Six Flags Exclusive Adventure
RatherGoodBear said:
What all are considered operational expenses? And how would a decrease in attendance affect them?
An excellent point, and a bit surprising it took this long to enter into the conversation.
Amusement parks have an awful lot of fixed costs, as RGB pointed out. Property taxes/land leases are going to remain the same, regardless of how many people visit the park. Ditto for maintenance, advertising, management and human resources. Actually, there isn't much that can be trimmed from an amusement park;s operating expenses- maybe an employee or two can be trimmed from a coaster's staff by running fewer trains because there are fewer people in the park, but that's pretty much it. Closing rides is an option, but didn't that get companies like Six Flags into their current predicament? And why close food stands and restaurants? That would eliminate ways for people to spend money.
Say 50 hourly employees at $7 an hour for 12 hours a day. That's $4200 a day.
150 days in an operating season and suddenly you saved $630,000.
And I don't think that's unreasonable. A restaurant currently running with two cooks and 4 counter workers could offer the same level of service to a crowd 1/2 the size with 1/2 the staff. With less guests there's less midway sweeping, less garbage removal. Less guests through the gate means less need for workers at the gate like ticket sellers and ticket takers. Less guests means less showtimes are needed. Less guests means you could pull one member of each major ride's staffing with no ramifications. There's probably plenty of places to reduce staff that I'm not even thinking of.
If you could offset reduced attendance with an equivalent gate increase and reduce your daily staffing by just 50 employees - you're making well over an additional 1/2 million dollars per season. Reduce the staff by 80 employees and you're keeping an additional million dollars per year.
And that assumes you change nothing else about your operating costs.
I even concede as much as JRS - I have no idea if this would truly work or not. It's not my money and playing with someone else's funds is so much more fun. But we've never seen a park really try it in any real sort of way. It makes perfect sense to me on paper, but real-world implimentation is a whole different story.
Only one way to find out... :)
Lord Gonchar said:
Say 50 hourly employees at $7 an hour for 12 hours a day. That's $4200 a day.150 days in an operating season and suddenly you saved $630,000.
And I don't think that's unreasonable. A restaurant currently running with two cooks and 4 counter workers could offer the same level of service to a crowd 1/2 the size with 1/2 the staff.
Aha, but that's just it-- that would just be maintaining the present (piss-poor) level of service. Even with half the crowd, the wait time will be the same, because the "capacity" of the stand was cut in half. Isn't the justification for these exclusive adventures and the price raises as LG and JRS propose an enhanced level of service?
Another thing to consider is that the food stand takes in revenue (unless we're doing all-inclusive adventures). Even at a snail's pace of 10 customers an hour, the 2 redundant count workers could serve 20 guests/hour, or 240 guests per 12-hour day. Let's be really conservative and say the average order is around $6.00. So the loss of revenue at this one stand is $1,440 per day, or $216,000 in that 150-day operating season.
In contrast, the savings in labor is 3 employees x $7.00/hr x 12 hours, or $252. Even the savings on food that doesn't have to be purchased, the cost to operate the grill, or the ketchup packets and napkins isn't going to be $1200 a day.
RatherGoodBear said:
Aha, but that's just it-- that would just be maintaining the present (piss-poor) level of service. Even with half the crowd, the wait time will be the same, because the "capacity" of the stand was cut in half. Isn't the justification for these exclusive adventures and the price raises as LG and JRS propose an enhanced level of service?
I knew you were going to say that! :)
For me it works on the principal that food service usually isn't sucky and when it is it's due to incompentence rather than staffing. In fact you kind of answer this for me with:
Another thing to consider is that the food stand takes in revenue (unless we're doing all-inclusive adventures). Even at a snail's pace of 10 customers an hour, the 2 redundant count workers could serve 20 guests/hour, or 240 guests per 12-hour day. Let's be really conservative and say the average order is around $6.00. So the loss of revenue at this one stand is $1,440 per day, or $216,000 in that 150-day operating season.
Yes, assuming the lost workers still need to be serving. The reduced attendance thing assumes they're now useless (because of less people lining up for food). Your not losing revenue due to lost sales by cutting them, you're reducing expenses by not paying them to do nothing.
In other words those two redundant workers could serve an additional 20 guests-per-hour beyond the 20 already being served by the first two, but there's only 20 (or less) showing up in the first place. (again, because you reduced attendance with price increases)
In contrast, the savings in labor is 3 employees x $7.00/hr x 12 hours, or $252. Even the savings on food that doesn't have to be purchased, the cost to operate the grill, or the ketchup packets and napkins isn't going to be $1200 a day.
That still assumes there will be 20 people per hour for the redundant employees to serve. I say the idea is to cut attendance and make sure there isn't.
Admittedly, under my system, you're cutting the profit in half for such an establishment. (revenue/2 - costs/2 = profit/2)
That's something I overlooked. I worked on the assumption that revenue would stay the same - and I suppose there's an argument to be had that it would go up. I mean the $80 gate crowd would seem more likely to be the ones spending in the park too.
But even if that's not true, you simply make up the difference at the gate.
And that's where it all becomes theoretical until someone goes for it. Who's to say what percentage of guests are lost for any given percentage increase in the gate? A doubling of the gate doesn't mean a halving of the attendance. It might be more or less. Same for any increase. Maybe a 10% increase only loses 6% of guests? Maybe it loses 12%?
The numbers are all meaningless until someone does it and observes the effects firsthand. The idea is more art than science. You just have to get a feel for it. Find that balance we always talk about.
I can't put number here to prove it either way because I'd just be guessing at the outcome. We make a lot of assumptions in our theoretical examples, but there's just too many variables in the big picture to even remotely make accurate guesses.
I say you raise the gate, cut attendance, attract a higher spending crowd, provide a better experience and cut costs by nature of the reduced attendance and you'll come out ahead.
To what degree all of those take place is anybody's guess.
Let me make it clear that my hope for improved customer service is more a dream than reality. I think the regional themers (especially SIX) are so debt-heavy that their every decision is a short-term look for cash infusion. As such, the higher per-cap seems like it would work best by reducing staffing at first. I agree that the same crappy service would be the norm...except lines should be reduced.
As profits increased over a 5-10 year period, I would hope that they would then look at increasing staffing to work on a superior experience. This is all theory...but based upon my strong hunch that big thrill rides are an extremley inelastic commodity. I don't believe that many people would stop going unless the prices raised a lot (3-6-fold). One need only look at Disney to see this.
The point is moot for me. I'm not going to any regional themer regardless of cost unless it is a family-driven decision for which I lose. I don't enjoy the experience anymore. I really would not care if Six Flags closed shop tomorrow. In fact, a part of me would feel a little better...as I would feel vindicated for past trips to customer service...to no avail. I'm flat burned out.
My interest is purly economical...I would like to see if such a pricing model works. If these parks could some day change their experience, then I would be willing to come back. We've seen how the "keep it affordable" method has worked. I would like to see on company, or just one park try the Gonch method to see how it works. Like I said before...4th of July weekend is the place to start. The demand will never be higher. Charge a $200 gate and see what happens...ok $150! :)
*** Edited 9/19/2007 7:34:52 PM UTC by Jeffrey R Smith***
Jeffrey R Smith said:
My interest is purly economical...
Mine is purely selfish. :)
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