Leland Wykoff

The conference call announcement of a three year capital investment in hotel properties at Cedar Point of between $15 and $20 million annually focused on a "refreshment program" and developing a three tiered room and pricing strategy characterized as good, better, best. Focus groups and other intelligence strategies will be employed to better understand guest expectations and attending price points. Cedar Fair also announced the removal and relocation of employee dorms from the Point to free up valuable property for future development. That nature of that development was not clear. Hotels, attractions, or ride expansions were not specified. What was clear was the search for dynamic pricing knowledge and strategies to allow for hotel revenue and profit maximization. Cedar Point was identified as having an inventory of 800 rooms. Refreshment costs would run from $56,250.00 to $75,600.00 per room. These are significant costs for a program which is not identified as a rebuild or remodel program. Construction costs for budget/economy hotels are currently estimated at $56,100.00 [excluding land costs].* With talk of suites on the conference call it is not clear if the 800 room inventory count will increase, decrease, or remain steady. One wonders if hotels outside the gates could be acquired at prices similar to the cost of planned refreshments. In any event this announcement represents a major project is on the horizon. Given Cedar Fair could build budget/economy rooms as cheaply from scratch it represents a major undertaking. Refreshment may not be the right term to characterize the plans. *http://www.hvs.com/Content/3235.pdf Leland Wykoff

This may not be an application for a single ride, but rather a collection of rides in or along an area such as the lakefront at Cedar Point. Or it may be a single ride in a similar coast type location. Just a thought...

Turns out Coke Is It! Today Cedar Fair announces a comprehensive partnership agreement extending regional product introductions, multichannel marketing, and new product introductions. The ten year agreement exploits the captive audience asset and demonstrates the new FUN management team understands the value and concept of consumer switching costs. Take a look here for more details: http://www.ariva.de/...Sponsor-4313709 This announcement confirms my earlier analysis: "Given changes in the corporate sponsorship recruitment, I would be surprised if FUN was not looking to best the beverage contract. Parks possess an asset which can be exploited in selection of products such as soft drink vendors--the concept of the power/value of product introduction to captured audiences. Essentially a park can "force" a consumer to try a different product. This is why drink companies are so eager to sign amusement parks. They can introduce new product whilst at the same time locking out competitors opportunities for product introduction. It is knowledge of this value which allows a park to effectively push for lucrative contracts. One can seriously doubt former management at Cedar Fair fully understood this dynamic or viewed it as an asset." No doubt Pepsi choked on this news as it took the big gulp and digested the bitter elixir.

Turns out Coke Is It! Today Cedar Fair announces a comprehensive partnership agreement extending regional product introductions, multichannel marketing, and new product introductions. The ten year agreement exploits the captive audience asset and demonstrates the new FUN management team understands the value and concept of consumer switching costs. Take a look here for more details: http://www.ariva.de/news/Cedar-Fair-Announces-The-Coca-Cola-Company-As-Official-Beverage-Sponsor-4313709 No doubt Pepsi nearly choked on this news at it attempted to take the big gulp and digest the bitter elixir.

ICEE extended beverage contract announced: http://www.prnewswire.com/news-releases/cedar-fair-announces-extended-partnership-with-the-icee-company-at-parks-nationwide-174753941.html

"One of the studies included in Rumor Psychology surveyed public relations professionals from Fortune 500 companies about the veracity of organizational or workplace rumors from their own experience. The authors found that most workplace rumors are 95 percent accurate." That comes from an article exploring the veracity of rumors (as distinguished from gossip). Many studies report similar findings. If The Interpreter is correct and this information first came from Jeff Putz at CoasterBuzz and/or PointBuzz it would tend to be a more reputable source than some kind of gossip. Watching the Putz video interview with CEO Ouimet it seems clear he is well connected and may have had confirmation or heard this from multiple sources ( I am not suggesting he heard it from Ouimet). Given changes in the corporate sponsorship recruitment, I would be surprised if FUN was not looking to best the beverage contract. Parks possess an asset which can be exploited in selection of products such as soft drink vendors--the concept of the power/value of product introduction to captured audiences. Essentially a park can "force" a consumer to try a different product. This is why drink companies are so eager to sign amusement parks. They can introduce new product whilst at the same time locking out competitors opportunities for product introduction. It is knowledge of this value which allows a park to effectively push for lucrative contracts. One can seriously doubt former management at Cedar Fair fully understood this dynamic or viewed it as an asset. Considering the package of information available I judged this rumor may possibly be true. That is not to say my judgement is correct. Soon enough we will know. Here is the link to the report on the study quoted above: http://www.medicalnewstoday.com/releases/54454.php

This may be hard news for Pepsi to swallow: http://micechat.com/forums/knotts-berry-farm-cedar-fair-parks/174871-Pepsi-looses-cedar-fair-contract-Coke-back.html It appears Coke has won the contract for the Cedar Fair parks.

Charlie Brown and Company have been making recent appearances other places as well. Jimmy Kimmel featured the Gangs National Coming Out Day Video: http://www.youtube.com/watch?v=COFOmtUuzcU See, it does get better!

Cedar Fair indicates they do not know if WindSeekers will reopen this season: http://www.wfmj.com/story/19757102/cedar-point-unsure-when-grounded-ride-will-reopen I tend to agree with The Interpreter's view the big issue to be resolved is reasonable evacuation times.

The Dinosaurs Alive attraction adds value. Lacking an educational component many schools will no longer allow field trips to Amusement Parks. Dinosaurs Alive addresses and fills the educational component requirement. This is also quite likely the reason for the separate admission fee. To segregate out the costs of the educational components of field trips to meet bookkeeping and regulatory requirements. Cedar Fair is savvy to exploit the school field trip market. Efforts such as Dinosaurs Alive assist in securing access to that market.

More details trickle out concerning the aborted Nashville Water Park. The news is a flurry with details concerning the melting Snow Park concept: http://www.tennessean.com/article/20121002/NEWS/310020020/Herschend-not-interested-Nashville-water-park-without-Dolly-?odyssey=tab|topnews|text|FRONTPAGE Interest in this project is severely stunted. Other industry players, such as Cedar Fair CEO Matt Ouimet, are on record saying the regional amusement park industry is fully built out in America with no room, economically, for another large capital investment park. Given Marriott's dismal past experience managing regional parks no one seriously considers them returning to the domestic industry. Six Flags has been burned often enough by over-reaching to know better. A SeaWorld would not seem to fit or make economic sense. Dito Busch Gardens. Is it likely the much smaller, enjoying significantly less revenues, lacking a deep bench management operations team, stillborn Ryman Hospitality Properties/Gaylord Entertainment will pull off such a major development? Particularly not likely given no industry partner seems willing to mid-wife such a birth. Recall, the now Ryman Hospitality Properties had to abandon the Denver Gaylord Hotel and Convention Center, a project already underway, to effect the Marriott deal.

Following the Shareholder vote converting Gaylord Entertainment to a REIT and finalizing the sale of the Gaylord Hotel Brands to Marriott, Friday it was announced the Dolly Parton partnership with Gaylord to build and develop a snow park and water park in Nashville has been cancelled. The announcement follows the news released last week transferring the General Jackson show boat and other entertainment properties to Marriott, presumably to sweeten the hotel deal previously struck. For an article rich in details concerning the cancellation of the Snow/Water Park project please see: http://www.knoxnews....ter-park-plans/

The Orange County Register has an updated WindSeeker story: http://www.ocregister.com/entertainment/WindSeeker-372554-ride-safety.html

News now claims extensive problems existed with WindSeekers prior to being placed in service, and the record of problems grew: http://www.newsnet5.com/dpp/news/local_news/investigations/Cedar-Point-temporarily-closes-popular-WindSeeker-ride-following-series-of-malfunctions-nationwide This is disturbing news.

A bit more details from California OSHA: "It’s not typical. It’s unusual, to see such a repetitiveness of issues with one type of ride," Dean Fryer, of Cal OSHA, told the NBC4 I-Team. Cal OSHA plans to investigate whether there is a design flaw in the WindSeeker ride, Fryer said. http://www.nbclosangeles.com/news/local/WindSeeker-Knotts-Berry-Farm-Cedar-Fair-Entertainment-170800256.html

Orange County Register reports state closes WindSeeker at Knotts. Video and more information concerning the recent failures are also covered. An excellent article worth the read: http://www.ocregister.com/news/ride-372262-knott-down.html

Cedar Fair announced healthy results from the FUNForward plan to increase revenues, visits, and profits: http://www.cedarfair.com/ir/press_releases/index.cfm Revenues up 5% or $40 million thru Labor Day. On track to meet revenue and profit projections. Plan to pay distributions of more than $2.00 per unit next year. Predicting record Holloween season.

Here is a link with consolidated information: http://www.knoxnews.com/news/2012/aug/22/ken-bell-retires-dollywood-president/

Dollywood seems to be borrowing a page from the play book of Cedar Fair by announcing, and promoting, an easy installment payment plan for season pass sales. The "New EASY-2-PLAY" plan breaks down the payments into six installments ranging from $20.83 to 26.83 depending upon type of pass purchased. The combo pass is for both Dollywood and Splash County waterparks. The installment plan pass can only be purchased online--no doubt to reduce costs of administering the program. The Easy-2-Play plan appears to have been inspired by the very successful plans offered for the first time this season by the Cedar Fair family of parks. The Dollywood begins next week and is promoted as ending on September 3. The offer is pitched to current season pass holders and is cross promoted utilizing the Wild Eagle roller-coaster. For more information please see http://dw.dollywood.com/easy2play/.

Carowinds has had an episode, Saturday, involving the sudden shutdown of WindSeeker and a two hour delay in getting people off the ride stuck at a height believed to have been 300 feet. Some other parks with WindSeekers have experienced similar issues. The Charlotte Observer has this story: http://www.charlotteobserver.com/2012/07/14/3382885/tallest-carowinds-ride-malfunctions.html

Operation questions simply did not have time to come up or be addressed. Comments and questions were limited to three minutes. Given only two unitholders attended it retarded the opportunity to seek more. While a strict time clock was not enforced it was clear the board had a tight time line. The Board departed rather quickly to conduct a meeting and one presumed they had afternoon flights out of nearby Charlotte Airport scheduled. The questions of ride cloning and enhanced food/cuisine developments simply did not have time to come up and be addressed. Unfortunately the new VP of foods did not attend the meeting so questions could not be addressed to him following the meeting closing. However, it is clear a new day has dawned at Cedar Fair and such questions could be addressed at a later date to management. The meeting and management teams are much more accessible and open.

Had the pleasure of attending the Annual Unitholders Meeting in Charlotte Wednesday. The three nominees were great candidates and reinforce the trend of the company moving to a much younger, more inclusive, diverse Board of Directors. The elected directors received 98 percent approval by unitholders. The leadership teams--both management and Board--continue to evolve, grow, and draw new strength from the broadened skill sets available. The Board fielded shareholder questions concerning change in control payments and agreed to consider looking into the request to eliminate payments to management when such changes in control occur. The Board was asked to consider emerging new best practices in the area of executive compensation where by measurement metrics used to trigger executive bonus payments back out the growth percentages of the industry comparison group. Example: Cedar Fair revenues increase 11% at the same time the industry comparison group average revenue increase is 10%. The executives would receive bonuses based upon the 1% gain rather than the current formula which would reward the 11% (and thus pays the executive twice for the same performance--once in base salary and again in an enhanced or overpaid bonus for achieving the average industry performance). The annual meeting was sparsely attended by unitholders. Other than company insiders, only two unitholders were in attendance. The meeting moved at a quick and efficient pace. The floor was opened to questions and management gladly addressed all issues presented. Following the meeting it was my pleasure to visit nearby Carowinds where park General Manager Bart Kinzel and VP Jerry Helms greeted us at the gate, answered questions about Carowinds, provided a history of the park, and pointed out improvements and enhancements before we enjoyed the park midway. My impressions of Carowinds were favorable. The park was sparkling clean. Most rides featured rather fresh coats of paint, and wooden coasters were being rebuilt and refreshed. WindSeeker was operating and provided excellent views of the park, skyline, and countryside. Food looked good and the fries were better than one generally expects in a park setting. Wednesday was not a heavy attendance day for Carowinds and lines moved quickly. Several coasters had just one train in operation and the wait times were a bit more in those cases. The service and park employees provided an excellent experience. Lots of smiles and happy faces. Staff appeared well trained and on task with jobs. Every employee was well groomed and polite. A superb experience. Great job employees! Cedar Fair earns an A+ for this years Annual Unitholder Meeting and the presentation at Carowinds.

The longer ride at the Cedar Point B&M winged coaster will allow for much better capacity than Dollywood's Wild Eagle. Wild Eagle, while most impressive, has only two trains and the turn around time is so compressed I see no way they could add a third train to effect a capacity gain. They simply do not have time to board and dispatch another train in time. The prior departing train is already awaiting reentry into the station prior to the second train departing. No doubt Cedar Point will have a larger station, possibly larger trains with more seats per train, as well as more than two trains. A larger station and platform could allow for boarding to be more efficient and thus departures quickened. The boarding time necessary on Wild Eagle is excessive. While training could quicken the process a bit the real time fault lies in the structure of the ride. A double station would address much of those issues.

The Orange County Register has an interesting story charting five years of lawsuits filed against Cedar Fair's Knott's Berry Farm and Disney's Disneyland. It is an interesting read. The history shows the parks generally prevail and win or settle suits. Only two significant losses and they seem to be in the category of reasonable. Here is the story: http://www.ocregister.com/news/disney-356898-knott-court.html

Interesting news out concerning Gaylord Entertainment, operator of large convention and meeting destination resort hotels, and Marriott: http://www.washingtonpost.com/business/economy/marriott-gaylord-deal-to-boost-dominance-in-washington-convention-hotel-market/2012/05/31/gJQA8gBP5U_story.html?wpisrc=nl_headlines_Fri In a nutshell Gaylord Entertainment is transitioning to become a REIT and Marriott will contract to administer specific Gaylord Hotels. Much of this change has been driven by activist shareholders demanding better returns from Gaylord Entertainment. Gaylord Entertainment will retain the joint venture with Dollywood Productions to develop an indoor snow and water park adjacent to the Gaylord Opryland Hotel. That ventures scope was widened by statements Dolly Parton made this year at Dollywood upon the occasion of the grand opening of Wild Eagle. Entrepreneur Parton described the water and snow components as only the first phase in a much larger amusement park development. This morning the CEO of Gaylord Entertainment, Colin Reed, confirmed for me Gaylord will retain the JV with Dollywood to develop the new park and will continue, with its committed investment of 50% of the costs, and those funds will come from the REIT.