Theme parks cost cutting = lower quality experience
The fact we have not seen this type of pricing structure tells me…as I’ve been arguing all along…that increased profit is NOT the only (primary?) concern. Any dork with an average IQ knows they could increase profit by charging more on weekends. Somewhere along the line park management has decided other factors such as “not pissing off the customer” trumps short-term (?) profit potential.
I realize that a lot of data is involved in the decision process…but in the end it comes down to managerial decision. In the hotel example…some managers believe in higher occupancies and others believe in Gonch. As much as we like to make it black and white…it is just not that simple. There are too many variables to isolate…even with hard data. There is just no way of objectively knowing a customer’s breaking point OR when short-term profit increases are actually hurting long-term profit-potential.
I personally believe that the amusement park industry in general (and especially Orlando/Disney parks) is woefully UNDERPRICED (maybe 200% or more)…but that is just my opinion. It seems that some on this site hold these park decision-makers up as Gods (Shapiro?)…unworthy of criticism. I just see them as people making their best educated guess…and understand that there is indeed a science part of the decision AND an art part of the decision.
This relates to the reduced hours in the sense that nobody can say if this is a good or bad decision. It is a managerial decision that sucks for the base customer who is now getting less. I understand those arguing this side. It MAY be good for the company though...and I have always loved/supported the business/profit side of these debates. I’m just unwilling to blindly support this decision as correct. I've no way of knowing. I feel that a lot of you supporting the business side of this friendly debate are blind supporters. I’ll let the decision play out over a 4-5 year time period and see where hours are at that time…and what FUN’s stock performance is at that time. After all…this is the way to judge the genius of their decisions.
*** Edited 4/28/2007 3:49:30 PM UTC by Jeffrey R Smith***
Jeffrey R Smith said:
Back to the hotel analogy…do they charge the same rate every night? Or do they change the rate to flow with supply/demand?
Indeed they do. My example was at the simplest level. Hell, even on the same night you might have people paying $169 and others paying $99.
I personally believe that the amusement park industry in general (and especially Orlando/Disney parks) is woefully UNDERPRICED (maybe 200% or more)…but that is just my opinion.
I couldn't agree more.
It seems that some on this site hold these park decision-makers up as Gods (Shapiro?)…unworthy of criticism.
Not unworthy of criticism, just making the right choices. I still laugh at how much we used to bash SF on the early podcasts. It was a weekly thing. Then Shapiro moved in and it was less...and then less...and still less. I really think the guy is doing all the right things at this point.
I just see them as people making their best educated guess…and understand that there is indeed a science part of the decision AND an art part of the decision.
Again, I think you nailed it. The 'art' side of it is that same 'balance' that we often talk about.
I’ll let the decision play out over a 4-5 year time period and see where hours are at that time…and what FUN’s stock performance is at that time. After all…this is the way to judge the genius of their decisions.
I still don't necessarily agree with that. Stock performance just measures the stockbuying public's confidence. Yes, in theory it should move with good and bad decisions. We saw what happened to SIX. Last February the stock jumped - it pretty much tripled. By June it was back down to the $6 range. Does that mean SF was doing something exceptionally right in February, but wrong again by June? Not really, nothing changed in that period.
I'll measure the success of this by the old revenue, per cap and attendance levels. If they cut 2 hours from their operating day and attendance remains relatively steady, revenue holds and per caps stay the same - then flat out people don't care about the two less hours and they weren't crucial to the parks numbers.
Lord Gonchar said:Again, I think you nailed it. The 'art' side of it is that same 'balance' that we often talk about.
Hard to create fine art with distinct lines when you're only equipped with the right brush to paint houses. But it is *amazing* fun to try... :)
I saw that little qirp about "people on these forums" (raises hand) visiting SF even though they complain a lot about them. I am a coaster enthusiast, remember? I could easily go to SF once a year if they treated me right, but they don't so I only go every 5 years or so. You would think that it would be more profitable for them if I let them serve me once or more per year...
I go to other parks. I don't think that most non-coaster-enthusiast-types think about driving a few extra hours to go to a higher quality park than SF. I just doesn't become an option for some, depending on where they live of course.
Flashpass ruining your park trip? You'll probably go anyways, because it's like you said, their is not much of a choice. Same with crappy, expensive food, ridiculous pricing and perpetually closed rides. People will go anyways, because their is not much of a choice when it comes to visiting an amusement park.
(That's why I wish there was a theme park located virtuially across the street from SFGAdv.) :)
You are smart Gonch...Too smart (lol). Your showing facts (or at least you are showing what you believe to be fact), and I'm showing opinions. Are we saying that SF can't be profitable if they charge what my opinion would be a reasonable amount? Charging more and giving less is the only solution? What a sad state SF, and the amusement industry as a whole, is in if that's the case.
Sharpio keeps saying that their are problems and he is working on fixing them. I don't think charging more and giving less is a good solution to fixing those problems. Amusement parks are a very profitable business, right? Throwing money at problems is what got SF in trouble in the first place.
But I don't have the advantage of knowing everything like you, Gonch, so my opinion is probably wrong.
Jeffrey R Smith said:
I’ve never understood why the admission price was not doubled (tripled, more?) for weekends. For all the talk of data-driven decisions...it is impossible to believe that the data would not indicate that weekends are a bit more crowded.
Funny you should mention that... Kennywood used to charge more on weekends back in the 90's. They advertised it as the "weekday workday getaway." It was something like 4 or 5 bucks less to go on a weekday. Not sure why they changed that... probably a logical business decision. ;)
Back to the earlier close thing... I've found that my greater value is on days when the park closes earlier. I can get more rides, have more fun on a day when the park is open 10am-7pm with 15,000 in attendance than I can when they're open 10am-10pm with 35,000 people in line ahead of me. It's a more relaxing day with more "accomplished" at the end of the day when there are fewer people there.
I've gone to Cedar Point when they close super-late and waited over an hour for the friggin' Corkscrew. I've also gone when they close while it's still light out and had a 10 minute wait for Raptor. Guess when I'm going next?
Back to the Kennywood model, I really don't understand why more places don't follow it.
I was at Dorney after a rainstorm one night. Poured around 3pm, everyone left. We went back to the Gonchar-approved hotel across the street, changed, went out to eat, played mini-golf, came back around 6. DEAD. Literally a walk on for every ride, trains in the stations waiting for riders. Rode Thunderhawk a few times in a row as the only two riders. They had to stay open, though. Advertised until 10. Conversely, I've experienced the opposite where the park's closing and there are still pretty significant lines for money makers such as games and food.
The fluctuating as per attendance model would seem to alleviate any of the discussion on the last 7 pages. Give people an approximate time, then close when people leave. Is it really that hard?
I wish my post was as long as Gonch's. :(
*** Edited 4/30/2007 2:04:53 AM UTC by kpjb***
Hi
I'm guessing different chains and different parks have different standards.
2022 Trips: WDW, Sea World San Diego & Orlando, CP, KI, BGW, Bay Beach, Canobie Lake, Universal Orlando
Jeff - Editor - CoasterBuzz.com - My Blog
Actually, that all makes perfect sense and I'm really glad to explained it in such detail. I found that all incredibly interesting (and I say that without a hint of sarcasm). Being outlined that way, I can see how it is sometimes beneficial to make more money from less people. Of course, that means the ultimate goal of any hotel would be to sell rooms at $169/night AND fill the entire place as if the rooms were being sold for $100/night, right? Now, too bad no one has such concrete, easy-to-explain proof of how amusement parks sometimes lose money in the later hours in the middle of the summer, because then I could just shut my mouth and be done with this topic!
But I'm not done with this topic, because in the way that you explained your point so well, you've led me back to another point I've been trying to make all along... one that Brian seems to agree with, at least in theory.
Brian Noble said:
However, for most families, an amusement park is just one of the many passtimes they might choose for recreation...Amusement parks compete with more than just other amusement parks for my family's discretionary money and time. Much more.
Okay, I'll agree that there are instances when the Jaime and Gonch business model works, like when it comes to hotels trying to gain some stability in the market. But maybe it doesn't really work with theme parks. Whoever said that people need a place to sleep is right... when traveling, a hotel isn't really a luxury item because you eventually end up needing one. And I'll agree that even though some people might be turned off by the $169/night rate, they might also come back because they couldn't find anything else, or simply didn't feel like investing more time into searching for something else. But an amusement park? A person doesn't have to go to an amusement park. After all, there are plenty of other things for people to do. Which ties in with this:
Jeffrey R Smith said:
Any dork with an average IQ knows they could increase profit by charging more on weekends. Somewhere along the line park management has decided other factors such as “not pissing off the customer” trumps short-term (?) profit potential... There are too many variables to isolate…even with hard data. There is just no way of objectively knowing a customer’s breaking point OR when short-term profit increases are actually hurting long-term profit-potential.
And that's the point I've bene trying to make all along. I'm not saying that it is definite that parks are going to suffer as they make these kinds of changes, all I'm saying is that the possibility of some fallout exists. The more I think about it, the more I back off on my comparisons of amusement parks to retail.
It's hard for me to put into words, so I'll give an example:
Gonch's Grocer used to be open until midnight but saw a decline in late-hour customers so he decided to close the doors at 10pm every night. Jaime's Shoppe, operating right down the street, made the decision a while back to stay open until midnight to keep Gonch's Grocer from having a clear advantage. She didn't want Gonch to have a monopoly on those later hours, even if they weren't very lucrative. But now that Gonch's Grocer has started closing earlier, Jaime's Shoppe can go back to closing at 10pm as well. People will surely complain, but with both stores closing earlier than they used to, it's not like either one has a clear advantage, so in reality, nothing really changed. After all, people still need to shop for food and they're going to do so at Gonch's Grocer or Jaime's Shoppe.
But an amusement park? There likely isn't another nearby amusement park to balance things out. That means the amusement park starts to look a little greedy and people might start to take their business elsewhere since there are so many other entertainment options out there. And keep in mind that I'm looking at this from the perspective of a regular customer, not an enthusiast that needs a frequent amusement park fix. The regular customer doesn't need that fix, so a movie or a round of golf is a viable alternative.
In other words, why give the customer a reason to go elsewhere? Maybe the park doesn't make a ton of money in those later hours, but if people continue to visit the park in those later hours and the park continues to generate a profit each and every day (which seems to be the case, going by what everyone has said thus far), why take the risk of pissing people off? Why give people a reason to go do something else?
I personally believe that the amusement park industry in general (and especially Orlando/Disney parks) is woefully UNDERPRICED (maybe 200% or more)…but that is just my opinion. It seems that some on this site hold these park decision-makers up as Gods (Shapiro?)…unworthy of criticism. I just see them as people making their best educated guess…and understand that there is indeed a science part of the decision AND an art part of the decision.
I'll agree with that. Amusement parks seem to be underpriced when it comes to what they offer (an entire day with rides on $25 million machines for around $50 does seem a little cheap), but just because they're worth a lot more, doesn't mean people are just going to accept that. You can't just go ahead and tell people that they're getting way too much for their money and have them willingly accept huge price increases and/or service cutbacks. People are creatures of habit and they are used to the way things have always been. Now, that's not to say that people can't change their mentality over time, but look at what's happening with theme parks:
1. Prices are going up, usually on a yearly basis. And we're talking prices for everything, not just admission. And while some can be attributed to inflation, not $5 increases in parking fees.
2. Parks are setting records for removing more rides than they add (SFMM, Geauga Lake, etc.).
3. Perks like Qbots and VIP passes are being offered as ways to charge people even more money for things that have always been free. I can see if the park is going to ride you around in a horse-drawn carriage, but what you're basically getting is nothing more than the ability to jump ahead of others in line.
4. Hours that were once the norm are now being cut, giving people less time to spend in the parks. It goes back to charging more and giving less.
This is the "art" part of the decision, not the "science" part. Maybe data suggests this and that, and I'm sure a lot of it can't be disputed. But all these changes at once are sure to be overwhelming to some customers, and if the goal is to keep interest in amusement parks instead of allowing people to be entertained by other things, why not give people more reasons to be interested in theme parks instead of less?
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