Cedar Fair Hopes Consumers Will Start Spending Again At Parks

[The Interpreter]

...Last year, Cedar Fair saw attendance drop 7 percent to $22.1 million. Sales slid 8 percent to $916 million, largely because of a drop in company outings and season pass sales.

Because of that, the company had trouble meeting the performance targets promised to lenders last year. Cedar Fair is now working to refinance its long term debt, which is set to come due in 2012 and 2014.

Timothy Conder, an equity analyst with Wells Fargo Securities, said the credit market is improving and he believes the company will be able to strike a deal with its existing lenders. Like Munarriz, Conder also says he expects amusement parks to see business improve....

Munarriz said that while there's no hard evidence that business will improve for amusement parks or other consumer businesses this year, there's an intangible sense that things are getting better.

"People are starting to feel that things will be better in six months than they were six months ago, and I don't think that's something we felt at any point last year," he said.

http://www.cleveland...dar_fair_1.html

[IndyGuy4KI]

Let's hope we don't see gas prices sky rocket again this next year. That is going to be a big factor as well I think.

[The Interpreter]

I think it is NOT just the economy. I believe the ridiculous pricing combined with low quality and poor service has driven in park guests to their cars and to local businesses to eat and shop. Mr. Kinzel and Co. still believe the in park guests are a captive audience who will not leave the park to eat and shop. Last year, I believe, they began to find out otherwise. Unfortunately, from what I have seen so far at Carowinds and Kings Dominion, they have not learned from this experience. Will they? That is one of many Qs.

[DaveStroem]

Of course it would help if they would let their platinum pass in to the park with out a headache or accusations. .

[vortexfan]

I believe the ridiculous pricing combined with low quality and poor service has driven in park guests to their cars and to local businesses to eat and shop.

Absolutely! I know I mention Canada's Wonderland a lot (it's my home park), but it fits with this description so well. There are so many restaurants literally just across the street, and if you've been to CW you know how easy it is to walk to those restaurants from the parking lot. During the lunch and dinner hours there's usually a good number of park guests eating across the street (you can tell because CW uses handstamps...) Why pay high prices when you can walk to a Wendy's or Tim Horton's in about five minutes? Heck, with the urban sprawl around the park some guests can walk home in less than a half hour.

[CoastersRZ]

I`ll bring this up again. When I went down to Disney World in the fall of 2008, I was expecting to pay high prices (at least as high as KI) for food and drinks. To my surprise, 20 ounce soft drinks were only $2.50. And overall the food was reasonably priced and the quality was decent. I didn`t think twice about paying slightly elevated food prices because I was getting a decent product in return. And on the subject of soft drinks, I didn`t think twice about dropping down the $2.50 because it was still nearly $1.25 cheaper than the exact same thing at Kings Island. I would be more inclined to buy soft drinks in the park if they were more reasonably priced, and the quality of the food was better.

Simple economics dictates what the profit maximization level is. Have a high unit price, it causes demand to decrease, but the profit per unit to increase. However, there is a point where high unit price will result in such decreased demand, that the profit actually falls. In other words, the price needs to be set so that supply equals the demand, thus providing for profit maximization. In other words, there would be less profit margin on each 20 ounce soft drink sold (because of a lower price), but the park would more than make up for that decreased margin in the number of units they would sell. To put this another way, imagine if you sold 10 soft drinks at 4. That equates to $40, and after a hypothetical cost of $1 a unit, you net a $30 profit. Now, say you sell 20 soft drinks at $3. That bring in revenue of $60 with a cost of $20, which results in $40 profit. Not to mention the cheaper price leaves more money in the guests pocket, so they would be more inclined to buy a second $3 soft drink, than simply getting by with one $4 soft drink (or forgoing the $4 soft drink altogether).

[BavarianBeatle]

"Cedar Fair saw attendance drop 7 percent to $22.1 million (i.e. 22.1 million dollars)."

Another literary masterpiece from our local media outlets.... The problem is that far too many dollars attend the park but then leave and are spent at other establishments.

[The Interpreter]

I wondered how long it would be before someone spotted that one...

And the Plain Dealer normally doesn't miss errors like that one...

[CoastersRZ]

Wow. I understand that the traditional newspaper is having to adapt to a changing media after subscriptions are down and more people rely on their websites for news information. But there have been tons of errors in these articles. Almost like they are hiring students in high school or college with no journalism experience (or spell or grammar checker installed on their computers) to write these articles.

[Delirium13]

Like others have said, once people are offered something worth spending their money on (a reasonable amount of money) they will spend more money. Continuously raising prices is not going to solve the problem or make up for less people spending money it will only further discourage people.

It seems the parks are simply ignoring competition from outside restaurants, etc. rather than using the competition as incentive to improve upon the product they offer in the park. Rather they continue to offer the same tired, low quality product from past years only at a higher price. This is just asking for people to take their money outside the park.

Simple supply & demand economics would show that in reality the prices should be coming down. Granted I do not know the exact stock of food and other goods in the park but I would assume that there is no shortage, and with demand down, the logical thing would be to lower prices to encourage spending and also improve upon the quality of their offerings. If they do both then I could see the problem being a thing of the past. But this Is Cedar Fair we are talking about and logical doesn't seem to be their forte and unfortunately I can only see them continuing to jack up the prices.

[BavarianBeatle]

I also witness the number of people leaving the parks to eat and spend money elsewhere, and have serious questions about whether CF is maximizing its overall profits on food and sales of items inside the park. But I am certainly not an expert in this area...

[The Interpreter]

An article in today's Plain Dealer reports that Cedar Fair, the company that owns Cedar Point, is

hoping for an increase in attendance at its parks this summer

. With signs of recovery in the economy, the company hopes to see both an uptake in ticket sales and in concessions.

While many agree that the economy is recovering, most of our users think Cedar Fair is wrong to assume guests will spend more at the parks this summer....

http://www.cleveland.com/business/index.ssf/2010/04/business_comment_of_the_day_us.html

[bkroz]

While many agree that the economy is recovering, most of our users think Cedar Fair is wrong to assume guests will spend more at the parks this summer....

http://www.cleveland.com/business/index.ssf/2010/04/business_comment_of_the_day_us.html

Terp, have you been spouting off in article comments again?!

[The Interpreter]

Terpy does not comment on websites other than in user forii like these. He has enough to do with perusing said sites, summarizing....oopsie...

[Dalefan]

Cedar Fair to me is the cheapest on food and other stuff then Disney is. They make Cedar Fair look cheap. Lol.

[gigacoaster2k]

I constantly get heat from some people because I bring my own food, but they don't listen when I explain that I also spend money in the park.

As a college student with a minimum wage job that lives an hour from KI, I honestly don't always have the extra money to pay $15 for a meal in the park. I'm also hypoglycemic and need to eat regularly, so eating at the park every time I need to eat would strip my wallet clean.

I do sometimes bring food in a cooler to KI, but when I have the extra money, I also buy ride photos and T-shirts. I also absolutely LOVE the Dippin Dots sundaes, LaRosa's Pizza, and Panda Express, so I bring a little extra for those things when I can.

Oh and CP's frozen custard is worth every penny. Not to mention I spend money for Skyscraper tix, meals from Burger Patio, Chuck Wagon Pizza, Toft's Ice Cream, Johnny Rockets, and Panda Express. I also find myself buying souvenirs from their Pagoda gift shop.

The delicious meals I find at different parks alone are worth the extra money spent. I have noticed that many amusement parks offer food places local to the area, most of which I don't find around Dayton, Ohio. That alone is enough for me to take extra money into the park when I can. I love to try new foods, and when it's good enough, I couldn't care less about the price I'm paying.. I absolutely hate that CF is in debt, and wish I could contribute more.

I'm all for helping CF out, but sometimes the circumstances just don't allow it for me.

[gigacoaster2k]

My computer did a double post on me. I'm sorry.

[TylerRider]

I hope there is more information of the popcorn refill buckets. Those look like a great deal.

Edit: 700

[Browntggrr]

I constantly get heat from some people because I bring my own food, but they don't listen when I explain that I also spend money in the park.

In 1979 (the earliest I can remember), my family brought food & drink to the parks in coolers. We simply would meet back at the car and have lunch & snacks. Dinner at KI was at IR if we had the extra cash, if not, dinner would be sandwiches as well.

There is absolutely nothing wrong with bringing food to the park.

And for most parks, not only does bringing food make economical sense, the quality is better too!

[Delirium_Guy]

Cedar Fair to me is the cheapest on food and other stuff then Disney is. They make Cedar Fair look cheap. Lol.

Actually, you couldn't be further from the truth. As someone who visits a Disney park at least once a week, I assure you the prices are more reasonable than Cedar Fair. For example.....a 32oz Coke at any of the quick service restaurants only costs $2.39 on Disney property. Prices are well over $3 at KI, KD, Carowinds and so forth. Another example at the Electric Umbrella at Epcot....Cheeseburger served with french fries is $6.39, with generous portions I might add. The point is, its incredibly easy to eat for $10 or less at any of the Disney theme parks. Can't say I've had that luck on my last few visits to KI, much less enjoyed the food I paid the price for.

- Todd

[PhantomTheater]

I remember, when parks would allow one to bring the cooler into the park itself! That's what my family usually did, nothing beats making your own deli sandwich while watching a near by coaster. Now it's a picnic in the parking lot at most places, CP at least still has public shelters by main gate.

[RingMaster]

Cedar Fair to me is the cheapest on food and other stuff then Disney is. They make Cedar Fair look cheap. Lol.

Actually, you couldn't be further from the truth. As someone who visits a Disney park at least once a week, I assure you the prices are more reasonable than Cedar Fair. For example.....a 32oz Coke at any of the quick service restaurants only costs $2.39 on Disney property. Prices are well over $3 at KI, KD, Carowinds and so forth. Another example at the Electric Umbrella at Epcot....Cheeseburger served with french fries is $6.39, with generous portions I might add. The point is, its incredibly easy to eat for $10 or less at any of the Disney theme parks. Can't say I've had that luck on my last few visits to KI, much less enjoyed the food I paid the price for.

- Todd

Sodas are $3.50 at KI. I believe vending machine sodas are $3 (but don't quote me on this), so it's actually cheaper to get it from the vending machine, provided it doesn't eat your money and not give you your soda.

The only place I would bother to eat at in the park (besides Bubba Gump's) is Panda Express; they offer pretty generous portions and I happen to have a soft spot for Chinese. Even though it's a high price ($9 for two entrees, $11 for three), there isn't another PE around here (that I know of); the fact that Subway sells footlongs for $5 but KI sells 6-inchers for close to $6 is a joke.

[PhantomTheater]

Vending machines are 3.75 (at least on opening day).

[Delirium_Guy]

Sodas are $3.50 at KI. I believe vending machine sodas are $3 (but don't quote me on this), so it's actually cheaper to get it from the vending machine, provided it doesn't eat your money and not give you your soda.

The only place I would bother to eat at in the park (besides Bubba Gump's) is Panda Express; they offer pretty generous portions and I happen to have a soft spot for Chinese. Even though it's a high price ($9 for two entrees, $11 for three), there isn't another PE around here (that I know of); the fact that Subway sells footlongs for $5 but KI sells 6-inchers for close to $6 is a joke.

I'll have to check out the vending machines at Epcot over the weekend, I typically go for fountain drinks over bottles so I'm not remembering what the price is.....I still want to say the vending machine prices are no more than $2.50, but for some reason $2 for a bottle is sticking out in my mind. Either way, still cheaper than KI.

I'm with you though, if I'm going to be paying out the money for an in-park meal at KI or any other CF Park for that matter, I'm going to be going for something that I know I'll semi-enjoy...i.e Skyline, Panda Express! I'm certainly not going to pay for the crap that they serve up in Festhaus thats been sitting out for what taste like hours. I have no issue paying a little more if I know the quality is there, perfect example would be Dollywood. The food is excellent! I always drop a quite a bit in that Park everytime I go because of that.

- Todd

[The Interpreter]

Gas prices, quarter after quarter of declining in park spending at Cedar Fair, and...this year, that $3.75 soda is now $4.00 from the KI machines...a large is $3.99 from the fountains, with a "medium" only 20 cents less.

Knoebels Grove Amusement Resort is worried about gasoline prices reducing in park spending...as I posted earlier today in the gasoline prices thread "here"

[flightoffear1996]

I still dont understand why they don't lower the prices in the park. People would be more likely to buy in park food rather than eat in there cars. It seriously probaly cost the park a nickel to make a pop so they could lower a large pop to $3.00 and way more people will buy it.

[CedarPointer]

20oz bottled drinks from vending machines and carts are $4.00. 20oz bottled water from anywhere is $4.00. Small fountain drink is $4.04 including tax, but a large is still $4.25 like last year.

[The Interpreter]

Last year, Camden Park priced a small Coke at 99 cents. Though it brought in lots of business, some say park management was concerned with lost profits. Volume vs. margin....it's all a calculation...