"Families Are Where The Money Comes From"

[KI Kevin]

Okay, so at the press release for Diamondback last year, I overheard a representative from Cedar Fair talking to a guest about how the company has realized that "families are where the money comes from". He said two other things:

1. Kings Island would not be getting any major rides any time soon.

2. Cedar Fair will most likely not be installing any TTD type rides into any of their parks in the future.

Let's look at the flaws in the statment that money comes from the families, so we won't be getting any major rides:

1. Who says families can't ride big rides? If a whole family is there, can't the bigger kids go with one adult to the big rides while the younger kids go with one adult to the smaller rides? I believe so.

2. Who says the moneys coming from families. I really hate to break it to you guys, but whenever I go to Kings Island I see WAY more teenagers with their friends than I do full families.

3. Go into Action Zone and Nickelodeon Universe and compare the number of people in each one. Include people in ride lines too. Notice a difference? There are a lot more people in Action Zone than there are Nick Universe.

So, you guys can think what you want to think, but I do not agree with that statement.

[Avatar]

First of all that statement as your heard it is in fact true, maybe not the nickle and dimes but the dollars which in turns helps them with the average Per Cap spending of guests. Which help them show financiers and inverters that they have focused in on how to maximize there income potential. With that statement they still have added two thrill coasters at KI in three years which is more than most could hope for.

It is a fact a most parks that the families are tho ones who pull out the wallet and spend money on games, rides, food and merchandise. Teenagers which the park does love usually have limited amount of money to spend.

How many teenagers are there at the $12..99 Back Yard BBQ and at the $16.99 Rivertown Junction Buffet. I would say KI makes a lot more money from those two dinning choices than they do from any long line in Action Zone.

[CedarPointer]

On most of my trips to the park, I don't spend anything (platinum pass, take advantage of free cups of water, etc). Families do.

[KI Kevin]

First of all that statement as your heard it is in fact true, maybe not the nickle and dimes but the dollars which in turns helps them with the average Per Cap spending of guests. Which help them show financiers and inverters that they have focused in on how to maximize there income potential. With that statement they still have added two thrill coasters at KI in three years which is more than most could hope for.

It is a fact a most parks that the families are tho ones who pull out the wallet and spend money on games, rides, food and merchandise. Teenagers which the park does love usually have limited amount of money to spend.

thats a good point. and the two thrill rides in three years is a lot is a good argument

[KI Kevin]

^but then again, Firehawk did come from another Cedar Fair park...

[gigacoaster2k]

I only disagree with that statement because it's so generalized. Kings Island has worked so hard to appeal to so many venues. Claiming that families are where the money comes from shows that the park feels that it needs to redeem itself for something, which it does not need to do.

There are all types of people and all types of groups that visit an amusement park. There are singles, couples, families, enthusiast and VIP groups, small and large groups of friends, church and youth groups, school bands and organizations, and company outings. Families don't necessarily spend the most. In fact, I see most families out in the parking lot having a tailgate party with lawn chairs, blankets, coolers, and the car radio on. I spend money on clothing, food, and souvenirs, and am a 3 time platinum passholder.

I feel that it is not fair to them for them to claim that their money only comes from one source, regardless of how appropriate that phrase may sound to a limited group of people.

[Avatar]

No argument just a discussion and believe me I felt the same way many years ago. With that said as a family man now I do spend far more money at the park than I did in my twenties with out the family.

^but then again, Firehawk did come from another Cedar Fair park...

True but most KI guest have never gone to that park to ride it so it is new to them and it did cost a lot to relocate it.

[Avatar]

I only disagree with that statement because it's so generalized. Kings Island has worked so hard to appeal to so many venues. Claiming that families are where the money comes from shows that the park feels that it needs to redeem itself for something, which it does not need to do.

There are all types of people and all types of groups that visit an amusement park. There are singles, couples, families, enthusiast and VIP groups, small and large groups of friends, church and youth groups, school bands and organizations, and company outings. Families don't necessarily spend the most. In fact, I see most families out in the parking lot having a tailgate party with lawn chairs, blankets, coolers, and the car radio on. I spend money on clothing, food, and souvenirs, and am a 3 time platinum passholder.

I feel that it is not fair to them for them to claim that their money only comes from one source, regardless of how appropriate that phrase may sound to a limited group of people.

I have never heard any park make the claim that the only money they make comes in from families. Yes they make a lot from groups and events and even from teenagers especially at Halloween time. But it is a true fact that families is where the biggest revenue source comes from. Keep in mind that would include a Mom and Dad bringing their teenage children to the park as well.

[XGatorHead 8904]

There's a couple flaws in your logic, guitarkevin. I don't see how there is a connection between what you first heard him say about the money coming from families and that we wouldn't be getting any major rides soon. They way you have it worded in your post, these are seperate statements. I don't see where he said "KI won't get any major rides because more money comes from families". There are many other things to consider when planning for major rides.

First, there's the economy... it's bad, and CF has a good chunk of debt to pay off in the meantime. Second, there are more parks in the CF chain than just KI. We just got a $22 million investment. What did the other parks in the chain get this year? Nothing near that amount of investment. They need to focus on their other parks as well, let's not forget this. They can't invest all in one or two parks and expect the whole chain to survive. That's ludicrous. They need to plan investments in all the parks to insure the strength of the company.

Also, just because there are more of one type of people in an area of the park doesn't mean that those people are spending more money. In other words, there may be more teens than families, but they don't necessarily spend more money than families. Teens may pay for food and games, but I would imagine more merch is purchased by families, and families are paying for 3, 4, 5+ people, not just themselves like teens are.

I would imagine that more families pay for general admission than teens do. By general admission, I mean one day/two day tickets as opposed to season passes. If you have a season pass, do the math... how much you paid for your pass divided by how many times you visit = your admission price per visit. I paid $84.99 for my 2009 pass, I've been 6 times already this year. So far, I'm paying $14.17 per visit. That amoutn will go down the more I use my pass. Compare this to the family who visits one day and pays $32.99 each.

Historically, the park has done better in the years where they invested in family rides rather that big coasters. There's a reason for that. Typically, who has more money to spend... parents or teens? I'll let you think about that.

[KI Kevin]

I only disagree with that statement because it's so generalized. Kings Island has worked so hard to appeal to so many venues. Claiming that families are where the money comes from shows that the park feels that it needs to redeem itself for something, which it does not need to do.

There are all types of people and all types of groups that visit an amusement park. There are singles, couples, families, enthusiast and VIP groups, small and large groups of friends, church and youth groups, school bands and organizations, and company outings. Families don't necessarily spend the most. In fact, I see most families out in the parking lot having a tailgate party with lawn chairs, blankets, coolers, and the car radio on. I spend money on clothing, food, and souvenirs, and am a 3 time platinum passholder.

I feel that it is not fair to them for them to claim that their money only comes from one source, regardless of how appropriate that phrase may sound to a limited group of people.

I have never heard any park make the claim that the only money they make comes in from families. Yes they make a lot from groups and events and even from teenagers especially at Halloween time. But it is a true fact that families is where the biggest revenue source comes from. Keep in mind that would include a Mom and Dad bringing their teenage children to the park as well.

i agree with both of you. but the one thing is, whenever usually when I am there with my family or a friend's family we usually pack lunch then go out to the parking lot and eat it at lunch time.

[KI Kevin]

I don't see where he said "KI won't get any major rides because more money comes from families".

Thats what the rep said. because families generally arent attracted towards thrill rides. plus, KI has an award winning kids area, so I dont think theres a need for much improvement. very good points though. however, I would like to see some Hanna Barbera themed rides come back.

I miss Scooby Doo's GhosterCoaster!

[Avatar]

Oh by the way, I did notice that Kings Island so far this year has opened a high thrill roller coaster, talked to the media about a teen age boy saving his money to get a first ride auction seat. In addition to that they have booked a All Sports Action event over memorial day and are offering a free alternative rock concert free of charge on the same weekend. So with that said it looks to me that Kings Island is really trying to appeal to the teenage market this year.

[Ki Man]

2. Cedar Fair will most likely not be installing any TTD type rides into any of their parks in the future.

I don't think any park will be getting a massive Intamin rocket coaster in the future!

[SOB_TOM]

That statement is completely true. A teenager (or a single person) is more likely to bring a cooler, or go out to eat outside the park than they are eating inside the park. If a family of four, lets say two adults, a 15 year old and a 8 year old, go to the park, they are going to pay for admission (if not season pass holders,) then pay for at least one meal (most likely two,) not to mention a good chance of buying some sort of merchandise, and maybe a game or two.

A single person will pay for gate admission, most likely eat at the car, skip the merch and the games, and just ride. So yes, in fact, families are where the money is.

[Tomkatt7]

I can't speak on single people, or teenage groups. Those days went bye-bye a LOONNNNNGGGGGGG time ago.

What I can say, is when I go to the park, I am the "dad" of a family group.

I spend a butt-load of money too.

I have said this in the past too. Jacking up the cost of food, has not caused me to spend any more money in the park.

We always set aside "X" amount of nickels for in-park spending. Now, if I spend extra on food or drinks, then thats money I can't spend on games, or t-shirts.

Bottom line is, The park is going to get a certain amount of money from me on every trip. It doesn't matter to me if that is spent on games, or food. It will be spent period. I would like to buy a Diamondback shirt on my next visit. But, if it's hot, and I have to buy a few lemonaides, then I won't be able to.

[markr]

I find such a statement "Families are where the money comes from" downright insulting. Maybe I am not married with kids but I have worked just as hard for my money and have chosen KI as a place to spend that money. I have been a loyal customer of KI for 37 years and feel my opinion as to the future of the park should matter just as much as someone with a spouse and children. An amusement park should support all of its customers, not just some of its customers

People keep forgetting that although CP has a lot of thrill rides it is very family friendly. There are three nice children's areas, a great train, wonderful shows, and of course the resorts.

[markr]

That statement is completely true. A teenager (or a single person) is more likely to bring a cooler, or go out to eat outside the park than they are eating inside the park. If a family of four, lets say two adults, a 15 year old and a 8 year old, go to the park, they are going to pay for admission (if not season pass holders,) then pay for at least one meal (most likely two,) not to mention a good chance of buying some sort of merchandise, and maybe a game or two.

A single person will pay for gate admission, most likely eat at the car, skip the merch and the games, and just ride. So yes, in fact, families are where the money is.

I disagree. I believe all groups, singles and families, teenagers, etc, are likely to bring coolers because of the high prices and low quality of the food at KI. If you lower the prices and make better food, you will see all groups spending more money on food.

[gigacoaster2k]

I find such a statement "Families are where the money comes from" downright insulting. Maybe I am not married with kids but I have worked just as hard for my money and have chosen KI as a place to spend that money. I have been a loyal customer of KI and feel my opinion as to the future of the park should matter just as much as someone with a spouse and children. An amusement park should support all of its customers, not just some of its customers

Exactly the point I was trying to make.

[KIfan1980]

I think this topic is getting blown a little out of proportion. This was an 'overhead statement' from an unidentified CF representative about KI not getting new rides at the Diamondback Press announcement.

Lets not get carried away. CF and KI are obviously supporting many of their most loyal customers, but lets also recognize that as a business they also are responsible to shareholders to understand the business situation and find a way to increase shareholder value. This value comes from sales of Season Passes, Individual Tickets, Games, Food, Merchandise (and not necessarily in that order) - if this adds up to families being the biggest driver, so be it. My guess is its true - based upon the lines at Nick U restaurants and the number of kids I see eating blue ice cream!

[Avatar]

So let me get this strait if I was selling Popsicles nationwide and the deep south was were the most sales and competition are I should equally keep advertising and offering new items in Alaska were the sales were much softer in fear of offending the Eskimo's. It is what it is in every business out there the amusement/theme parks want all the sales they can get and from anyone/group they can. But since at the end of the day they operate to make a profit they will see who is spending what where and adjust their advertisements to maximize their business model. They do not ignore a group over another but will focus their decisions to pull the most they can out of each group.

[The Interpreter]

Not only that, but Cedar Fair LP is NOT a stockholder company. It is, rather, a limited partnership. Unless you own units in the master partnership (which almost no one does), you have exactly NO say in how the company is run. The general partner calls the shots. There is no common stock. NONE. As an LP unit holder, you get to share in whatever distribution the company decides to throw your way, under the decisions of the general partner. Again, unit holders of Cedar Fair LP get no say in how the company is run. This is not a stock corporation.

[markr]

Perhaps that statement "Families are where the money is" was never said. However, assuming it was said for the sake of argument, it is a very poor choice of words. Remember, it is just as important how you say something and how you come across to others as what you say.

And from a business perspective, I believe indeed you will be more profitable if you support all your customers instead of just part of your customes. Sure there are lines in the Nick Universe but there are also lines at the thrill rides. (DB, Beast, SOB, etc. ) The rollercoaster is and will always be the bread and butter of any amusement park.

And from a business perspective it is just as important, perhaps more important, not to offend your loyal base of customers at the expense of getting new customers. Remember, it takes years to maintain a customer but just 30 seconds to lose a customer.

[Avatar]

Six Flags Anyone?

Cedar Fair does a great job trying to cater to everyone and as far as Kings Island, they added two Thrill Coasters for their last two new attractions. I believe they seen a need for them and acted on it. If I was a betting man (and I'm not) I would not bet on a new Thrill Coaster they may have another need.

[markr]

I agree with you, Cedar Fair is doing an awesome job of catering to all their customers, not just part of them. I am just saying that the words "Families are where the money comes from" is a poor choice of words. It is insulting to many people like me who choose to be single. I have no problem with a business trying to make a buck but insulting your ( however unintentional ) loyal customers is hardly a way to be profitable.

[KIfan1980]

markr - completely understand and agree with your point. From a customer perspective, this statement should not have been made (I hope you wouldn't see a similar comment in the transcript from the recent analysts call). I was merely trying to assess the perceived accuracy of the statement from my perspective.

terpy - appreciate you sharing your knowledge on the LP structure (I'll have to do more research to better understand this). I do assume, though, that even without input from the partners, the fact that FUN units are publicly traded and owned by executives does drive the company to run the business trying to increase unit value.

[The Interpreter]

At the present, more than driving up unit value, I strongly suspect the major thing driving the executives is the strong pressure to reduce corporate debt in order to preserve the company and their very positions...

[HandsUp]

I can appreciate the fact that families are a huge market for any park-and likely, on average, spend more per capita inside the park than couples, teens, or singles. I'd bet though, that families will visit the park less often. So in terms of volume, who knows?

To optimize revenue, you need to appeal to many demos. In the PKI days, I felt that the park had sold its' soul in the name of 'family-friendliness'...leaving thrill-seekers out in the cold. Now there is much more balance. Plenty of family attractions, yet enough thrill rides to keep you busy for the bulk of the day. Given the two major thrill additions (FH and DB), it makes sense that we wouldn't get anything too extreme for a while to come.

They could always draw families, but Cedar Fair has won me back..and I will spend a good portion of the summer up there-buying a beer here and a smurf cone there over several visits-even if I'm not feeding a family of four, or blowing money on games.

[Ogrmac]

I bring my nieces (ages 6 and 9) to the park once a year for 2 days. I will say that I probably spend more money in the park those 2 days than I do the rest of my visits combined, not including the price of my pass. The phrase "Families are where the money comes from" does not offend me, because when I come to the park as part of a family unit, I go home broke. If I come by myself, I still have at least some money in my pocket when I exit.

[XGatorHead 8904]

In the PKI days, I felt that the park had sold its' soul in the name of 'family-friendliness'...leaving thrill-seekers out in the cold.

What? Yeah, Paramount really left thrill seekers out in the cold with Top Gun, EXtreme Skyflyer, Flight of Fear, Wipeout Beach, Drop Zone, Face/Off, Son of Beast, TR:TR, Delirium, Slingshot, Tasmanian Typhoon, Coolangata Racers, and Italian Job.

[markr]

To say that "families" ( whatever your definition of that term is ) do not enjoy coasters/thrill rides is an over-generalization. Many people whether they be single or married, children, teenagers, adults, senior citizens, love coasters/thrill rides and many people whether they be single or married,children,teenagers,adults, senior citizens, cannot stand coasters/thrill rides. That is why you have to survey all of your customer groups, not just some of them.