Coronavirus Impacting Theme Parks

[disco2000]

3 minutes ago, bjcolglazier said:

"No Covid-19 spike as a result of Kings Island opening" is not a particularly news-grabbing headline as it were. The virus is dangerous. Not suggesting it is not. But all the headlines making money are doom and gloom.

Imagine the headlines IF/when Warren County goes red...

[bjcolglazier]

We're either headed toward a vaccine in Oct-Nov-Dec, or complete shutdown, massively awful winter. Could go either way. I doubt it'll be this complacent back-and-forth we've had this summer though. Nature will decide.

[Hawaiian Coasters 325]

Cedar Fair's Q2 results are in! Here are some key takeaways:

1) attendance is lower than expected

2) attendance at Cedar Point and Kings Island were strong when the parks first opened, but started to tamper off recently which explains the drop of the reservation system.

3) attendance is averaging around 15% capacity. Both KI and CP are permitted to operate at 50% capacity

4) While CF is disappointed that park attendance is less than expected, Brian Witherow said they are pleased people are still coming to the park

5) Witherow also said that in park spending is still strong enough that the parks are able to operate profitably. 

Overall, while it's kinda scary, I have full confidence in Cedar Fair that they'll get through this and attendance and revenue will start bouncing back over the next few years as restrictions are lifted. 

Here's my source: https://www.cleveland.com/business/2020/08/cedar-fair-acknowledges-park-attendance-hasnt-met-expectations-reports-second-quarter-operating-loss.html?outputType=amp

 

 

[King Ding Dong]

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

[bjcolglazier]

11 minutes ago, King Ding Dong said:

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

Fuzzy math. But they did just issue almost a billion dollars of notes not due until 2025. Let's be honest...the park will not survive if 15% attendance is a multiple-year-event, or the "new-normal" as is the catchphrase of 2020. No way.

[King Ding Dong]

Fuzzy Math must be a 500 or 600 level course, can’t find it in the undergraduate catalog.  

[bjcolglazier]

1 minute ago, King Ding Dong said:

Fuzzy Math must be a 500 or 600 level course, can’t find it in the undergraduate catalog.  

It's required material for Political Science degrees. ;-)

[Maddog]

Thanks for the Q2 update @Hawaiian Coasters 325!  It really shows how in park spending is key to their financials. 

If everyone here really wants to help their park, go and spend money! Going just to use already paid for benefits (passes, meal plans, etc.) doesn't improve the bottom line.  Buy some merch, get some extra treats, play some games .

[jimlaheyscar]

58 minutes ago, King Ding Dong said:

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

Things like reducing hours and labor costs help.  

[Benjamin22]

1 hour ago, King Ding Dong said:

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

I don’t believe the company itself is profitable currently. The parks Individually maybe profitable however the corporate overhead costs are not being accounted for. Also minor nitpick but they’re currently at 20%-25% attendance (In park spending is also up around 5% however up-charge spending Is down aka fastlane)

[Hawaiian Coasters 325]

15 minutes ago, Maddog said:

Thanks for the Q2 update @Hawaiian Coasters 325!  It really shows how in park spending is key to their financials. 

If everyone here really wants to help their park, go and spend money! Going just to use already paid for benefits (passes, meal plans, etc.) doesn't improve the bottom line.  Buy some merch, get some extra treats, play some games .

Definitely! As an associate, I try to help the park out as much as I can. I try to visit as a guest when I'm not working as much as I can and spend some money in the park. The more you help the park, the sooner we'll get another coaster (which is 4 years out minimum imo). 

[BeeastFarmer]

I don't know if it's the heat that has kept some people away or not.  It has me.  I went yesterday (Tuesday) and it seems like it was almost normal as far as crowds.  I have to admit, it was a nice sight to see.  

Kentucky KIngdom just added days in August to their calendar..  While they have canceled the Halloween event, they feasibly could add weekends in for fall fun.  I think having the waterpark open has been advantageous for them.

[SnakePlissken]

3 minutes ago, BeeastFarmer said:

I don't know if it's the heat that has kept some people away or not.  It has me.  I went yesterday (Tuesday) and it seems like it was almost normal as far as crowds.  I have to admit, it was a nice sight to see.  

Kentucky KIngdom just added days in August to their calendar..  While they have canceled the Halloween event, they feasibly could add weekends in for fall fun.  I think having the waterpark open has been advantageous for them.

Do you have a link somewhere to that info about Kentucky Kingdoms Halloween cancellation? While I expected this I have messaged them about it after they updated their hours and got no response. It's part of the reason I bought a season pass and I haven't used it nor is it good next year.

[BeeastFarmer]

3 minutes ago, SnakePlissken said:

Do you have a link somewhere to that info about Kentucky Kingdoms Halloween cancellation? While I expected this I have messaged them about it after they updated their hours and got no response. It's part of the reason I bought a season pass and I haven't used it nor is it good next year.

I think it was in the KK SP holders Facebook page.  And yes, if you bought your 2020 pass after a certain date this year, it is only good for 2020 and was at a discounted rate.  I hope you get to use it while they are open.

[YOULLBEBACK]

Now would be a great time to invest in FUN (Cedar Fair).  Stock is very low, and if amusement parks go under, well, we'll have bigger problems to worry about. 

While I'm glad KI is open, the slower lines due to less trains running and social distancing protocols make it less of an experience in 2020.  I know I'll appreciate it and enjoy it more in 2021 and anticipate the stock to be in the mid- 40's by this time in 2021. 

Buy FUN and thank me later:) 

[wabashcr]

11 hours ago, King Ding Dong said:

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

I don't think it's a matter of park profitability so much as, are they making enough to service their debt.  They already had considerable debt, and just took on another billion in the spring.  So while it's nice that they're not losing money by opening the parks, operating income is critically low.  CF is most likely big enough to weather a lost year like this through a combination of belt tightening and kicking the debt can down the road.  But they're going to need several big years to get back on track, or else their future plans will likely look a lot different.

[MoreFogPlease]

7 minutes ago, YOULLBEBACK said:

Now would be a great time to invest in FUN (Cedar Fair).  Stock is very low, and if amusement parks go under, well, we'll have bigger problems to worry about. 

While I'm glad KI is open, the slower lines due to less trains running and social distancing protocols make it less of an experience in 2020.  I know I'll appreciate it and enjoy it more in 2021 and anticipate the stock to be in the mid- 40's by this time in 2021. 

Buy FUN and thank me later:) 

Unless you do your own taxes

[Rifleman]

1 hour ago, YOULLBEBACK said:

Now would be a great time to invest in FUN (Cedar Fair).  Stock is very low, and if amusement parks go under, well, we'll have bigger problems to worry about. 

While I'm glad KI is open, the slower lines due to less trains running and social distancing protocols make it less of an experience in 2020.  I know I'll appreciate it and enjoy it more in 2021 and anticipate the stock to be in the mid- 40's by this time in 2021. 

Buy FUN and thank me later:) 

I have added significantly to my holdings in FUN during the shutdown. Pre-COVID I always liked the stock as it had a great dividend, but if you are a buy and hold type, there is certainly alot of upside in the price right now. That being said, all investments have risk, so do not invest money in an individual stock that you cannot afford to loose.

[standbyme]

https://www.vox.com/the-goods/21346476/disney-world-reopening-magic-kingdom-covid-florida
 

[IceePirate]

I'd like to think that about half a percent from the increase of in park spending is due to me lol. 

[Kenban]

14 hours ago, King Ding Dong said:

So if the parks are able to operate profitably at 15% attendance the profit margins at 50% capacity in “normal times” must be enormous, but they aren’t.  What gives?

Disney did a better job explaining, but the parks are likely profitable in the sense that they are covering all variable operating costs, and it sounds like they are even covering the current fixed costs, but even if they are as soon as the parks close for the year the revenue stops and they have to cover ongoing costs with debt which would normally be paid from previous profits.  The parks have done a good job at keeping the expenses low enough they are better off then if the parks were closed, but this is not sustainable long term, because taxes, electricity, maintenance, and full time employees still need paid.
 

Also Kings Island and Cedar Point are very profitable in good times, they are two of the most profitable seasonal amusement parks in the country and likely the planet.  Looking at just Cedar Fair the big 4 parks, Cedar Point, Knott's, Kings Island, Canada's Wonderland account for 80% of the chains revenue, and most of the profits as well.  That 80% came from the article linked earlier, I remember it being slightly lower based on previous charts which the chain has released, but its been a few years since I saw one.

[disco2000]

This will be interesting to see how this plays out moving forward....

https://www.wlwt.com/article/gov-mike-dewine-has-tested-positive-for-coronavirus/33535243#

[FUN&ONLY!]

1 hour ago, Kenban said:

Disney did a better job explaining, but the parks are likely profitable in the sense that they are covering all variable operating costs, and it sounds like they are even covering the current fixed costs, but even if they are as soon as the parks close for the year the revenue stops and they have to cover ongoing costs with debt which would normally be paid from previous profits.  The parks have done a good job at keeping the expenses low enough they are better off then if the parks were closed, but this is not sustainable long term, because taxes, electricity, maintenance, and full time employees still need paid.
 

Also Kings Island and Cedar Point are very profitable in good times, they are two of the most profitable seasonal amusement parks in the country and likely the planet.  Looking at just Cedar Fair the big 4 parks, Cedar Point, Knott's, Kings Island, Canada's Wonderland account for 80% of the chains revenue, and most of the profits as well.  That 80% came from the article linked earlier, I remember it being slightly lower based on previous charts which the chain has released, but its been a few years since I saw one.

That 80% of revenue figure is correct. I followed Cedar Fair’s conference call yesterday, and Brian Witherow confirmed that statistic. For what it’s worth, Cedar Point, Kings Island, Canada’s Wonderland, and Knott’s Berry Farm all reported record performance last year.

[Benjamin22]

34 minutes ago, FUN&ONLY! said:

That 80% of revenue figure is correct. I followed Cedar Fair’s conference call yesterday, and Brian Witherow conformed that statistic. For what it’s worth, Cedar Point, Kings Island, Canada’s Wonderland, and Knott’s Berry Farm all reported record performance last year.

I’m honestly guessing he misspoke and meant it was 80% EBITDA and not 80% revenue. When you look at this chart you can see the Big 4 probably make up 60-70% of revenue. Given the recent M&A I’d be very surprised if the Big 4 grew in revenue that much to make up 80%. Some of these people’s questions were worded poorly.  (Note the graphs are from 2016). If those parks did account for 80% then they experienced some insane growth then.

[dbackdreams]

Um I'm sad they closed because whether is great not hot!!!! We had fun at Kentuckys kingdom and we may go to King's island this weekend!!!!!

[Gabe]

5 hours ago, YOULLBEBACK said:

Now would be a great time to invest in FUN (Cedar Fair).  Stock is very low, and if amusement parks go under, well, we'll have bigger problems to worry about. 

While I'm glad KI is open, the slower lines due to less trains running and social distancing protocols make it less of an experience in 2020.  I know I'll appreciate it and enjoy it more in 2021 and anticipate the stock to be in the mid- 40's by this time in 2021. 

Buy FUN and thank me later:) 

even before COVID, FUN was not a good buy.  Its revenue stream is basically limited to theme parks open for 4-5 months a year.  I think 25 a share is high right now.  If it got down to 20, I might be inclined to purchase a bit and see if it can get up to 30-40 a share in a year or 2.  Otherwise, no thanks.

[Winterfestguy]

I bought a bunch of FUN in March when it was almost at it’s lowest point of $15 and at today’s $25.89 Closing price, very happy with my purchase.  I doubt the price will go much below $23 (given that all the announcements have already been made of which parks won’t open at all) and may actually go up if Canada Wonderland or Knotts can open at all this season.  Of course good fall weather on an October could increase crowds at CP and KI with their special fall even this year.  (Remember the traffic and crowd mess at CP last October).

[bjcolglazier]

42 minutes ago, Winterfestguy said:

I bought a bunch of FUN in March when it was almost at it’s lowest point of $15 and at today’s $25.89 Closing price, very happy with my purchase.  I doubt the price will go much below $23 (given that all the announcements have already been made of which parks won’t open at all) and may actually go up if Canada Wonderland or Knotts can open at all this season.  Of course good fall weather on an October could increase crowds at CP and KI with their special fall even this year.  (Remember the traffic and crowd mess at CP last October).

I think there's another thread somewhere here for this conversation, and I absolutely do not consider investing in the market a "gamble", but I had to drop this here. Personally, I think you could (should?) sell now, and buy it down again later, and watch it go back up next summer. But I don't have a crystal ball either. Unless we get a vaccine I think winter is going to be brutal on the market. And amusement park stocks? In a pandemic winter? Pffft. But maybe we will get a solution sooner rather than later. We all hope so. Either way, you've got to know when to hold 'em, know when to fold 'em. Know when to walk away. Know when to run. 

 

[dbackdreams]

19 hours ago, bjcolglazier said:

I think there's another thread somewhere here for this conversation, and I absolutely do not consider investing in the market a "gamble", but I had to drop this here. Personally, I think you could (should?) sell now, and buy it down again later, and watch it go back up next summer. But I don't have a crystal ball either. Unless we get a vaccine I think winter is going to be brutal on the market. And amusement park stocks? In a pandemic winter? Pffft. But maybe we will get a solution sooner rather than later. We all hope so. Either way, you've got to know when to hold 'em, know when to fold 'em. Know when to walk away. Know when to run. 

 

I'm sad he dide because he was good signer.  Did the virs kill him or just because he was old?

[robintodd]

7 minutes ago, dbackdreams said:

I'm sad he dide because he was good signer.  Did the virs kill him or just because he was old?

He died March 20, 2020 of natural causes at the age of 81.