Six Flags revenue and attendance up in 4Q

Posted Tuesday, January 8, 2008 12:31 PM | Contributed by Jeff

Total revenue for the 2007 fourth quarter increased 7% to approximately $111 million from $104 million in the prior-year period. Attendance increased 0.1 million, or 4%, to 2.8 million from 2.7 million in the prior-year period, driven by December performance.

The Company also announced an increase in 2008 season pass sales during the fourth quarter. As of December 31, 2007, advance sales of 2008 season passes increased by a significant double-digit percentage compared to the number of 2007 season passes sold as of December 31, 2006. The number of season passes sold through December historically represents less than 10% of the total number of season passes to be sold for the year.

Read the press release from Six Flags.

Tuesday, January 8, 2008 12:33 PM
While I suppose this is good news, it completely lacks context. If it's just a shift in when passes are sold, they still need to sell more passes than they did last year. Full year results, including profit/loss, will be more relevant. The last quarter is generally a loser for regional parks anyway (except those with strong October schedules), so I think this particular press release isn't that relevant.
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Tuesday, January 8, 2008 1:10 PM
I think quarterly results are meaninless for many businesses. There is a lot of fiddling that goes on between quarters that can't be hidden in year to year figures.
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Tuesday, January 8, 2008 2:00 PM
Attendance probably rose because they had two more parks open in December. Discovery Kingdom, and Fiesta Texas weren't open in December the previous year.

I believe that season passses went up just for the fact that there are more older people attractions at all these parks than last year. They also had the one day deal going on. You really have to look at the reasons why these things happpen.

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Tuesday, January 8, 2008 2:12 PM

You really have to look at the reasons why these things happpen.

Wait, are you implying any gains are irrelevant because of changes the company made?

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Tuesday, January 8, 2008 2:39 PM
^*I* wouldn't say irrelevant...."potentially-misleading", however, I might say...
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Tuesday, January 8, 2008 2:46 PM
I guess what I was trying to say is - that's the point!

You change the way you do things (more operating days, more attractions for older people, whatever) so that the various numbers go up.

It's the very definition of doing things right - changing the way a business is run to improve the business.

I'm not sure it's what Spinout meant, but it sure sounded like, "Well sure, things are better because they changed them - that doesn't count."

Struck me as odd.

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Tuesday, January 8, 2008 3:38 PM
Attendance UP?!?!
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Tuesday, January 8, 2008 4:16 PM
My point is that they have had an increase of attendance because they opened more parks later in the season, and spent more money on operations to get to that point. They are comparing attendance to last year, and duh, you are going to have a higher attendance if those parks weren't open during last year during that time. I really doubt that they would be up in attendance if those two parks weren't open. So, it's not like people are going more to the other parks, but rather people are going to other parks that weren't open during that time.

You say that it could have been a flop. Well, the thing is that people like to try new things out. You open a new park, and people want to visit at least in the first year. Those two Holiday in the Parks could be a flop, but who knows until next year. You want to know if people will actually come back.

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Tuesday, January 8, 2008 4:33 PM
Plus, with the season passes, they already have revenue they wouldn't have gotten for the next 2 quarters. In a way it's robbing Peter to pay Paul. Come July, if we hear them say that revenues are down because they didn't sell as many season passes that quarter, what did they gain?
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Tuesday, January 8, 2008 4:40 PM
LOL, the only thing we can safely assume is that we don't have enough hard data to say anything MEANINGFUL? ;)

Honestly, if *extending* the season is helping, then by all means DO IT. Just having a hard time reconciling that information with the "old news" that other operators were *shortening* their season...

"I really doubt that they would be up in attendance if those two parks weren't open."

See paragraph 1... ;)

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Tuesday, January 8, 2008 5:40 PM

My point is that they have had an increase of attendance because they opened more parks later in the season, and spent more money on operations to get to that point. They are comparing attendance to last year, and duh, you are going to have a higher attendance if those parks weren't open during last year during that time. I really doubt that they would be up in attendance if those two parks weren't open. So, it's not like people are going more to the other parks, but rather people are going to other parks that weren't open during that time.

So you were saying what I thought.

Again, that's the point! Attendance is up. It doesn't matter if more people came on the same number of days or the same number of people came on more days - either way more people came through the gates.

I'll put it in layman's terms.

Say I earn $10 an hour. I need to increase my income to make ends meet. Last week I worked 30 hours ($300) and this week I work 40 hours($400). I still make $10 an hour but this week I made more money this week than last. I'm showing a 33% increase in my income. I'm successful in moving forward towards my goal of making more money.

Your argument is that it doesn't count because I worked more hours instead of finding a way to earn $13.33 and hour and still work 30 hours.

My argument is that it doesn't matter because either way I have $400 in my pocket and my bills are closer to paid.

With that said, I do agree with the others that for passes, this could just be a shift in sales - The increased sales now could easily result in lower sales later. This info presented lacks the context (as Jeff put it) to make a real call on it either way.

But for attendance, flat out - they had 7% more people through the gate than the same period last year. I'm not sure the means invalidates the end result. There's no shift to make there. It's not like they'll see a big attendance loss elsewhere because of this increase. If anything, they potentially found a way to sustain a larger attendance base.

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Tuesday, January 8, 2008 5:58 PM
Wait, aren't you the guy who said it's OK if less people come if they're getting more from each person? If that's the case, then this is still a meaningless and incomplete picture.

The only two numbers that will really please stockholders is revenue and expenses, when the former is higher than the latter.

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Tuesday, January 8, 2008 6:04 PM
It's kind of like when Cedar Fair purchased the paramount parks.. I forget the numbers but attendance volume was up (because they had 5 more parks) but "...on a same-park basis" if I recall, those numbers as a whole were down. Meaning if you compare apples to apples, it actually got worse instead of better.

In this case with opening 2 parks in December, it may not actually have improved. What's the average per-day visits?

I don't have exact numbers, but to throw a hypothetical situation out there to try and explain my point (and what I believe to be spinout's point):

If I have a park that attracts 500,000 visitors a year with 100 operating days, that's an average of 5,000 people/day. If I extend the operating season to 200 operating days, and now post 600,000 visitors the next year, have I really improved? even though it was a 20% increase in overall visits, it's only 3,000/day. So you could argue that attendance actually DROPPED 40% from 5,000/day to 3,000/day.

To your analogy, you may have $400 more, but are you really closer to having bills be paid? with $400, you're in a higher tax bracket. Likely to work the 10 extra hours, you had to work 1 (or more) days that you hadn't previously, so there's extra cost involved in terms of gas driving to work. Even if gas is a non-issue, you'll likely need to eat once or twice more while you're at work on a lunch break. You're also putting more wear-and-tear on your work clothes than previously. In other words, the amount of added cost to work those extra 10 hours may not offset the extra $100. If you did indeed find a way to make $13.33/hour instead, it would be a lot more efficient and not incur as many costs. To merge your analogy and my hypothetical example, it would be more akin to if you were making $10/hour on a job that worked 30 hours a week ($300) but you quit that for an $8/hr job that works 50 hours/week ($400). You actually took a pay cut, but walk home with a bigger check.

But is it really improved? It depends on your absolute metric. Is guests in the park your absolute metric, or per-capita profit? (not in-park spending.. because if per-capita spending goes up but per-capita costs go up more, that also is not an improvement in my book)

As you said - we lack enough data to make a meaningful analysis whether this is actually good news, or bad news painted in pretty watercolors :)

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Tuesday, January 8, 2008 7:54 PM

Wait, aren't you the guy who said it's OK if less people come if they're getting more from each person? If that's the case, then this is still a meaningless and incomplete picture.

Agreed. But see below.


But is it really improved? It depends on your absolute metric. Is guests in the park your absolute metric, or per-capita profit?

Exactly.

So what's the metric. Well, I have to go beyond the 'think one news item at a time' mentality and look back to this piece from two weeks ago which contains the quote:


And Shapiro acknowledges that with 2008 the final year in his turnaround plan, he must have better attendance numbers regardless of whether it rains in Texas or anywhere else.

“It’s put-up-or-shut-up year for us, and we aim to deliver,” Shapiro said.


So in Shapiro's eyes - the metric is indeed higher attendance numbers.

I don't necessarily agree with that, but it seems to be a goal that Shapiro believes needs satisfied for whatever reason - and he hasn't steered me wrong yet. I do say all the time that attendance is the old measure...and I still believe it.

But all other things being equal - it's better to have higher attendance than lower. Where the info lacks context in this case is it doesn't tell us whether all other things were equal beyond the number of operating days (which weren't), but that doesn't even fit into the equation as far as I'm concerned.

My forward looking thoughts? Those additional days brought a 4% increase in attendance and in turn a 7% increase in revenue (that 7% represents $7 million). As long as their expenses weren't up an equal $7,000,000 they came out ahead.

The number of operating days has nothing to do with how successful those numbers really are when put into context. It's the cost of those days that means anything. Which is pretty much what I was trying to say way back there in the first post.

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Wednesday, January 9, 2008 2:03 AM
SFFT was not open last year, actually hadn't been open in ten years for Holiday in the Park...

it was officially announced maybe halfway through the season. Had they advertised it all season more people would have known and attendance would have been up. (from what it actually was)

additionally, next season fiesta Texas is opening goliath... located at the front entrance of the park (it is under construction, and is sure to provide a striking "You Are Here" moment as guests enter the park... and i know that was cheesy.)

so.... next year more people will know about HIP at SFFT and more people will want to go to the park because of the new coaster. two "new" coasters in two years isn't bad for a park like Fiesta Texas.

More over.... next year the park is open significantly more days, including weekends in Nov, than it was this year. all of these things should lead to increased attendance.

and lastly, Fiesta Texas is a well-kept, well-themed friendly "little" park that many people enjoy and many more have yet to experience. next year, with HiP, Goliath and the extended operating season... many people will surely be enticed to discover this gem in the SF chain.*** This post was edited by coasterghost 1/9/2008 2:18:53 AM ***

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Wednesday, January 9, 2008 2:29 PM
If SF wants to increase their revenues by being open more days, that's great. If they want to increase revenues by increasing season pass costs, wonderful-- they're so far behind in that respect. If they want to increase in-park prices but provide a several fold increase in customer service and satisfaction, that's OK too, as long as they deliver.

If SF wants to increase its revenues by figuring out new ways to bend their guests over from the time they enter the park until the time they leave, that's when I have the problem with them.

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Thursday, January 10, 2008 4:32 PM
Attendance isnt the be all or end all.
Just because they sell more season passes at a cheap rate and more people come to the park doesnt mean you solve anything at all.
I have a season pass and if I visit 3 more times next year than the year before it may mean higher attendance, but it wont mean any extra money because I bought my season pass at the same price I paid the year before because I bought it early and I rarely spend any money in the park.

If SF is going to get out of there problems they need to stop making alot of there money on cheap season passes and get more people to spend money in the park on food/trinkets etc. And with overpriced medicore food and crappy souvenirs they wont get out from the massive debt they have.

And again next year we will hear the same old BS about lousy weather and some unforseen incident caused the company not to reach its goals.

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Thursday, January 10, 2008 9:50 PM
From what I understand the chain was doing really well last year till the accident then it went down hill. if six flags improves from last year and has no accidents they could be in a huge increase in everything.
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