Six Flags revenue down 1%, attendance down 12%, per cap spending up 13%

Posted Friday, November 3, 2006 9:27 AM | Contributed by Jeff

Six Flags announced their third quarter results with revenue down 1%, attendance down 12%, and per capita spending up 13%. "During this transition year we have been focused on rebuilding the trust of our family guests," said Mark Shapiro, President and Chief Executive Officer of Six Flags since December 2005.

Read the press release from Six Flags.

Friday, November 3, 2006 10:20 AM
edited for accuracy (and entertainment) purposes: "During the first six months ofthis transition year we have been focused on rebuilding the trust of our family guests"...

"...and during the last 4 months, we've been reassuring them that those changes were temporary in nature"..... :)

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Friday, November 3, 2006 10:41 AM
Yeah, I don't think the changes have been particularly sincere, but at the core of this release, this is good news. To have a revenue drop of only 1% and crazy per cap gains, that's not bad. If they can maintain the same margins and per cap, and bring the attendance back up next year, they're on the right track.
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Friday, November 3, 2006 10:58 AM
I think their efforts while good intentioned were quite a bit off from what they could offer "in reality". I noticed a concerted effort to make sure things ran smoothly and safely during Fright Fest. I was surprised that they had stopped re-admissions after 6pm (when most trouble happens) and I also saw a almost zero tolerance to in appropriate behavior.

I'd say once again their biggest hill to climb will be to rebuild that consumer confidence, and run things right.

The parks seemed to hit a wall around early july and didn't recover til Fright Fest.

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Friday, November 3, 2006 11:06 AM

If they can maintain the same margins and per cap, and bring the attendance back up next year, they're on the right track.


I'd say once again their biggest hill to climb will be to rebuild that consumer confidence, and run things right.

Yes and yes. :)

I keep going back to it, but I have to cite GL here. CF still isn't really sure how to undo the damage and get people back. SF continually burned bridges for many years and repairing them is not an overnight job.

SF still has their work cut out for them and falling back into what seems like the 'same old same old' late in the season didn't help things one bit.

In the end, I don't think for a second it was their pricing that kept people away. These attendance drops were done long before Red Zone moved in.

*** This post was edited by Lord Gonchar 11/3/2006 11:21:39 AM ***

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Friday, November 3, 2006 11:15 AM
Well I do have to say:

SFoG has really stepped it up this year in overall atmosphere , park cleanliness, and employee friendliness. I have never seen so much positive reactions from guests towards the park in a single visit then the day I went during Fright Fest. I understand that not all parks in the chain have performed up to their word, but to give SF some merit, a few of the parks are indeed working.

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Friday, November 3, 2006 12:00 PM
Lord Gonch, I agree with most of your statement but drops in attendance due to customer satisfaction like that won't happen over night that quickly.

This could be a slippery slope for six flags. Now people are paying higher prices for the same crappy experience, chances are they won't come back. Not ment as a six flags bashing post by any means, but I wont' ever return to a SF park not until I at least hear a lot more positive things about them on the customer service side.

I'll never forget the ole sfkk experience I had.

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Friday, November 3, 2006 12:36 PM
I not sure where you got that from my post. I agree with what you're saying 110%. They have a LONG way to go to win back the customers that Burke & friends lost.

But the thing that strikes me most about your post is this:

"...I wont' ever return to a SF park not until I at least hear a lot more positive things about them on the customer service side"

I'd say that represent the majority of their 'lost' customers. It has nothing to do with price and everything to do with how things are running.

Which is exactly why I love Jeff's post so much. He's spot on. They have one thing in place - the pricing of each park. Now just bust some ass to get those guests back and things could be peachy keen. (unless of course the financial situation is such that getting operations up to par is not feasible, in which case they're screwed)

The big problem is the clock. How much time do they have before the bottom falls out and is it enough time to repair the damage of the past 5-to-7 years of repeatedly turning off guests to the product? I fear it may not be enough. (which is not the fault of Red Zone in any sense - I still think they're making all the right moves for the most part)

*** This post was edited by Lord Gonchar 11/3/2006 12:42:07 PM ***

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Friday, November 3, 2006 1:01 PM
Not sure if the attendance drops were all customer satisfaction related...well...not entirely. Let me explain. A lot of my friends and coworkers talk to me about SFGAm when they visit. Almost every one of them said, "place is too expensive to take a family, not going to visit next year."

These aren't poor people, either. The salaries of my coworkers are up there. The thing is, these same people will take a vacation to Disney and pay A LOT more money than they would ever pay to go to SFGAm. They all say that they cannot wait to go back.

The difference here is in what people are getting for the money that they pay. It is perceived value. Sixty bucks plus to get into a Disney park is a heck of a value because they have well themed attractions, a staff that busts their butts to make as many magical days as possible, the place is cleaner, and there are great things to eat. They go to Great America and pay fifty bucks and they get some really thrilling rides, but no theming, bored employees who rarely show any customer service skills, a less than clean park, closed attractions, and the local houligans from the entire Chicagoland area. Mind you, this is at a Six Flags that many on this very board have cited as being among the best run Six Flags parks.

So, in order to increase attendance, they are going to have to either lower their price to a point where people think that they are getting a good value for their dollar, or you are going to have to adjust the experience that guests get to justify the hard earned dollars they are spending.

The fall off of service at the end of the year really did a lot to damage that justification. Many people I know visited during that time and have sworn never to return until the prices come down. Heck, I'm one of them. I did not go at all this year to Great America. Not one time. I only went to one Six Flags park this year and that was because it might be closing.

Six Flags also is in a bit of a catch-22, it seems. If they price down, they will get many more houligans in the park and the park will become a baby-sitting service. If they raise the prices, most families won't be able to go and they will have to REALLY improve things to justify that raise. I think it would be logical to lower the prices a bit, add in more security, and set some strong policies on minors in the parks.

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Friday, November 3, 2006 1:07 PM
I'd say that's a 100% accurate post too, KTS. It breaks down the situation quite nicely.

But I still see it as not a price problem. It's still an operations thing for the most part. Because if they did fix all of those things, I bet people would pay the price to visit.

Just like you said - value. Hell, the way some of the SF parks are run, it's hard to justify paying 1/3rd of the gate price. Up the quality of the visit and the current prices suddenly son't seem so bad.

I think we're saying the same thing, just with differing viewpoints. :)

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Friday, November 3, 2006 1:30 PM
Gonch & Psychomonkey have the right idea here.

Take SFA as an example:Things started off promising enough but by the middle to end of the season they had problems with rides being down & not enough money being available in the budget to fix them coupled with late openings of some rides toward the end of the season<on my last visit supes didn't open til well after 4 pm> & here they are charging even more for admission & parking,as well as food but failing to deliver an experience worthy of the higher cost.

Part of what hurt them IMO was the $25.00 premium parking option....it's bad enough that the price jumped to $15.00 for regular parking,but to charge even more just to save the guest a bit of walking from their car to the gate is really sticking it to them before they even get into the park.

Naturally per cap spending is gonna increase when they raise prices for food/merchandise....after all the guest once inside the gate becomes a captive audience & has little choice but to fork over the cash at a higher rate,or simply go without food & drinks the entire day.

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Friday, November 3, 2006 2:29 PM
GONCH! ya gotta give up on blaming SF for everything wrong at GL. Look at what Kinzel said himself, they failed to recognize the draw the animal park had.

Cedar Fair has had plenty of time to fix whats wrong, but the park still suffers.

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Friday, November 3, 2006 2:31 PM
The big news is that SF's profits fell %16 in the 3rd quarter. Its not easy paying off 2.1 billion of debtr when your profits decrease.
And typical SF, they partly blame it on weather which is no different than what the prior management did.
http://www.latimes.com/business/la-fi-sixflags3nov03,1,6189213.story?coll=la-headlines-business&ctrack=1&cset=true
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Friday, November 3, 2006 2:52 PM

Cedar Fair has had plenty of time to fix whats wrong, but the park still suffers.

Agreed. But that's just my point - maybe it's unfixable. As it stands it's the best example of someone trying to fix SF's botched parks.

They've had a few season to go at it.

Now we see Red Zone having the same lack of success with the rest of the chain. (although admittedly, it's been less than a year...still WAY too soon to claim failure)

But the point is we have nothing to base it all on other than those examples and right now I see CF having a hard time of it (and the animal thing is only a partial excuse because before SF those were two seperate gates that drew) after a couple of season of trying and SF doesn't seem as if it'll be looking up anytime soon.

There's definitely cause for concern as to the viability of repairing the damages on all levels based on what little there is to look at.

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Friday, November 3, 2006 3:49 PM
If you listen to The audio then they are on the right track.

first off kodak will be offering some video of your ride on dvd (meaning onride video)

They also stated they were working on getting better staffing and more incentives to that staff.

You will be able to reserve rides with qbot without actually having to go to that ride


They also stated every capital investment will open with the park.

Shops will have merchandise pick up

Also more things like vip tickets,flashpasses and meal vouchers sold online.

IF they really do all this stuff and keep it through out the season then they are on the right track.

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Friday, November 3, 2006 4:26 PM

KTS said:

A lot of my friends and coworkers talk to me about SFGAm when they visit. Almost every one of them said, "place is too expensive to take a family, not going to visit next year."


I never really thought of it that way, but the price raises this year may not have affected the attendance this year as much as they will next year.

Most people are probably one-timers each year. Most people also probably do not research how much parking and Icee's cost before going to a park.

It's entirely possible that the price hikes took 90% of their customer base by surprise. Once you're there, you're not leaving, but you may not come back next year. If the bad service didn't keep you away, maybe overpriced bad service will be the straw that breaks the camel's back.

Then again, maybe not. :)

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Friday, November 3, 2006 4:57 PM
KPJB, I said it when the institued it.

Make em feel ripped off or not worth it, They won't be back.

74 dollar addmissions is a rip off for most SF parks PERIOD. Yeah, I added the 15 dollar parking price as part of the cost.

Chuck

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Friday, November 3, 2006 7:07 PM
I think we should not forget that this year brought three spectacular (some more, some less) coasters to some parks. Rides, that could drive attendance up by 10% for the season of that particular park.

Now we see an overall decrease of 12% in attendance. It would be interesting to know the distribution of attendance. Did SFMM, SFOG and SFLR profit from their new rides and the other parks dropped so much? Or was the downward spiral spread evenly?

What will happen next season when the only new rides will be in other parks?

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Saturday, November 4, 2006 9:24 AM
/\ Overall, yes. I'm not familiar enough with SFMM to know how Tatsu helped out as well as Goliath at SFOG but I can assure you with great confidence that SFGadv had a stellar year in terms of attendance.

I have a feeling that many of the consistant performers slumped this season due to most of the reasons listed above. Had the three parks with new coasters all pulled in what they "should" have pulled, I wouldn't think we'd be looking at such a decline as this could have offset the other under-performing parks.

IMO, 2007 will really show what this new management team can do (or not do). Only time will tell. At least the stock is finally back over 6. woohoo lol

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Saturday, November 4, 2006 4:48 PM
SFMM was packed btw. Tatsu did "work", in fact, compensated for what they didn't have running, such as X. Now if they ever put together a year where X and Tatsu were run efficiently every single day of the season, watch out!

Seriously though, SFMM set records in guest spending - 2nd only to SFGADV (at least that was true in the 2nd quarter results). I think SFMM is more price resistant than some of the other parks, there are so many people to draw from.

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