Whose Pricing will Prevail -- Six Flags or Cedar Fair?

Rablat - What you're stating is a matter of opinion. Pricing/Value is subjective. I think they've generally been in line with their pricing. It's in the park that things go south. Plus, I do believe in hindsight that the advertised gate prices were a neat little ploy to advertise the expected gate as a 'discount' and snag people on that perceived value thing.

Your example of SFA is a good one. All it takes is an online ticket purchase to get in for that same $39.99. The price really didn't rise, they said it rose and then offered a 'discount' (in the most visible of places, mind you).

I do think SF should be leading the price brigade right along with the Cedar Fairs, Buschs and Paramounts...err Cedar Fairs of the world. These parks represent the biggest parks with the newest rides and the most to offer outside of Orlando.

Gator - Indeed. :)

*** Edited 9/7/2006 7:21:28 PM UTC by Lord Gonchar***

Yes, it is subjective. And you said it yourself--once you're in the gate, things go south. So therefore, they don't justify their gate prices because of their in-park issues.

Therefore, the gate price is "too high" IMO.

In the UK we're currently paying these gate prices:

Alton Towers: £29.50 ($54.35)
Blackpool Pleasure Beach: £29 ($56.36)
Thorpe Park: £28.50 ($53.42)

Obviously there are various offers available - but that's the gate price. How does that sound in comparison to some of the complaints here?

Alton Towers is comparable to BGE in gate price. BPB seems a bit high, OTOH.

I guess it's one of those crummy things about living in Europe, along with high gas prices.

I love how everyone considers Europes gas prices a high?

Not only does their gas taxes fund highways, They fund rail systems and the Autobahn among other things making the point moot.

Except on the East Coast, You can't exactly catch a train in Cincinnati and get off in Boise.

Yeah, We got Amtrak which is barely more than a joke except the NE corridor.

OK, Back on topic.
Chuck

Chuck, what does that have to do with anything? Europe DOES have high gas prices in comparison to ours, but that is mostly due to high taxes. Why did you bring trains into it? BTW, some trains run on electricity and not petroleum. *** Edited 9/7/2006 8:52:04 PM UTC by rablat5***

No it doesn't when you can catch a train from one town or city to the other and have urban rail in almost all cities of any size.

Granted We are more suburbanites than most of Europe but when you add the benifits. The 6-7 dollars a gallon is not much higher and there are ways around it compared to us.

Chuck

Anyway, back on topic. I don't know what the hand-wringing is all about. Arthur, I don't think anyone believes Six Flags can continue to operate the way that some of their parks are currently operating (that is, higher prices with no increase in quality). I do agree with the philosophy of "fix it first, then raise the prices," but I honestly don't believe that was an option for Six Flags. They are in dire straits and need cash right away. They have to squeeze as much money out of their customers as they can just to make their interest payments. Don't worry - this can't last forever. When you're talking about selling half a dozen parks, you're pretty much backed into a corner already.

Yes, it seems like it's a crazy or cold-hearted business move to jack up prices in the face of some continuing poor service, but I just don't think Six Flags had any other realistic options short of filing for Chapter 11.

To repeat what has already been said, Six Flags is in a world of financial hurt. I think some people don't recognize how utterly bad $2 billion dollars in debt is. I am absolutely stunned that Burke and Co. were able to keep the chain in business without going bankrupt for as long as they did. The reason we're seeing drastic measures now is because the creditors are finally calling (weren't some of the major loan payments due at the end of 2006?).

I too feel that the only way for Six Flags to survive is to get back to six or seven parks. I will be shocked if they don't file for bankruptcy in the next year or two. And I'll cut Shapiro a ton of slack because he walked into a disaster, and I'm not sure anyone can get Six Flags out of it. It's not a matter of "if someone else was in charge." If they didn't up the prices this year, they very well may have had to shutter some parks (like SFDL) in July instead of September.

Who is going to buy the smaller Six Flags parks? Right now, three of them (excluding waterparks) are on the block: SFDL, SFEG, and EV. There may already be a potential buyer for the New York park and EV will probably survive because there are so few parks in the Northwest. Elitchs is the big question mark. Will it have a buyer or will Lakeside become the only remaining park in Denver?

I believe that Six Flags should also unload SFKK and TGE (sure, they called TGE a "no touch" park but this is another park that might do better under independent ownership). It's too small and too out of the way to be the kind of park that really fits in with Six Flags future plans. SFKK is in a small market and also has too much competition from other parks, primarily KI and HW.

I simply don't believe that the "Six Flags" pricing and methods of operation belong in the smaller parks. These parks need to be operated differently from parks such as SFGAdv, SFGAm, SFNE, SFOT, and SFOG.

Well put, Olsor. While what they are doing is bad business, they are backed into a corner and need money fast.

I don't know, however, if that plan will work, as the attendance has fallen off, and people who actually do come to the parks may still notice the bad operations and then SF may further turn people off to the parks for the future. Broken promises, along with higher prices--I'm not sure how much people will stand for this.

As Arthur said, they shouldn't implement their pricing strategy at the smaller parks. For example, SFA shouldn't be charging $49.99--they should be $39.99. And $15 for parking? Please--this isn't Redskins stadium. Parking at THAT park should be no more than $8-$10.

While SFGAdv is, IMO, still overpriced, they pull from the New York market, which is more used to ridiculous pricing. And it's also the coaster capital of the east coast, and it also offers a safari, too, so they could more easily get away with their pricing (though I still don't agree with it).

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Arthur Bahl said:I simply don't believe that the "Six Flags" pricing and methods of operation belong in the smaller parks. These parks need to be operated differently from parks such as SFGAdv, SFGAm, SFNE, SFOT, and SFOG.

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EXACTLY....there needs to be a shift in the WAY they're thinking if SFI is really going to operate parks as diverse in demographics AND in offering as, say, SFGAm and SFGE. One business model does NOT fit all parks, and will not. They need to be treated differently if they're both going to stay in the same "family". No doubt about it, trying to "shoehorn" the parks TO the business approach will only result in further deterioration of the BRAND as a whole...

If you look at Six Flags, you notice that the bigger parks are mostly the ones from the Time-Warner days. The smaller parks are mostly the old Premier parks, many of which were once family run parks. Six Flags was much better back when they had about six or seven parks, all of them quite large (I believe that SFStL was the smallest of their theme parks at that time ).

I really would like to see parks like TGE and SFEG run more like KW or LC or even like some of the smaller Cedar Fair parks such as VF or WOF. Six Flags should be a big park chain with a great variety of major attractions and theming that justifies a higher level of pricing. Even so, I do believe that the food and drink pricing at Six Flags should be brought down a bit to enhance the overall park experience for visitors.

Do you guys think it might befit Six Flags to do a company split?

Say, for instance, keep the parks that are the larger ones (like the TW SF parks) and keep them as Six Flags. For the smaller parks, create a secondary company--like a subsidiary--to exist under.

The parent company would still be Six Flags, but they could operate under 2 somewhat different management and business models. This way, the large parks could be focused on as large parks, and the small-medium parks could be focused on differently--kinda bring them back at least to the pre-Six Flags Premier/Tierco days.

They could do a season pass program similar to the Cedar Fair parks. Have season passes for each individual park at one price, then have a "Six Flags Gold Pass" or whatever for admission to all the theme parks in the chain. On top of that, they could do a "Six Flags Platinum Pass", which would also give external water park admission, as well. :)

It probably wouldn't take a secondary company---just a new brand name. I was thinking about that as well. I'd probably create the new brand for the larger parks, though. It's not as if Six Flags has a strong positive identity or anything...

^ Haha good point. But would just a secondary brand name be good enough for management to take a different approach? Would management actually take a different approach to the parks of one brand name versus the parks of another, if JUST a new brand name was created (versus a subsidiary coporation)?

I wonder if they could get out of some of their financial troubles by creating 1 or 2 new companies? There's so many laws and such, but they probably have considered this one :)

But Six Flags, even though it has a bad reputation--do you think that they could actually get rid of it altogether? It is very well known.

Of course, if the public didn't know any better, a new brand name may actually help them, as people may actually perceive more of a change than before. *** Edited 9/8/2006 6:04:09 PM UTC by rablat5***

The name change didn't help Geauga Lake. ;)

But it is an interesting angle. Very interesting.

One of the things I noticed is that most mid-sized parks (500,000 to 2 million attendance) have full admission/POP prices in the low to mid $30s. The main exceptions are some of the Six Flags parks (which are higher and ofen overpriced) and parks like GL and KW where the price reflects the economic conditions in the region where the parks are located. (In GLs case, it also reflects CFs way of dealing with the lingering negative goodwill left over from the SFWOA days).

Clearly, Six Flags needs to remove the "big" park pricing mentality from the smaller parks.

. *** Edited 9/8/2006 6:25:07 PM UTC by Arthur Bahl***

Good point, Arthur. Just helps my opinion of the overpricing of Six Flags :)

Gonch, you're right about GL. It's a shame that the place doesn't do better than it does. It's almost like the best kept amusement park secret in Ohio, since the crowds are small, but the offerings and price are pretty good. I went there on a Saturday in August and the lines were short (though it was overcast and it rained at times).

Perhaps that could be partially chalked up to marketing, as some of the people in the region may just not know yet. If SF implemented some serious name/brand changes along with their promises, then seriously got the word out, people may be more willing to give them a shot again.

Perhaps distancing themselves from the severely tainted Six Flags name could be a good move. Create a brand that, from the start, is family-oriented and focused. Easier to create a new brand image than fix an old one sometimes?

Still gotta disagree with you guys.

Some parks and their online tickets prices:

Holiday World - $32.95
Knoebels - $33.50 (POP)
Lake Compunce - $32.95
Kennywood - $28.95

SFKK - $30.99
SFDL - $29.99
SFEG - $34.99
WWEV - $28.99

Average cost of the four 'value parks' - $32.09
Average cost of the four 'small SF parks" - $31.24

The 'big park' mentality pricing is not evident at the small parks...at least not at the gate. (which is specifically what Arthur's post talks about)

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But would just a secondary brand name be good enough for management to take a different approach? Would management actually take a different approach to the parks of one brand name versus the parks of another, if JUST a new brand name was created (versus a subsidiary coporation)?

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I think so, actually. Some of the problems that arise are due to current management having only *one* brand to market: the Six Flags brand. For economies of scale, there is a single market message: a local, family-friendly, inexpensive alternative to flying to Disney for a week.

That works in some places, but it sucks for Magic Mountain, when Disneyland is just a short drive away. I believe that's part of the reason why Magic Mountain is on the block---not just because of the land value in Valencia, but because it can't possibly fit the new brand image, no matter what they do.

Consider the hotel industry as a comparison point: Marriott owns nearly a dozen different brands, from the extremely nice JW Marriott on down to the Fairfield Inn. In the same general area, these have approximately a 2-3x price difference between them, but they also differ significantly in quality, amenities, and features.

Furthermore, where these brands go says a lot about the brand. The JW Marriotts are in city centers, near the ritzy end of town, the theater district, the financial district, with big convention centers nearby. The Fairfields are in out-of-the-way places, near highway interchanges and two-story poured-concrete industrial parks.

One company: two very different brands, with two very different markets.

You could imagine Six Flags trying to do the same thing---big parks with heavily populated market bases and full-power attraction lineups, and the smaller, more isolated formerly-family-owned parks.

Paramount generally marketed and positioned all of their parks exactly the same way, though they all have certain similarities: they are all near at least mid-sized population centers, for example.

Disney used to market their properties mostly separately, but starting with the Happiest Celebration/Homecoming, there was significant cross-resort promotion, and this year's Year of a Million Dreams is a single marketing message for their parks worldwide.

In contrast, every Cedar Fair park (pre-Paramount) is marketed completely separately, and has a completely separate identity. Only recently with the CP/GL combo pass product has the chain ever worked hard to exploit cross-promotion. Except for the "Cedar Fair, LP" logo on all the trash cans, you'd hardly know they were the same company. Though I suppose the sheer number of said trash cans might give it away too.