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Cedar Fair Corporate Development Discussion Thread (FUN)

P. 70: Cedar Fair unveils 2022 operating season plans

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I used the advanced search feature looking for a Cedar Fair Corporate Discussion thread and somehow found nothing.

I added the word "Corporate" to this thread title just now to help with future searches.

Edited by robbalvey
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I'm just throwing this out there but a combination of a lower Canadian dollar plus a volatile American president and his followers might be creating a "travel everywhere but the US" mentality.

I know that KI and CP would get a fair amount of Canadians.... not sure about the parks further south.

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(ie: "It's because they took the chicken tender and gravy wrap off the dining plan" or "It's because Valravn is developing a rattle", but it's actually really hard to come up with anything reasonable to explain this).

The Valravn rattle is EXACTLY the problem. No theorizing needed.

 

It IS fascinating that even though less people are going to the parks, those same people are actually spending more money throughout their day.

 

I'm going through the TEA Theme Index right now. Interesting (estimated / approximated) attendance trends from 2014 to 2017...

 

Knott's Berry Farm had a 5% increase, then a 3.8% increase, then only a 0.5% increase.

Canada's Wonderland had a 2% increase, then a 2.9% increase, then only a 1% increase.

Cedar Point had an 8% increase, then a 2.8% increase, then stayed even.

Kings Island had a 3% increase, then a 1.5% increase, then a 2.5% increase.

 

Across the top performers of chain you can see that the increases in attendance year over year are kind of shrinking. But that's happening with other coaster parks too. The top-performing Six Flags parks are going through those same sort of "increase decreases". Hersheypark is experiencing the same sort of stuff too, but they're just one park.

 

EDIT: Based on those trends I don't think that a "travel anywhere but the United States" mentality is what's going on here...yet.

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Yikes that is not great. Glad I don't have any FUN in my 401k right now. Item of note the CEO mentioned they were "pleased" with guest response to "particularly Steel Vengeance and HangTime" but not Twisted Timbers. Probably means nothing in the long run honestly but interesting to me in the least. Guess Twisted Timbers may not be having the impact on KDs attendance they were hoping for.

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Yikes that is not great. Glad I don't have any FUN in my 401k right now. Item of note the CEO mentioned they were "pleased" with guest response to "particularly Steel Vengeance and HangTime" but not Twisted Timbers. Probably means nothing in the long run honestly but interesting to me in the least. Guess Twisted Timbers may not be having the impact on KDs attendance they were hoping for.

 

I wouldn't read that far into that. Honestly, if anything I feel like those two parks aren't performing as well as they would like them to so they're justifying their investments by talking about guest satisfaction which investors frankly don't care about. The implication is that attendance will increase over time due to those investments thanks to word of mouth because of the positive guest feedback, but that's not an easy thing to measure.

 

Kings Dominion will likely have the biggest attendance jump in the chain this year anyway since they're going to add about 25 operating days to the calendar.

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(ie: "It's because they took the chicken tender and gravy wrap off the dining plan" or "It's because Valravn is developing a rattle", but it's actually really hard to come up with anything reasonable to explain this).

The Valravn rattle is EXACTLY the problem. No theorizing needed.

 

It IS fascinating that even though less people are going to the parks, those same people are actually spending more money throughout their day.

 

I'm going through the TEA Theme Index right now. Interesting (estimated / approximated) attendance trends from 2014 to 2017...

 

Knott's Berry Farm had a 5% increase, then a 3.8% increase, then only a 0.5% increase.

Canada's Wonderland had a 2% increase, then a 2.9% increase, then only a 1% increase.

Cedar Point had an 8% increase, then a 2.8% increase, then stayed even.

Kings Island had a 3% increase, then a 1.5% increase, then a 2.5% increase.

 

Across the top performers of chain you can see that the increases in attendance year over year are kind of shrinking. But that's happening with other coaster parks too. The top-performing Six Flags parks are going through those same sort of "increase decreases". Hersheypark is experiencing the same sort of stuff too, but they're just one park.

 

EDIT: Based on those trends I don't think that a "travel anywhere but the United States" mentality is what's going on here...yet.

This is a good point, and iirc, didn't SIX say last year that they expected attendance to level off, and that was the primary driver for the higher tier memberships? Even if I do remember that correctly, it could be unique to SIX and not impact FUN, or it could be affecting both of them, or all seasonal parks, or all parks. We don't have a whole lot of data yet.

 

This really could be just due to the Great Recession. A lot of people, ourselves included, reduced spending from 2009-13 when it impacted us most, then when the economy recovered and good jobs were available again, the first thing we wanted to do was go on a vacation and feel like life was back to normal. That would explain the rapid increase in attendance that is now leveling off because the people who want to go to a CF park are now already doing so.

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This really could be just due to the Great Recession. A lot of people, ourselves included, reduced spending from 2009-13 when it impacted us most, then when the economy recovered and good jobs were available again, the first thing we wanted to do was go on a vacation and feel like life was back to normal. That would explain the rapid increase in attendance that is now leveling off because the people who want to go to a CF park are now already doing so.

When you go back to including the 2013 season, you would appear to be on the right track. According to the Theme Index, both Cedar Point and Canada's Wonderland were actually down in attendance in 2014 compared to 2013, -4% and -1% respectively. Kings Island was up 1% and Knott's Berry Farm broke even.

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EDIT: Based on those trends I don't think that a "travel anywhere but the United States" mentality is what's going on here...yet.

 

Cant speak for other people but thanks to the behaviour of the us government my wife and i will not go to yankey land.

We get to go to france for vacation this year. As a bonus we are going to amigoland to ride one of the few Jumbo jets still in operation. ( and the food and drink are better there too. )

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I've got to admit, I have very few theories on what's going on here and it doesn't seem like the chain does either. The economy is good... gas prices are up a tiny bit but it's not all that significant. I don't know, but thee numbers are very unexpected (as evidenced by the reaction on Wall Street).

 

I'm actually surprised at the reaction to Wall Street as I don't see as much concern as Wall Street and some fans think. Here's why:

 

- They are wrapping on a very strong Q1/Q2 in 2017. They stated Kings Island had record April and May last year in prior earnings call. Without a new ride it will be tough to wrap on that. Sure you had new ride at KD for the whole quarter but it had problems and bad press. And KD doesn't do the numbers KI does.

- RailBlazer just opened.

- Weather. Yeah, its the "easy" excuse. But let's not forget the horrible cold & wet start to season Kings Dominion had. I believe there was some earlier closings in there due to that. Same with Carowinds and Kings Island in April. Also, Memorial Day was quite rainy for a better part of the east coast.

- Not wrapping on same for same hotels. Sandcastle Suites is gone. Sure last year Breakers was missing the smaller Bon Air wing, but not have 170+ rooms at CP suites prices does hurt the bottom line. I believe average daily rate was around 200-400 a room vs. Bon Air which was usually under 200/250.

- Steel Vengeance. The crash, the closures, the issues, etc were all over the news in the core markets. Detroit TV stations were even running stories the one day it closed for testing in late May. But mainly I think it pushed people to later in season. Also look at the Frontier Hoedown they did. That likely didn't count as gate clicks - if you didn't have the event that's probably 10-15k more in attendance you would've saw in the first few weeks. I know several people with passes that went to that, then didn't go again for another month or so. Also, you lost all that easy FastLane+ revenue for a few weeks.

 

Someday I'd love to try to do a deep dive into the impact of sports team on attendance. No surprise one of the best years for regional parks was '94 when MLB was on strike. May seem like a stretch to say KD and CP lost entertainment dollars (or even days from people wanting to stay home and watch games) due to playoff runs.

 

I'm going through the TEA Theme Index right now. Interesting (estimated / approximated) attendance trends from 2014 to 2017...

 

Knott's Berry Farm had a 5% increase, then a 3.8% increase, then only a 0.5% increase.

Canada's Wonderland had a 2% increase, then a 2.9% increase, then only a 1% increase.

Cedar Point had an 8% increase, then a 2.8% increase, then stayed even.

Kings Island had a 3% increase, then a 1.5% increase, then a 2.5% increase.

 

Kings Island's GM confirmed last year's number was much higher than what was reported by TEA. I believe by about 300k - 2017 was their best year since the record year like 20 years back (again according to the GM).

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Kings Island's GM confirmed last year's number was much higher than what was reported by TEA. I believe by about 300k - 2017 was their best year since the record year like 20 years back (again according to the GM).

That would mean an 11.4% increase in attendance if the 300,000 number is accurate. Fascinating. They should submit that info, the TEA makes a few revisions to the Theme Index over the course of the year.

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That would mean an 11.4% increase in attendance if the 300,000 number is accurate. Fascinating. They should submit that info, the TEA makes a few revisions to the Theme Index over the course of the year.

 

I don't think they care. I know a lot of people in regional parks laugh at the numbers by how off they are (though I've heard with the bigger chains they take it more serious and the numbers are closer - Universal forced them to republish the report when they were drastically off back in early 2000s). With Kings Island it was a clear lack of research on TEA's part. CF announced it was the best year since 1998 on the earnings call. Then you add in the extra 25+ days of WinterFest and it would've made it one of the best ever. TEA just likely isn't listening to all the earning calls because they had a few other years since 1998 as higher than 2017.

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I've got to admit, I have very few theories on what's going on here and it doesn't seem like the chain does either. The economy is good... gas prices are up a tiny bit but it's not all that significant. I don't know, but thee numbers are very unexpected (as evidenced by the reaction on Wall Street).

 

I'm actually surprised at the reaction to Wall Street as I don't see as much concern as Wall Street and some fans think. Here's why:

 

- They are wrapping on a very strong Q1/Q2 in 2017. They stated Kings Island had record April and May last year in prior earnings call. Without a new ride it will be tough to wrap on that. Sure you had new ride at KD for the whole quarter but it had problems and bad press. And KD doesn't do the numbers KI does.

- RailBlazer just opened.

- Weather. Yeah, its the "easy" excuse. But let's not forget the horrible cold & wet start to season Kings Dominion had. I believe there was some earlier closings in there due to that. Same with Carowinds and Kings Island in April. Also, Memorial Day was quite rainy for a better part of the east coast.

- Not wrapping on same for same hotels. Sandcastle Suites is gone. Sure last year Breakers was missing the smaller Bon Air wing, but not have 170+ rooms at CP suites prices does hurt the bottom line. I believe average daily rate was around 200-400 a room vs. Bon Air which was usually under 200/250.

- Steel Vengeance. The crash, the closures, the issues, etc were all over the news in the core markets. Detroit TV stations were even running stories the one day it closed for testing in late May. But mainly I think it pushed people to later in season. Also look at the Frontier Hoedown they did. That likely didn't count as gate clicks - if you didn't have the event that's probably 10-15k more in attendance you would've saw in the first few weeks. I know several people with passes that went to that, then didn't go again for another month or so. Also, you lost all that easy FastLane+ revenue for a few weeks.

 

Someday I'd love to try to do a deep dive into the impact of sports team on attendance. No surprise one of the best years for regional parks was '94 when MLB was on strike. May seem like a stretch to say KD and CP lost entertainment dollars (or even days from people wanting to stay home and watch games) due to playoff runs.

 

I'm going through the TEA Theme Index right now. Interesting (estimated / approximated) attendance trends from 2014 to 2017...

 

Knott's Berry Farm had a 5% increase, then a 3.8% increase, then only a 0.5% increase.

Canada's Wonderland had a 2% increase, then a 2.9% increase, then only a 1% increase.

Cedar Point had an 8% increase, then a 2.8% increase, then stayed even.

Kings Island had a 3% increase, then a 1.5% increase, then a 2.5% increase.

 

Kings Island's GM confirmed last year's number was much higher than what was reported by TEA. I believe by about 300k - 2017 was their best year since the record year like 20 years back (again according to the GM).

 

I know I did the Hoedown then went to Kings Island for Memorial Day. Skipping Cedar Point until late June. Normally I have a few Cedar Point visits in by then.

 

If the sports theory is true, Kennywood/Sandcastle should be picking up, especially with the new revamps next year. Pirates attendance is less than half of what it was 3 years ago. I don't think that's unreasonable either... on the Penguins SCF runs the past 2 years, I worked my park visits around the Playoff schedule. This year, I added Dorney in with the early exit and a few extra days at Kings Island.

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I did a statistical modeling project for a grad school class a few years ago looking at attendance increases at a park in years when a new attraction was added vs years a new attraction wasn't added trying to determine if there was a correlation between attendance and new attraction, and surprisingly enough over time there was little to no correlation between attendance increase and opening a new attraction.

 

Now this project was for a different park in a different market, and you can use data to prove anything you want if you choose the right set/variables/controls etc., but I think sometimes we just assume that opening something spectacular will equate to an immediate and significant increase in attendance when in reality there are so many factors in play that it's just not the case.

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Of course we don't have all the numbers, but this huge of a drop doesn't make sense based on the 1st half of year revenue change.

2018 - $633 Million $563MM in-park, $70MM out-of-park

2017 - $641 Million $573MM in-park, $68MM out-of-park

 

That is only a $1.2% change in revenue which should not create a 8% drop in stock price, when management is stating that they anticipate implementing a 4% dividend increase.

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Of course we don't have all the numbers, but this huge of a drop doesn't make sense based on the 1st half of year revenue change.

2018 - $633 Million $563MM in-park, $70MM out-of-park

2017 - $641 Million $573MM in-park, $68MM out-of-park

 

That is only a $1.2% change in revenue which should not create a 8% drop in stock price, when management is stating that they anticipate implementing a 4% dividend increase.

 

The drop is not based on just a 1.2% change in revenue but how performance compared with market expectations. The dividend increase was previously announced and baked into the share price. Announcing they were missing that target as well would have resulted in an even bigger drop.

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Of course we don't have all the numbers, but this huge of a drop doesn't make sense based on the 1st half of year revenue change.

2018 - $633 Million $563MM in-park, $70MM out-of-park

2017 - $641 Million $573MM in-park, $68MM out-of-park

 

That is only a $1.2% change in revenue which should not create a 8% drop in stock price, when management is stating that they anticipate implementing a 4% dividend increase.

 

The drop is not based on just a 1.2% change in revenue but how performance compared with market expectations. The dividend increase was previously announced and baked into the share price. Announcing they were missing that target as well would have resulted in an even bigger drop.

 

Agreed, we don't have all the numbers. By what percent did they miss expectations?

 

But you don't announce that you expect to increase the dividend by a specific % unless you are extremely confident about the results of the next 2 quarters.

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Of course we don't have all the numbers, but this huge of a drop doesn't make sense based on the 1st half of year revenue change.

2018 - $633 Million $563MM in-park, $70MM out-of-park

2017 - $641 Million $573MM in-park, $68MM out-of-park

 

That is only a $1.2% change in revenue which should not create a 8% drop in stock price, when management is stating that they anticipate implementing a 4% dividend increase.

 

If attendance has plateaued and is receeding and with it revenue is dropping, then most people looking for a growth stock aren't going to see it in their future with labor costs rising and tarrifs likely to lead to a variety of cost increases as well. Ergo, they headed for the door now rather than wait around.

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There's no perfect thread for this since this isn't really a "corporate discussion" thing but spamming every park thread would be dumb, so I figured I'd drop in quick and mention that it looks like every Cedar Fair park has been added to Queue Times except for Valleyfair and Dorney because Dorney doesn't have queues.

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