some of the damage is irreparable. Going on a park buying spree in the late 90's was a huge mistake that will hold back the company for a while.
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Friday, April 1, 2005 11:53 AM
Well wahoo, as an economics major it IS that simple for me, LOL. But then again, we're *trained* to think in terms of the long run....SFI can't seem to think beyond the next (rainy) season...;)

Americans in general have a memory deficiency (I blame the liberal media, ROFLMAO)....if SF really brought in a "hospitality first" mentality, the mistakes would be quickly forgotten by the majority of guests. I agree that the balance sheet WILL continue to haunt them...and if interest rates spike their debt/asset ratio will eat them alive...but with their ability to generate revenue, good management practices would be able to overcome those issues... *** Edited 4/1/2005 4:57:23 PM UTC by rollergator***

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Friday, April 1, 2005 12:33 PM
I'm very interested to see how the Great Adventure situation turns out. From the pictures I've seen from opening day, there is a lot more attention to detail, including themeing in the Golden Kingdom. The paint jobs on some of the rides and other structures don't hurt either. I'm also curious to see how Hurricane Harbour at SFA turns out. It could be just good PR, but, the waterpark is supposed to look radically different, to the point of being unrecognizable. I'm wishing them a prosperous year so everyone can get more stuff the following year.
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Friday, April 1, 2005 12:43 PM
I think the biggest problem is that they do run it with "proper" economics, it's just that those come out of a book that's generalized for all situations, not amusement parks. Six Flags' problem to me seems to stem from the fact that the people running the show, and those who are below them really have no idea what the ins and outs of running an amusement park are.

They try build-it-they-will-come, but we all know that doesn't work, they try to throw low price season passes at people, but people just take advantage of that and spend less. No one at SF understands why shiny new machinery doesn't produce more profits, that's what happens in an auto factory, that's what happens when you give new, faster computers to office workers, so why the heck doesn't it work at an amusement park? Cedar Fair has a significant core of their management group that started out in the parks, even as seasonals, and I think that is the biggest difference between the two. Those guys know what the people are thinking, they were out among the guests for years, they're a lot more in tune with the business they're in, and they're not trying to generalize based on a textbook. Even Paramount and Universal are different because their management is still based in an industry focused on entertaining people, not producing goods.

But, it's going to be hard to change that thinking because Burke and co. have no idea why their ideas aren't working because they're thinking like industrialists, not entertainers. And you're not going to get much help from the stockholders either because the bulk of the stockholders are probably the same ones who can't seem to understand why Cedar Fair posts significantly lower profits in the 4th quarter (which is blatently obvious to anyone who looks at the situation considering all factors, not just those written in an economics textbook).

That'll be $0.02 please ...

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Friday, April 1, 2005 1:01 PM
Not giving away the gate would be way to get some extra cash. If you price yourself like a 2-bit whore that's how people will view you.
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Friday, April 1, 2005 1:16 PM
I absolutely refuse to believe that Six Flags can't be improved. On the strength of great rides and little gems of positive experience here and there, the whole chain certainly has the potential.

But it must start with booting Burke. What kind of crack monkeys on the board would continue to let this guy run things? If Eisner could be pressured out for making a recovery through a tough economy, and Carly Fiorina can be let go for leading one of the biggest tech mergers ever, how does anyone let this guy continue to work?

Aside from the purchase of Sea World Ohio, I don't think that the company has made any real serious blunders in terms of strategic moves. The acquisitions made sense, as has most of their capital expenditure program. Where they've fallen short time after time is in the guest experience and horrible pricing. They've got a good marketing plan in place, and if they can fix those two problems I suspect things can turn around.

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Friday, April 1, 2005 1:40 PM
These are some excepts from the Article but some are not all that correct, one of the areas was turned mostly into vending machine area and sit down area and one into greenspace.

(I honestly don't think that the patrons filed request's for more greenspace at the cost of ride removals, ,granted the rides they removed were maintenance headaches but for SF to say the ride removal was for greenspace. Hell, if remove any more rides for greenspace we won't have anything to ride, I am sure the waterpark / new addition request's far out numbered the greenspace request. I think the park should have not cut the hours but given the patrons a reason to stay in the park longer)

Six Flags corporate spokeswoman Debbie Nauser said the changes at the local park reflect the desires of guests who had requested more green space. The section of the park where the Voodoo Volcano and King Chaos rides once stood has been transformed into grassy areas with benches, shade and misting machines. In addition, she said the reduced hours reflect guest visitation patterns.

Dennis Speigel, president of Cincinnati-based International Theme Park Services Inc., said the company’s decision to eliminate rides and cut hours at the New Orleans park “is symptomatic of problems and operating cost issues.” He said if anything the park should be expanding ride offerings in an attempt to boost languishing attendance figures. The theme park, formerly known as Jazzland, opened in 2000. Six Flags bought the park out of bankruptcy in 2002.

The New Orleans park has been a disappointment from the beginning, he said, and the Six Flags name has done little to improve the park’s performance. Unlike some of Six Flags’ other purchases, the acquisition and commitment to invest $25 million in Jazzland was not a bad deal where the company was concerned. However, he said, Six Flags was basing the park’s growth potential on flawed tourism numbers that ignored the fact that many visitors to the area have similar or even larger theme parks near their homes and come to New Orleans for other reasons. In addition, he said, the strong regional drive-in market that was forecast “never materialized.”

Six Flags does not release attendance figures for its individual parks. Nauser said the company believes in its New Orleans park and its potential. "We are committed to the New Orleans community and Six Flags New Orleans and will continue to make improvements on an ongoing basis,” she said, adding that the company has already made a significant investment of $25 million. “


Another question is whether Six Flags will make good on its plans to build a water park adjacent to the local property. A New Orleans water park would likely do very well given the area’s climate, Speigel said. But ideas for such a park have floated for decades with no official proposals.

Nauser said a water park has always been a part of the company’s master plan for New Orleans, but declined to say when the attraction might be built. “We continually review all 30 Six Flags properties and … announce new additions to our parks on an annual basis,” she said.

We shall wait and see what 2006 brings!! What the park needs is something that gives locals and Non Locals a reason to visit the park, granted we have a batman ride and a CCI coaster, but something is missing that will draw customers to the park! I have included a link to show the area that once housed the ride and now has been transformed into greenspace,,It's awesome think about the shade in about 10 years

http://www.sixflagsneworleans.com/images/galpics/3202005-11.gif

http://www.sixflagsneworleans.com/images/galpics/3202005-9.gif *** Edited 4/1/2005 7:02:04 PM UTC by CrazyB*** *** Edited 4/1/2005 7:07:09 PM UTC by CrazyB***

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Friday, April 1, 2005 6:47 PM
Here is my 2 cent. Forget what any paper or news said about why the original change was made.

Options are

the space is left vacant and unuseable

Or

Turned into "greenspace"

Clearly, there is no option for new attractions this year.

I like the greenspace!

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Saturday, April 2, 2005 12:53 PM
I don't think the comment about customers asking for greenspace can be dismissed. It's very possible that parents asked for it.

I think a lot of parents with children in their early teens want to be in the park to monitor their kids, but don't want to ride the thrill rides. They'll ride the scrambler with their kids, but not the big coasters. They would rather just chill in the shade and watch the kids do the more extreme rides.

So, I think the greenspace makes sense if
it is near Batman or Megazeph or the more intense flats, or if it's near a bunch of kiddy rides where the whole family can take a
break. If the greenspace is off in a corner with no rides nearby, then it may not actually address the need (I've never been, so I don't know the layout).

Parents control a lot of the money that flows into amusement parks, so it makes sense to address their concerns.

I don't know about the rest of you, but I dislike parks that are concrete jungles with no shade.

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Sunday, April 3, 2005 6:35 PM
SF has to realize that if they want to improve the bottom line then they need to make there parks more FAMILY friendly.
While a coaster thats 400ft tall may impress coaster enthusiasts, it will do little to induce families to come and visit and spend money.
SF needs to stop selling season passes so cheap that the parks become day care centers for teenagers who create long lines but dont generate alot of revenue and develop parks that are more family friendly, have better and cheaper food options. And that can statrt by having friendler staff,cleaner parks and more rides the whole family can enjoy together.
Until they do this they will just lose more money each year.
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Sunday, April 3, 2005 7:16 PM
If everyone here who complains about SF would each buy ten shares of stock in the company maybe we all could be on the board. Although I do see things that could be improved there are many more things that I love about these parks. Great Adventure has an awsome collection of B&M coasters, SFNE has a family friendly atmosphere with lots of shade, and SFoG has provided me with lots of summer fun in the past. Granted I see where there is a need for better management in the guest service aspect, but I don't think that too many parks out there don't have simmilar problems in that department. They get away with it by sugar coating everything with lovable mascots or theming the crap out of cinderblock buildings.

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