Meanwhile At Brand SIX

[The Interpreter]

http://bizbeatblog.dallasnews.com/2016/02/six-flags-splits-top-leadership-roles-posts-record-revenue.html/

interesting.

very interesting.

[Magenta Lizard]

I really have to wonder about that. Teens on average don't have the disposible income they did, say 15 or 20 years ago. I would think young families were more likely to spend money inside the park. And, depending upon the particular teens that find the park appealing, they can create a culture that makes other potential demographics stay away because they feel unsafe.

It's not the gameplan I would have chosen.

[The Interpreter]

That's the way they want that article read.

And that's NOT the strategy.

Note the rotation...and balance over time. One year families, one year kids, one year teens. Something EVERY year for EVERY park...

Greatly increased attendance, revenues and profits.

They are doing it right....

[Magenta Lizard]

I agree with that, if its the actual plan. I love a balanced park with something to make everyone happy.

[CoastersRZ]

By comparison, there are certain Cedar Fair parks that have not seen new additions in several years, no matter how small.

[PyroKinesis]

By comparison, there are certain Cedar Fair parks that have not seen new additions in several years, no matter how small.

 

That's the negative of having your brand be associated with one park; Cedar Point.

 

Whereas enthusiasts would say Magic Mountain is the crown jewel of the Six Flags chain, since all Six Flags parks start with the name "Six Flags" everyone will have a different answer as to their favorite.

[dare-to-fly]

It really is a matter of opinion.  Everything at Magic Mountain seemed to be a little on the run down side to me.  It seemed to be quantity over quality, or at least that was my impression.  Not that I'm knocking the park, mind you, as I loved MM, but that was my impression.

 

...Many don't share my opinion of favorite SF parks - Great America.

[Hoeter]

I've been to two SIX parks. Great Adventure and America.

 

One park was highly enjoyable for me and I hope to return and ride my favorite wood coaster and several other of their world class coasters.

 

The other park is Six Flags America.

 

I'm debating on renewing my SIX membership. I definitely want to visit Great America, and if I get to California, Magic Mountain.

[The Interpreter]

And in fairness to FUN, Mr. Kinzel is gone. Cedar Point is a critical, major part of FUN. But, THE crown jewel to the exclusion of other parks? Just as the day came that Kings Island was no longer the paragon of experience for Paramount Parks, now Cedar Point is in the top of the realm of FUN parks--but not THE top. See Canada's Wonderland, Knott's Berry Farm, Cedar Point, Kings Island..AND emergent Carowinds. Other parks are no longer held to the second level to enhance and protect Cedar Point. That was one of Richard Kinzel's dumbest, blindest strategies, but stuff like that happens when you stay too long and live in the parking lot. That and thinking your (adjectives deleted) son is the most qualified person in the world to run Carowinds. And that you try to sell out your investors for nickels on the dollar to save your own hide and enrich your personal coffers. thank heaven for the Knotts and Geof Raynor.

Note Jim Reid-Anderson is kicking (himself? being kicked?) upstairs and John Duffey is becoming CEO and Chairman. Already.

I still wonder about both chains' futures when (not if) interest rates greatly increase, oil goes up again and consumer spending greatly declines, especially discretionary spending.

Like the auto business, the park business is highly cyclical. Boom times (and this is one) become bad times.

See (link only good til next Tuesday):

http://www.autoextremist.com

Perhaps THE best business and marketing site I read regularly. Guy knows his stuff. And how.

[rhyano]

It really is a matter of opinion.  Everything at Magic Mountain seemed to be a little on the run down side to me.  It seemed to be quantity over quality, or at least that was my impression.  Not that I'm knocking the park, mind you, as I loved MM, but that was my impression.

 

...Many don't share my opinion of favorite SF parks - Great America.

I agree, Great America was excellent when I went! The only complaint was the Goliath crew but other than that it looked like they cared, which is something you don't see often in operations at SIX 

[The Interpreter]

I see it often at NJFTP.

And at Six Flags St Louis.

And Six Flags Over Georgia.

And Six Flags Over Texas.

And Six Flags Discovery Kingdom.

I could go on and on...

[Imperial79]

Here's the interview with Jim Cramer on CNBC last night.

 

[gad198]

Revenue for the fourth quarter, which ended Dec. 31, grew 18 percent to a record $217 million.  The revenue gain was driven primarily by a 22 percent increase in attendance resulting from the expansion of the company’s Halloween-themed Fright Fest and Holiday in the Park.

 

Profit for the quarter was $2.2 million, a big swing from a $34.12 million loss a year ago.

 

Six Flags attendance for the year grew by 11 percent to 28.6 million visitors, of which 56 percent were either season pass holders or members.

 

Total guest spending per capita in 2015 was $41.60, a decrease of $1.37 or 3 percent compared to 2014, half of which related to changes in year-over-year foreign currency exchange rates. On a constant currency basis, full year total guest spending declined $0.67 or 2 percent due to the higher mix of season pass and member attendance.

 

These are the four statements that struck me the most.  The last two statements - about the higher season pass base and the decline in per caps - is telling.  The proportion of SIX season pass holders vs. total attendance has nearly doubled in the last six years - from 30% in 2009 to a whopping 56% in 2015.  Much of that growth has been driven by the aggressive season pass pricing models SIX has been using.  I have both SIX and FUN premium passes.  My 2016 SIX pass cost me less than a third of what my FUN platinum pass cost.  I think it's fair to say that the relatively low prices of the passes have something to do with the SIX season pass sales growth.

 

The question I would pose is this - why hasn't SIX raised the prices of their season passes if attendance and per caps are on an upward trajectory?  Disney, Universal, Holiday World, Dollywood and FUN parks have had no reservations about upping their season pass prices over time.  Why hasn't SIX been following suit?  SIX per caps are rising for a reason, so if season pass costs aren't rising then it's non-season pass admissions and in-park spending that are rising.  Both SIX and FUN have both said publicly that a higher mix of season pass holders puts downward pressure on per caps, and the current pace at which SIX season pass attendance is going up is unsustainable.

 

The flip side to the SIX season pass strategy is that they are insulating a large portion of their revenue streams if the economy goes south again.  That's certainly good for business.  The downside to that strategy is that an economic downturn isn't an ideal time to enact season pass price hikes unless people see value in your product.  SIX then has to worry about losing season pass business because it's the bulk of their attendance. 

 

Something just feels off here but I can't put my finger on what it is right now.  One thing of interest is that SIX capital expenditures have remained largely unchanged since 2008.  FUN capital expenditures have more than doubled during that same time frame.  SIX has been buying back a lot of their stock which has been good for existing shareholders.  On the other hand, why is SIX buying back stock versus investing more money in their existing parks?  Most companies buy back stock when they have a lot of cash on hand and/or believe that their stock is undervalued.  I don't see either being the case right now with SIX.  Why isn't SIX investing more in their parks right now?

 

I don't agree with everything that the Interpreter says about SIX right now, but I completely agree with what he says about how an economic downturn and/or interest rate hikes will negatively affect both SIX and FUN because of the nature of their debt loads.  The last time their debt-to-equity ratios were this high was back in 2007.  The economy went south and both stocks (and their dividends) got hammered.  This won't end well for either company unless debt paydown becomes a priority.          

[dare-to-fly]

 

It really is a matter of opinion.  Everything at Magic Mountain seemed to be a little on the run down side to me.  It seemed to be quantity over quality, or at least that was my impression.  Not that I'm knocking the park, mind you, as I loved MM, but that was my impression.

 

...Many don't share my opinion of favorite SF parks - Great America.

I agree, Great America was excellent when I went! The only complaint was the Goliath crew but other than that it looked like they cared, which is something you don't see often in operations at SIX 

 

I'm glad to know you agreed about Great America.  I haven't been for several years, but I've always really enjoyed it.  It's not just about the crews and caring for me, but about the whole experience all around. 

 

In general, I have had good experiences at most Six Flags parks, which by the way in include Great Adventure, America, Great America, Kentucky Kingdom, St. Louis, Magic Mountain, and Over Georgia.  I tend to enjoy parks both big and small and have always wondered why so many rag on America.  The only park that I have yet to have a good experience yet is often stated as others' favorite Six Flags.  Hopefully someday I'll have a good experience in Georgia, but so far not.  I love the coasters, but the rest of the experience has left much to be desired all three times.