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Leland Wykoff

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KIC Junky (3/13)

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  1. The sudden and unexpected departure of Cedar Fair chief council Milkie has ruffled feathers at Sandusky City Hall. The Sandusky Register has a surprisingly frank story delving into the concerns and dissatisfaction by city officials. The article touches upon concerns about corporate positions shifting to the Charlotte office. https://sanduskyregister.com/news/326168/city-wants-sit-down/
  2. Cedar Point's Castaway Bay indoor water park resort, along with the recently acquired Sawmill Creek Resort are to remain closed throughout the 2021 season. Renovations to both properties were underway following the 2019 season. However, work was slowed or suspended during the covid closures and crisis. It is unclear why hotel renovations were not completed or saw substantial progress during the covid pause. The delay in completing refreshments on these properties will depress off park revenues and earnings in 2021. https://www.cleveland.com/entertainment/2021/03/cedar-points-castaway-bay-wont-open-this-year-as-renovations-resume.html Additionally, the work scheduled to begin at the announced hotel at Canada's Wonderland was halted and the permitting process was abandoned by Cedar Fair. This shall delay the progress of pivoting CW into a Resort property with extended seasons. WinterFest at CW was exceptionally well received indicating the real posibilities for additional season extending festivals and events. In another blow to FUN some partners who provided and produced recent events, such as Feld Entertainment with the Monster Truck production, have not survived the economic covid crisis. These bankrupt partners may effect offerings in the coming season as events are paired back. Cedar Fair has made much of the learning they have come out of the lost covid year. The implications are FUN learnt a thing or two about the successful operation of food and other festivals independent of full park operations. This suggests more special event offerings may be on the table which will take place without rides and all attractions being open and full park operations underway. Such partial resort operations would substantially cut opperating costs while providing new cost effective revenue streams. Hotel operations being curtailed will necessarily hamper these efforts. It seems very short sighted of FUN not to have taken advantage of the 2020 pause and completed hotel and other renovations.
  3. The deadline for responsive proposals to the City of Gilroy for development opportunities upon excess land at Gilroy Gardens had been extend approximately three weeks, until February 12th. The proposal deadline extension suggested the City might have been engaged in chasing a particular developer, or developer group, negotiating an answer and submission to the Request for Proposal. The City of Gilroy received one responsive proposal from Imagine That Design and Production, LLC. Due to pandemic related city office closures it is possible other proposals may have been submitted. Once the mail has been checked and vetted Wednesday any additional submissions will be recorded. It is not expected other responsive proposals were likely received. Jimmy Forbis, Gilroy City Administrator, has confirmed the receipt of the response from Imagine That Design and Production, LLC. In addition, Gilroy has removed the RFP from its website as the opportunity to respond has officially closed. As more details emerge I plan to report them here.
  4. Gilroy Gardens to open May 22 under the continued management of Cedar Fair: https://patch.com/california/gilroy/gilroy-gardens-announces-2021-reopening-date
  5. Herschend set up an acquisitions and mergers branch before the epidemic arrived. Heavy hitters involved. Included was a stated intent to locate investment partners. Cedar Fair took simular action several years ago setting up former CEO Matt Ouimet in a position and office to oversee acquisitions. Then absolutely no transactions occured for years. The pandemic may accelerate, or act as a deceleration to acquisitions. Much will depend upon both healthy access to capital along with depressed asset prices, mixed with available funding for operators to restart operations. Here is a story about Herschend moves in the Growth Department: https://www.knoxnews.com/story/money/2020/11/24/dollywood-new-president-looks-to-expansion-smoky-mountain-cabins-dreammore-res/6405205002/
  6. The Orange County Register has published an interesting report which delves into why Disney has moved to end its season pass programs. The likely culprit seems to be a concern millions of season pass holders will swamp Parks reservations soaking up all available visitations due to covid required crowd reduction efforts It helps to think about Park capacity much as an airline or hotel conceptualizes seat and room inventory. Once the airplane leaves the runway with an empty seat that revenue can never be recaptured. The seat was as perishable as a Boysenberry left to rot on the vine. Ditto a hotel room. If it fails to sell tonight that room night of revenue can never be sold and captured. The sun set and rose on the opportunity to sell the inventory. The room revenue potential is forever lost. Perished in the daylight. Now think about Park visits in the same vein. No longer able to just squeeze one more visitor in the gates due to covid capacity limits, your product has become much more like an airline seat or hotel room. Both industries the management of occupancy or seating capacity is referred to as yield management. The goal is to achieve some level of revenue on every seat or room every day. Some seats will be sold at a discount, if necessary. Same for the hotel room. At the end of the day the airline or hotel achieves increased revenues. Doesn’t that sound an awful like an amusement park with covid crowd restrictions? Yield management to the rescue. Suddenly, the Park must make each seat count. Maximum revenue must be obtained from each admission. See the problem with unlimited season pass admissions? On many days they are capable of soaking up every available space but at highly discounted prices. Best for Park industry to start selling the limited capacity at premium rates—just like cruise lines do. With suddenly limited capacity at Parks the value and revenue stream from each ticket becomes much more critical to company health and profitability. Indeed, it becomes paramount. The best, highest spending, guest must be placed in the Park first and foremost. Then unsold space can be discounted and put on clearance to harvest additional revenues. Just like an airline seat. These are the concepts the Orange County Register newspaper report hints at but fails to spell out in simple terms. Fram a revenue perspective Amusement Parks are now much more like hotels than a festival ground, which can almost always accommodate just-one-more guest. https://www.ocregister.com/2021/02/04/disneyland-seizes-opportunity-to-reboot-annual-pass-program
  7. More details on the plans: https://gilroydispatch.com/year-in-review-2020-gilroy-seeks-developers-to-advance-recreational-goals/
  8. Gilroy Gardens, managed by Cedar Fair for several decades, is seeking a new Development Partner to expand and utilize hundreds of aditional undeveloped acres with bike trails and other adventure and recreational uses. This could signal the impending end of Cedar Fair's management contract: https://patch.com/california/gilroy/gilroy-recreation-based-tourism-development-proposals-sought
  9. Disney announces end of Season Passes as California Parks reopen following Covid interuptions. Look for other industry players to scrutinize Disneys move toward a membership type program and expect other chains to emulate the Magic Kingdoms lead. https://www.latimes.com/entertainment-arts/story/2021-01-14/disney-annual-pass-disneyland
  10. https://www.ocregister.com/2020/12/29/imagineer-joe-rohde-reflects-on-40-years-of-dreaming-up-disney-theme-park-attractions
  11. Lets try posting the link again. Sorry: https://sanduskyregister.com/news/293840/marous-announces-acquisition-of-battery-park/#:~:text=SANDUSKY — Battery Park Sandusky — an,commissioners agreed to the deal.
  12. Interesting development involving management of a Sandusky marina. Given Sawmill Creek marina has a history of losses (see allegations from lawsuit in report above). Perhaps consolidation in Marina operations is coming to the lake front: https://sanduskyregister.com/live-content/subscribe/
  13. The Sandusky Register reports on a lawsuit filed by former partners of Sawmill Creek Resort claiming they failed to receive profits from the sale. Of particular interest are alleged revenues and losses reviled in the filing. The suit claims the marina saw only about $330,000.00 in revenue in 2017. The golf course was operating at a loss most years acording to the court filing. The Resort was reportedly in debt. Cedar Fair acquired Sawmill for around $13.4 million dollars. Originally announcing a two year renovation and refreshment would be undertaken. Cedar Fair did an about face and announced a full closure of the Resort with all or most work to be completed over the winter and spring. Renovation efforts were reportedly suspended, stopped, or significantly pared back following the pandemic outbreak. https://sanduskyregister.com/news/293624/former-sawmill-investors-sue/
  14. Here is an interesting story: https://www.postandcourier.com/business/carowinds-theme-park-on-the-sc-nc-line-to-reopen-this-year/article_15c4dc6c-1936-11eb-96c1-87ed1331f50a.html Carowinds is likely opening this season to position itself for opening for operations in Spring 2021. They may wish to develop a track record of success they can point out to justify the safety of a fuller reopening next season. Carowinds strattles two states thus requiring multiple jurisdictions approval of broad plans to reopen (possibly to limited operations) next year. The events planned for this season could, conceivably, take place in only one state. Thus it would be easier to utilize leverage to resume some operations now. Think of it as setting the table for next year.
  15. Disney Cruise Line announces three neew ships, to be built in Germany, with a passenger capacity similar to current ships: https://dse.news/releases/2019/10/30/disney-cruise-line-announces-three-new-ships/
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