Six Flags reports pre-merger results of legacy companies

The merits and strategic rationale of the merger remain clear...

To whom, exactly?

Cedar Fair had an increase in attendance but decrease in per capita spending, which is concerning. Six Flags saw fewer guests, with a decrease in admissions revenue, but increase in in-park spending. It will be interesting to see how this works out in aggregate in the combined company.

Six flags business model (as we are all aware) is to give away a large portion of the gate. It will be interesting to see how the company will address this long term. I can't help but think that this is GL all over again, just multiplied.

Back in June I saw SFGAdv charging $42 per day, that's the same amount that Sea Breeze is charging. Just now sure how you can turn a profit when the gate is given away.

Considering Disney just found the top of their price hikes, and other shenanigans, Im not surprised legacy CF parks did so well.

Iger has already started to fix some things, and D23 will unleash alot.

I can't help but think that this is GL all over again, just multiplied.

As much as we bitch about Zimmerman he still served under Matt the whole time, and the moves so far have removed the silliest of SF things. And just looking at the placemaking and investment strategy so far, it’s way better then under Dick (family rides, food, general maintenance, placemaking).

Also Kinzel had a lot of personal reasons to cut GL at the knees. And I think SF gutting SW also did more harm then we think.

I think the days of random last minute rides at SF are gone, I think park ride swaps back on the table. And the top 6 SF parks will start to look like top CF parks. The rest who knows.

Mforcebob:

I can't help but think that this is GL all over again

Will a park or two get Geauga Laked in the next five years if it makes sense? Perhaps. But Geauga Lake wouldn't have gotten Geauga Laked if both companies hadn't destroyed decades of steady attendance in such a short amount of time. I don't see the merger being the reason for any of the parks to have sudden plummeting attendance like GL.

Are we really still suggesting that they bought GL to kill it? For real?

The funny thing is that the bar is already pretty low for many (but not all) of the SF parks. I don't think the current management would make them worse. But I just don't understand why they want to bank on Walmart approach of thin gate prices and make it up on spending volume. Getting them in the park for cheap means attracting cheap people. I saw someone point out the cruise line analog of this, where Carnival has cheap fares, charges for everything, but per-guest onboard spending isn't very high. Contrast to Disney, which is far more expensive, doesn't charge you for little things like soda or room service, but spending on alcohol and merch and excursions and extras is much, much higher. Which business would you want to be in?

Are we really still suggesting that they bought GL to kill it? For real?

I should of elaborated my view, he didn’t buy it to kill it, rather CF didn’t want to spend what it would really take to fix what SF ****ed up. Cause he thought he knew better. I also think the recession played a major part in how it was dismantled unceremoniously, and obv the acquisition of Paramount. That all being said he was still one of the most passive aggressive people I have seen in senior management.

What, requiring the CEO to initial room comps on paper is totally normal, right?

I feel like the recession was a worst case scenario for the Geauga Lake closure no matter which option they went with. Had the park closed a year earlier, they would have been practically guaranteed to unload all that land at the price they wanted right away. But had they given the park another year or two, they may have seen an attendance boost large enough to make it worth keeping the park open as it would have become a less expensive option to many other things during such a bad economic time.

Is Geauga Lake actually a cursed millennial, destined to have no chance at the same success its boomer relative, Cedar Point, was just handed on a silver platter?

What, requiring the CEO to initial room comps on paper is totally normal, right?

Alot of people praise him for walking the park daily and talking to guest and etc, but the amount of fear this put into sweeps, and food service was bananas, especially when the food was terrible, cause he cost cut it to nothing. Also Sphen already had to be all over the park, with rides, but then he also had to walk an hour on top of that because a department head.

Then there was the dress code which I am pretty sure I heard from a friend in HR was personally set by him, and would be now considered fairly racist.

I tend to think this will be closer to Kings Island/Carowinds all over again. Once great parks restored to at least a new version of their greatness again.

I feel like GrAdv pre merger discovered this with its anniversary. Ironically the parks who I would say suffered most from SF are the original SF parks Georgia and Over Texas, Fiesta is newish and unique enough to only be improved with rides, and a good GM.

Jeff:

Cedar Fair had an increase in attendance but decrease in per capita spending, which is concerning.

Why is this concerning? If profits are going up, does it matter whether it comes from admissions or food/merch? I'm definitely not a business guy, so the only couple of issues I see are that (1) a decrease in per capita spending means operations aren't where they should be (guests are stuck in lines and can't spend on food/merch because of it) or (2) prices aren't where they should be (stuff is just too expensive, so demand is down).

Jeff:
I saw someone point out the cruise line analog of this, where Carnival has cheap fares, charges for everything, but per-guest onboard spending isn't very high. Contrast to Disney, which is far more expensive, doesn't charge you for little things like soda or room service, but spending on alcohol and merch and excursions and extras is much, much higher. Which business would you want to be in?

I'd rather experience or run a more luxury option, but is that something Cedar Fair as a whole can actually pull off? These are regional parks, and a number of them are in declining areas (Cedar Point included). I just don't know if the clientele is there to support an experience that is closer to Disney.

Your perceptions are totally wrong. Declining areas? Declining how? The economy has been on a tear since the pandemic. Wage growth has outpaced inflation. GDP is up. Consumer spending has been up for more than a year straight.

The experience doesn't have to be Disney, but it's worth more than Chuck E. Cheese. As I said, Holiday World, half the park of Cedar Point in terms of number of attractions, sells passes for $200, and single day tickets are almost always more expensive. Its only significant market is Louisville, a far cry from Cleveland and Detroit.

TylerWS:

Why is this concerning?

Because it's the path that legacy legacy Six Flags took when it went bankrupt. They kept discounting to get people in the park, but those cheap people weren't spending. Profit cratered.

Whenever this conversation comes up I always think of Dollywood and Silver Dollar City as examples of successful parks just packed with visitors who’ve lined up to pay high, non-discounted admission so they can spend the day gobbling up high priced homey food and buying lots of expensive stuff. I admit those parks are probably considered more destination than regional but I think they’ve landed on a formula that draws from all segments, including those of us who are fans of thrill rides. Stunning scenery is free. Entertainment there is too. Stuff like that is perceived by the customer as added value and adds yet another reason to bring the entire family. My impression is their successful mantra sounds like “the more money out the more money in”, or something like that.
Maybe Six Flags has painted themselves into a corner allowing cheap admission thinking that will free up spending money. At any rate it’s something the public has come to expect. Am I wrong in thinking it’s going to take a bit of doing to reverse that?

Jeff:

Your perceptions are totally wrong. Declining areas? Declining how?

Population, for one. It's also important to note that economic growth is not evenly distributed. But to your point, I shouldn't have used "declining," as that is not correct. Economic and population growth in Ohio are not negative, but they are not keeping up with national averages. That being said, perception matters. No matter what the economy is doing, if certain consumers don't perceive it doing well, they may pull back on spending, including at amusement parks.

Jeff:
Holiday World, half the park of Cedar Point in terms of number of attractions, sells passes for $200, and single day tickets are almost always more expensive. Its only significant market is Louisville, a far cry from Cleveland and Detroit.

Holiday World also has "free" parking and drinks, and Louisville is growing in population, whereas Cleveland and Detroit are stagnant at best.

I just think the "giving away the gate" argument from enthusiasts is a bit distorted. One, because we see more value in parks than the general public, and two, the parks themselves have actual data to indicate what pricing structure to use. Can the parks make mistakes? Absolutely. But they're much better informed than we are. We armchair CEOs can pontificate all we want, but without an analysis of the numbers the parks have, it's all just perception.

Jeff:

The funny thing is that the bar is already pretty low for many (but not all) of the SF parks. I don't think the current management would make them worse. But I just don't understand why they want to bank on Walmart approach of thin gate prices and make it up on spending volume.

I don’t personally like it but it seems to be working for them for several years.

it tends to lead to lousy customer experiences. But many customers don’t care. They just want to hang out for a few hours with their family, ride some rides and eat some unhealthy food.

I don't know anything about Silver Dollar. But to me, Dollywood is in a different category than typical regional parks. Only time I visited was during week long vacation to Great Smoky Mountains/Nashville. We wouldn't have gone there if it wasn't for that trip. Great Smoky Mountain National Park is one of the most visited parks in the US. Tennessee economy (and Nashville specifically) is one of the fastest growing in the US. Tourism is booming in Nashville. There are logical tie-ins with music in Nashville and music/shows at Dollywood (people coming to Nashville for music will likely be interested in shows at Dollywood). Lots of people are coming to the area for reasons that aren't Dollywood. Easier to get them to go to the nearby amusement park. And if you are taking long weekend/full weekend trips, you are likely less price sensitive than someone who is going to their local regional park for a day trip.

Correct, which is why I admitted those parks are more destination than regional. Dollywood is but a mere stop along the miles-long drag that is Pigeon Forge/Gatlinburg. Silver Dollar City carries the same vibe but in Branson. Mo. I still think the success formula is valid and would carry at places like Cedar Point (where visitors take time away from Lake Erie Vacationland to go to the park) or Six Flags America (where visitors might take a break from DC to visit an amusement park if only it wasn’t total sketch).
Btw, people in Nashville go to Beech Bend, lol. As for your week-long grand circle tour of Tennessee, that’s nice, and Nashville is certainly exploding in more ways than one. But I don’t think I’ve ever heard anyone say they left Music City to make a side trip to Dollywood for mo’better music.

TylerWS:

Population, for one. It's also important to note that economic growth is not evenly distributed.

Neither of these things mean any of the areas are "declining." Besides, those "areas" you refer to are all over the country, as one of the benefits of the merger is increased diversification. Your perception may matter to you, but if people are objectively spending money, your perception is a non-factor. I'm not even sure why you bring population into it. Even if any one market was in any significant decline, it doesn't mean there aren't people willing to spend money.

The_Orient_of_Express:
I don’t personally like it but it seems to be working for them for several years.

You read the results, right?