Six Flags underestimated loyalty to Cedar Point
Posted
According to Six Flags CEO Kieran Burke, the acquisition of Sea World Ohio to form Six Flags Worlds of Adventure has been disappointing. Attendance there for the first two weeks of August was down 12% from the same period last year. Burke says that Cedar Point was more of a factor than they expected. An editor for Amusement Business agrees, saying their "Six Flags is better than Cedar Point" campaign backfired as a slap in the face to guests loyal to Cedar Point.
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Now if the loyalty is to CP you would think it would be up atleast 10% not 3%, CP is having a bad year also they are still 8-13% off from 2000 year and they put in a new coaster this year.
So I ask is the 3% from the new coaster or from people not going to SFWOA. If the new coaster was not there I bet CP would be in even or below attendance figures from last year. So is the coaster a failure and everyone came over from SF because of bad service.
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Army Rangers lead the way
*** This post was edited by supermandl on 8/19/2002. ***
It was a sorry day back in 1995 when the Six Flags Corporation purchased Geauga Lake. The first stupid move they made was planning that major renovation project for 2000. If they were smart, they would have left Geauga Lake the way it was (adding a small change here and there) and then bought Sea World. From there they could have spaced the new attractions out in a decent fashion. The midaways are too small! Mind Eraser, Serial Thriller, and X-Flight are junk! Tear them down.
I don't know if there's much hope left for that sorry excuse for a park. We'll see next year when they debut that new 110 foot hyper coaster.
Either this is a dying rule or you've not been paying attention to your own industry lately. I have seen NUMEROUS ads where the "competition" is mentioned. Have you been watching the "Kia", "Hyundai", McDonald's", "Burger King, "Pepsi", "Sprint PCS", and "KFC" ads lately? Unless you are saying that this many of advertising brethren are "in violation", it seems to me that your so-called "first rule" has been usurped!
jeremy
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"To get inside this head of mine, would take a monkey-wrench, and a lot of wine" Res How I Do
Here's the problem as I see it, coming from a NE Ohio perspective. Geauga Lake has always been the little amusement park, which was fine because they weren't horribly expensive compared to cedar point. Anyone wanting a "real" amusement park simply went to Sandusky. No problem. But when it costs the same amount to go to Geauga Lake as Cedar Point, no family of four (or six) is going to shell out the same money and NOT go to cedar point.
If SFWOA cost $30, you'd see a huge spike in attendance. If you put your product on price parity with a competetor, you'd damn well better deliver performance parity, or your customers are going to feel ripped off. If you're significantly cheaper than , say, CP, then people aren't expecting much.
It's like if you had two restaraunts in an area. One is a nice, classy restaraunt with excellent service. The sort of place you think "I should change into something maybe a bit nicer before we go." A meal for two costs, say, $40 plus tip. Business does well.
Across the street and down a bit is Applebees. Being an applebees, the food is usually mediocre to decent. Unless you operate a Sewage and Septic Sucking Service, no one seriously thinks about getting dressed up to go there. Service is mediocre to decent. A meal costs $20 or so. Business does well.
However, say the good people at applebees look across the street and down the road a bit, and say to themselves "hey, that thare place down the street is a restaraunt too. I bet is we steal some of there menu, we can charge $40 a meal to"
But nothing except some menu items changes. Same problem
You know, I hear a lot of people complaining about WoA's midways being too small. Well, compared to Cedar Point, I guess they are. But, compare most any other parks' midways to Cedar Point's (with the exception of the Corkscrew midway) and you would say they are all small.
The Magic Kingdom and Epcot (World Showcase) midways are pretty small, especially considering how many people go through there each day. I feel claustrophobic in the IOA midways.
I think WoA gets a bad rap on the midway issue.
SFWoA and Cedar Point have a place in the Ohio market. Having been to both parks I understand that the corporate people behind the parks come from two different worlds.
Cedar Fair started as a small company that had to cater to the customers to retain interest. In the past decades they have been a leader in the creation of landmark coaster rides, but they have never forgot that they must run a clean, customer friendly park to keep families coming back year after year.
Six Flags is the typical American corporation...all bottom line and numbers driven. To their credit, the combination of a waterpark, amusement park and the former Sea World is a bold move. If you buy a season pass from your home SF and then use it for SFWoA, there is lot of value to the park.
I can't disagree with others that the indifferent employees, traffic flow, bathroom, food problems should be addressed immediately, but this is true for most of the SF parks I have been to.
Cedar Point is special. (otherwise I wouldn't have made so many trips there from over 800 miles away) SFWoA has a nice collection of rides and other family attractions that make it a different, albeit less attractive destination.
Together these two parks make the northeast part of Ohio the destination for coaster lovers. What more needs to be said?
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What have you gotten me into?
I was at both CP and SFWOA the week of 8/5
CP advertised hours 10-11, actual hours 9:30- 11ish, no ride lines closed early, in fact I got in line for MF at 10:30 with an hour and half wait time listed.
SFWOA advertised hours 10-10, actual hours 10-9, with X-Flight (opening around 10:15) having its line closed at 8:15. I was told the rides close at 9 pm and the "rest of the park" - meaning rides you have to pay for and gift shops are open until 10. The brochure and web-site never mention this. I was told X-Flight closed early to "let the line down" Hmmm.
CP rides closed that day = 1 - the Sky Ride. MF did break down for about 45 minutes mid-day.
SFWOA rides closed = 9 too many to mention. 5 rides were listed outside upon entering the park, but an additional 4 rides (not listed) were also closed once inside. This is in addition to Superman breaking around 1 and never reopening and Batman being closed for over 2 hours mid-day as well.
Also, there were soooo many shops, food and concession stands closed it was amazing. The dolphin petting/feeding pool is neither. SFWOA put up a fence to keep people back about 4 feet to prevent both feeding and petting - amazing.
CP with the exception of the Mind Ride was running all trains on all coasters.
SFWOA was only running two trains on X-Flight and Batman. The Villain only had one running despite a 20-25 minte wait and with no maintenance person visible if the other train was broken.
CP fast pass = $0
SFWOA fast pass = $20 (for starters)
I won't even go into how rude SFWOA was to me and to people I witnessed, but let me say that when I was not charged $10 for burger/soda combo at one of their "restaurants" I told the employee, actually asking her to take more of my money because I was under-charged and she said, "I don't care I am already late for my break"
Interesting attitude.
I am saying exactly that. One person starts it, and everyone jumps on the bandwagon, but it doesn't make it anymore correct. Negative publicity, is still PUBLICITY. Plus, when coming up with a commercial concept, you should pick out one point to make, and stick with it. Throwing too much information at people in :30, or even :60, just isn't good. To prove my point, tell me what any of the commercials you mentioned are actually telling you. The fact that you know those commercials you pointed out bash the competition, proves that had a big impact on your mind. Read the posts in this thread, apparently the part about CP ticked off a lot of the members. Even Six Flags has admitted it was a problem. Just because a high priced agency creates a spot, that doesn't make it the right thing to do. There a lot of cute and clever commercials run during the Superbowl, but very few tell what the product is about. Agencys like to win awards, and it seems that those cute and clever commercials are what's winning them. The fact that their client is spending millions of dollars to say nothing about their product is of no concern to them.
But this is a coaster related board. If you want to continue this discussion on commercials, feel free to email me at "][url="mailto:Goccvp1@yahoo.com" target="_blank">Goccvp1@yahoo.com or at "][url="mailto:donpatrick@clearchannel.com" target="_blank">donpatrick@clearchannel.com
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Goccvp1
*** This post was edited by Goccvp1 on 8/19/2002. ***
"Funny how only a 3% increase in attendance from last year CP(that includes the extra week it was open this year) is considered doing well. Last year was a bad one for CP down 10-15% from 2000."
Wrong... CP had a 9% decline to 3.1 million for 2001, which is still "average" for them if you look at the last decade. 2000 saw 3.4 million, which was probably only that high because of Millennium Force's debut.
"Six Flags is the typical American corporation...all bottom line and numbers driven."
Dude... I don't know who you work for but that's every company. The difference here is understanding what it takes to achieve those numbers. Customer service is and always has been a component of that. Once company gets it, the other doesn't.
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Jeff - Webmaster/Admin - CoasterBuzz.com, Sillynonsense.com
"Let's stop saying 'don't quote me,' because if no one quotes you, you probably haven't said a thing worth saying." - Dogma, KMFDM
Let's face it. SF and CF are using different corporate strategies. Who will be successful in the long run? Probably both.
CF - CP is an awesome park. It's clearly CF's crown jewel. No offense intended to all those who are fans of WoF, VF, DP, and MA (I have visited all of these parks in the last year, and enjoyed them all), but let's face it. These parks just do not measure up to the SF flagship parks (SFGAm, SFMM, SFGAdv, SFoT) in terms of the number of coasters available. You can say that quality is more important than quantity, but I say both are important. CF has taken a strategy of doing what they do right on a limited scale, without massive capital expenditures on the scale of SF. That is how you manage to allow your stockholders to enjoy a dividend year after year. However, you grow much more slowly.
SF - OK, they tend to have poor service. However, their flagship parks take a back seat to no one (maybe Disney and CF, but that's arguable). When I was a SFWoA in June, Double Loop and Mind Eraser were down. It was still an incredible park. Was it CP? No, but that didn't mean it wasn't excellent. We had a great day and didn't run out of things to do (although the many breakdowns and a long power outage WERE annoying), and we didn't visit the water park. SF wants to give everyone a chance to have a nearby park with quality attractions. When they nail the customer service, I'd say: look out CF. SF is following the modern trend of reinvesting profits in their business through additions and expansion.
All in all, I'd say both chains need some work in trying to diffuse their best practices throughout their chains. The unnecessary differences in quality in all aspects between parks are startling.
Did SF make a mistake trying to compare WoA with CP? I think they did, but it's not an unfair comparison in my opinion. I didn't see the TV spots. If they were trying to say they were BETTER than CP, that seems laughable. But if they were trying to say they were another good place, and maybe closer to some people than CP, then that makes sense to me. Isn't that the longtime SF tagline: "So big, and so close to home"?
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Revised projection for 2002: 37 parks & 140 coasters. 27 & 105 through 8/11
I have to agree with all the SF bashing. I've been to SFGA, SFOT, SFOG, SFFT, SFSL, SFWOA & SFAW and the only one I really enjoyed was SFSL. All the rest had one train operations (two if there where three trains) and its just to help sell more of the Fast Lane passes. Most of the employees seemed as thought they did not want to be there and had not intrest in me or my family.
On the other hand Cedar Point and Kings Island we're just the oppissit. The Ride Opps appeared to want to move the line as fast and safely as posible and we're very friendly and courtious.
I know where I will spend my money next year.
AND IT WON"T BE SIX FLAGS!
One last issue. Six Flags has been running television ads in this market that take on Cedar Point directly; the one I have seen features someone saying, "We actually drove by Cedar Point to come here." Well, if the park is inviting comparisons to Cedar Point, it's working. Many times during the day I heard people making comparisons to Cedar Point. The most common comment was that the park isn't Cedar Point, can't be Cedar Point, etcetera. In my opinion, the comparison is unfortunate because the park ISN'T Cedar Point, but it doesn't have to be, and shouldn't be. Six Flags is an entirely different park, and it is a very nice park. Oh, it has its problems, certainly, like the long empty path between Raging Wolf Bobs and Shouka's Happy Harbor; the nasty bottleneck in Gotham City; and the total lack of useful in-park transportation. The fact is, it is a darned nice park, it's a great place to spend a day, and they seem to be doing a better job with basic operations this season. Six Flags doesn't have to be Cedar Point. Instead, it needs to be Six Flags at Geauga Lake, and it needs to get that down perfect. They don't need to be Cedar Point, they need to try harder. If they concentrate on being Six Flags, and if they do that well, they can't lose, no matter what their neighbor to the West does.
--Dave Althoff, Jr.
(fixed a tag that got messed up)
*** This post was edited by RideMan on 8/19/2002. ***
ACBLuke, let's continue with your discussion of SF reinvesting. Now, I may be off with my numbers, but I know there are people on this page who will correct me.
As a stock holder in both companies, I prefer the"slow building" approach of Cedar Fair. I get a cash payout of over $1.65 per share, each quarter. My stock prices have risen in the last week to just under $24 per share. The investment has been wonderful. I bought these shares in 1987 at $10 a piece, plus in 1997, we had a twwo-for-one split.
My Six Flags stock has nosedived. A 67% drop in one week alone to $4.09 a share. Dividends are non-existent. The company is also deeply in debt from the Premier sale of Six Flags. If I'm not mistaken, it's still over a billion dollars.
Yet Six Flags continues to spend money (from where, I just don't know). $350 million in 2000 for new rides, $180 million in 2001. Divide that among 35 parks, that's $5 milion per park in 2001. Cedar Fair spends about $50-60 million a year for its six parks (I'll include MA for arguments sake). That's a average of $10 million per park.
Now, I know the math is a little fuzzy, seeing as which CP and Knott's obviously get more money. However, Cedar Fair has been able to put a higher average reinvestment into its parks than Six Flags, yet does not have a debt that Six Flags has to deal with.
When push comes to shove, I make more money with the "slow building" process, and the results in the parks show.
Actually, you get 1/4 of $1.65 per quarter, per unit. That's still $1.65 more per unit than you get from PKS of course.
Furthermore, Premier didn't sell Six Flags, they just changed the name.
Debt is not itself a bad thing. If you have the cashflow to service that debt, you're still in good shape. That's why Amazon.com is still around while the majority of their big competitors are history. You can keep borrowing as long as you can keep paying back.
That's what has the analysts a little worried in this case. They missed revenue targets, and that can disrupt cash flow. Six Flags has been pushing the boundries in that sense, borrowing as much as they can within the limits of what they can pay back based on their revenue projections. Miss those projections and of course it's time to freak out.
I don't know what the loans were used for, but I'm guessing most, of not all, was used for acquisitions and capital expenditures. Banks like to loan money for that purpose because there's something tangible that they can sell if they default on the loans. It's the reason that us consumers can borrow $200,000 for a house, because if we don't pay, they can take the house back, sell it and get their money back.
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Jeff - Webmaster/Admin - CoasterBuzz.com, Sillynonsense.com
"Let's stop saying 'don't quote me,' because if no one quotes you, you probably haven't said a thing worth saying." - Dogma, KMFDM
Six Flags updated their website a long time ago, S-Thursday are advertised as 10-9.http://www.sixflags.com/parks/worldsofadventure/home.asp
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Six Flags Worlds of Adventure Online
Park1Arm, no disagreement here. I'm not enough of an expert on the amusement park industry to judge appropriate levels of debt. It seems pretty clear that industry analysts are scared of PKS right now because of that issue and their lack of ability to grow the revenue and make consistent profits. That's scary when you have a company whose net tangible assets per share is only about $1.50. SF attendance just has not been enough to pay the interest charges, and that has people nervous.
I wasn't really commenting on the financial performance of PKS vs. FUN. My point was: the two companies have radically different strategies. PKS's strategy is a lot riskier, in my opinion, than FUN's. However, if PKS can get the attendance ball rolling back in their direction, they are placed to generate a whole lot of profitability. PKS had 1.05B in revenue in 2001, vs. FUN's 477M - over twice as much. That provides a comparison of the relative scale of operations of the two companies.
My optimism isn't likely to pacify anyone who has dropped a lot of money on PKS stock. This appears to be a tough business, and FUN has shown that maybe the prudent thing is to go slow. That doesn't make PKS's strategy wrong, although they certainly seem to have timed things badly.
I think I will buy some PKS. It was up 16% today.
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Revised projection for 2002: 37 parks & 140 coasters. 27 & 105 through 8/11
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