Saturday, August 8, 2020

Heard On... Cedar Fair's 2nd Quarter 2020 Earnings Call

Cedar Fair had their 2nd quarter 2020 earnings release and subsequent call last week, just after Six Flags Entertainment released theirs.  As was found in Six Flags' numbers, things weren't especially great for Cedar Fair - all of which is expected in these troubled times.  Here are some of our notes from the call:

• 2nd Quarter results include only Worlds of Fun and the two Schlitterbahn parks in Texas.  Net revenues were $7 million, which comes from a decrease in attendance of 8 million and a $44 million decrease in out of park revenues.  The operating loss for the quarter was $142 million, and the EBITDA loss was $85 million.

• With regard to liquidity, Cedar Fair is using about $30-$40 million per month through the end of 2020.  They also reaffirmed that they have enough liquidity to last until the end of 2021 even if all parks are forced to close until then.

© Kings Island

• The company is trying to keep its brand reputation strong by staying engaged with visitors and employees, using this season to base future investment decisions, operating strategies and park programming in the future, revising marketing to be as efficient as possible, using scalable technology based initiatives to improve safety, maintaining a disciplined approach to cash use and investing in new capabilities to capitalize on changes in consumer behavior and preferences.

• Overall season pass sales for the year are down more than 30% or 900,000 passes.

• For the rest of the season that the parks are open the company expects them to have 20% - 25% of historical attendance (which translates to 15% of theoretical capacity).  On some good days some of the bigger parks have seen attendance hit closer to 40% of historical attendance.  These rates have been affected by COVID-19 case spikes in markets.  The 7 parks that have been able to open so far this year represent 40% of historical attendance and revenues.

• The company has proceeded to "defer or eliminate" 2020 capital expenditures as they move into 2021.  They reduced 2020 capital expansion by $75 to $100 million.  While the call did not say this, I think a big part of that was cancelling many special limit time entertainment events and festivals.

• Regarding 2021 capital expenditures, the company is "reactivating certain capital projects to ensure the properties that should be fully operational for the 2021 season are prepared and ready to maximize revenue opportunities."  They promise to provide more visibility into those plans and their outlook on the 2021 capital program later in the year.  This sounds encouraging.  They also mention that they still believe strongly in experience based additions, like Grand Carnivale and other similar attractions that will help differentiate the parks from the competition.

© Canada's Wonderland

• There is still a chance that we could see Winterfest celebrations this year, but if so they will be at Knott's Berry Farm and Canada's Wonderland... if those parks are able to open.  Those are the two most profitable parks during winter so if they are able to open it sounds like Cedar Fair might jump at the chance to operate this winter.

• Operators are dedicated to keeping parks that couldn't open this year in the minds of visitors, including the use of social media and getting feedback on a variety of topics.  They want to continue to grow the consumer loyalty while they can't open.

Friday, August 7, 2020

Knoebels to Offer Joy Through The Grove Drive-Through Christmas Experience This Winter

© Knoebels

Knoebels has served up some nice news during this challenging summer - the park will host a new event this winter called Joy Through The Grove.  A drive-through Christmas light display, the new event will begin on November 27th.

These types of attractions are already popular in many towns, but the Knoebels version will take guests right through the center of the classic amusement park.  Joy Through The Grove will "begin near Impulse roller coaster, travel down the park’s main boulevard, and throughout much of the campground.  There will be over 15 miles of string lights, and over 400 light up pieces."

A lot of the details of the event are not yet finalized, but it sounds like it will be a great way to get to enjoy Knoebels during a festive time of the year.  

Right now the park plans to open the display nightly and its run will conclude the first week of January, 2021.  Keep a watch out on the park's official website for more details as they are decided.

Wednesday, August 5, 2020

Cedar Fair Updates on 2020 Operations + Looking Ahead at 2021

© Cedar Fair
Cedar Fair has given an update on their parks with regard to 2020 operations, clearing up which parks will remain open, which will close, and when the season will end for others.  The impact that COVID-19 has had on the industry is obvious, and the operator is having to make hard decisions on the rest of this year.

Of the seven parks that Cedar Fair has been able to reopen in 2020, 5 of them will close after Labor Day weekend on Monday September 7th.  That includes Worlds of Fun, Dorney Park, the two Schlitterbahn parks in Texas and Michigan's Adventure.  The remaining two, Cedar Point and Kings Islands, will continue to operate until November 1st.  They will not hold a traditional Halloween Haunt event, instead having a Tricks and Treats Fall Fest.  No parks will hold Winterfest this year.

At the same time of the announcement, Cedar Fair also clarified that Valleyfair, Kings Dominion, Carowinds, California's Great America and Gilroy Gardens (which they manage, not own) will not open in 2020.  The parks that will not open will give existing season passholders a Pass Perks Loyalty Reward to be used next year (sounds like more details to come on that one).

Canada's Wonderland is still in talks about possibly opening this year, so no final decision has been made there yet.  Knott's Berry Farm is opening again soon for a special food and retail event, and waiting on guidance for the future.

Each park has also posted an individual update, which has some more details worth sharing:

© Cedar Point

• Cedar Point's new Tricks and Treats Fall Fest will features special food tastings, special merchandise, family friendly activities and more - all based around the park's stringent COVID-19 safety measures.  The park is still planning on having their 150th celebration next year, with all the additions originally planned for 2020.

• Kings Island will also hold Tricks and Treats Fall Fest, and is expecting to bring back special events like Grand Carnivale in 2021.

• Valleyfair's update still lists the changes they prepared for 2020 such as restroom renovations, a new event space and Corn Feast, and also lists the Peanuts Celebration for 2021.  Gone are mentions of Grand Carnivale and Monster Jam Thunder Alley, which were to be new this year.

• Carowinds is listing Grand Carnivale as opening in 2021, along with their new Boogie Board Racer waterslide.  The park did not mention Carolina Summer Nights or Monster Jam Thunder Alley for 2021.

• California's Great America will open their newly renovated water park, South Bay Shores in 2021, but no longer mentions Monster Jam Thunder Alley.

• Worlds of Fun will open Riptide Raceway next year, but no longer makes mention of Grand Carnivale and Summer Nights as special events.

• Dorney Park did not get to open Seaside Splashworks in their water park this year, so it will debut next year.  No mention of the return of Grand Carnival or their Summer Nights promotion.

• Kings Dominon will open their new water park expansion, Coconut Shores, in 2021 and does mention Grand Carnivale returning as well.

• Last but not least, Knott's Berry Farm will not hold their popular Haunt event this year.  Their adjacent hotel will open toward the end of this month as well.

In summary it looks like as with Six Flags and SeaWorld Entertainment, 2020 attractions will become 2021 attractions across the board.  It's probably too early to tell if more special events could take place, as much of that is depending on the progression of the pandemic between now and then.

Sunday, August 2, 2020

Heard On... Six Flags Entertainment's 2nd Quarter 2020 Earnings Call

Six Flags Entertainment has released their 2nd quarter 2020 earnings, and as everyone expected they weren't good.  Here is the full press release detailing their numbers.  But that doesn't mean that all the news that they shared was bad.  As always, the company had their earnings call and here are some notes worth highlighting.

• Revenue in the quarter was $19 million, with attendance of 433,000 - both a decrease of 96% over 2019.  That led to a net loss in the quarter of $137 million, a decrease of $216 million over 2019.  EBITDA was a loss of $96 million, a decrease of $276 million from 2019. Guest spending was also down 15% over 2019 levels - but half of the attendance in this period came from the drive through safari at Great Adventure, which skewed things quite a bit.

© Six Flags
• Part of many companies survival these days depends on how much cash they have to spend each month.  Six Flags is proud to report that they have reduced their monthly cash spend to $25 million, down from the $30 to $35 million they estimated when the pandemic began.  Six Flags feels they have "adequate liquidity" to survive to the end of 2021 even if they have to close all the parks for some reason.

• Six Flags is currently testing a new virtual queue system that will allow visitors to reserve a spot on a ride from their phone, and not have to stand in a line.  This is a plus not only in terms of social distancing, but also to remove something that visitors always hated even during normal operations.  If the test is a success they will roll it out to all parks.

• When parks started to reopen they saw very strong demand for visits, however in recent days/weeks with COVID-19 cases increasing in many States they are starting to see softer demand.  The company expects to see daily attendance at 25-30% of previous levels for the "foreseeable future."  To further adapt, Six Flags has limited operating days and hours at its parks.

• The only international development that Six Flags still has on the books and earns revenue from is the park in Saudi Arabia. 

• Right now Six Flags has 14 of their 26 parks open.  Those 14 parks accounted for more than 50% of overall attendance in 2019.  In July those parks are seeing around 30% of 2019 daily attendance levels.  Parks in areas where COVID0-19 cases are not increasing are doing better than those where cases are high.  There is no way to know if they will be able to open any additional parks this year that are still closed.

• Some more details on attendance, in areas where the virus is not surging like New Jersey, they're seeing some days where they 45%+ of 2019 attendance levels.  They specifically mention Great Adventure and St. Louis.

© Six Flags
• The Active Pass hoder base was down 38% at the end of the quarter to 2.1 million people, they had 2.6 million at the end of calendar 2019.

• They have further reduced capital expenditure amounts for 2020 - they have pushed off or eliminated $50-$60 million of additions for this year so far.  They now expect to have 2020 capital expenditures come in between $80 and $90 million, $10 million lower than they first said.  Going forward they will be conservative with capital expenditures, adding only attractions with a "good return on investment."

• Six Flags has embarked on a mission to make themselves "a more agile, commercially driven and technology-savvy organization."  This will improve guest experience, help is growing the pass base and reduce operating costs.

• Changes include continuing to go after single-day visitors, redesign their websites to make them more user friendly, create better value in food and beverage offerings, restructure the company to make sure there are no duplicated efforts in the corporate office and at the parks but also reduce costs without reducing staffing.  They are also making a diversity and inclusion council within the company to guide things as training, addressing biases, building a diverse team and community outreach.

© Six Flags
• The company's COVID-19 changes are sitting very well with guests in regard to getting in the park quickly and easily.  They plan to keep many changes in the long run, such as advanced ticket sales and paying for parking ahead of time.  The reservation system is being monitored and it is not clear if they would keep it post-pandemic.

• Regarding Fright Fest and Holiday in the Park, both events are being planned but they are questioning best safety practices, how to make sure they are cash flow positive, and how to protect the Fright Fest image if they can't put on a traditional event... not to tarnish its reputation.  While they didn't go into details, social distancing does not work well with haunted houses, so things will have to be very different this Halloween.

Saturday, August 1, 2020

Elitch Gardens to Stay Closed in 2020 + Michigan's Adventure Update

© Elitch Gardens
Elitch Gardens has decided to keep the park closed for the 2020 season, it has announced.  Not an easy call to make, but with Colorado not providing an estimate for when they may be allowed to operate, too much of the year has already slipped away.

The park's full explanation of their decision is below, and I think you can tell from it that they feel pretty disappointed about how things have progressed in the state.

"Even though about 85% of the theme and water parks are open and operating safely around the U.S., and almost all other attractions in our Denver area community and throughout Colorado have been given permission to re-open, Elitch Gardens continues to be denied that opportunity.  We have held out hope for so long that our park would be treated fairly as we watched the Denver Zoo, Botanical Gardens, Aquarium, the Museum of Science & Nature open in various stages,  the casinos welcome back players, the ski resorts’ summertime attractions go into full swing, and even Red Rocks re-open this month for concerts. Park management has spent months consulting with industry experts and government officials to develop a comprehensive plan, including new sanitation and social distancing protocols, that would allow the Park to operate safely. We have also spent a considerable amount of resources training employees, inspecting rides, filling pools, and sprucing up the property, all in anticipation of opening day. Unfortunately, despite management’s substantial efforts, we have been unable to obtain government approval to open. As a result, Elitch Gardens will remain closed in 2020."

The park will transfer all guests who purchased a 2020 season pass into a new 2021 season pass VIP program.  Benefits include free admission, free parking, free souvenir cup with $0.99 refills, one free meal pass, one free skip the line pass, early ride times and plenty more.  The park estimates that their VIP program is worth $500 per pass.

© Michigan's Adventure
A curious thing happened at the end of this past week to Michigan's Adventure.  According to local news sources, the park was told they have to close once again due to an executive order from the State that calls for Michigan amusement and water parks to close.  The state is still mitigating COVID-19 cases and the order covers many outdoor recreational activities.

According to this article local health officials have confirmed that the park has to close, but there was a lot of confusion about the wording of the order and whether or not Michigan's Adventure, which is operating right now only as a water park, has to close.  There was another article that appears to make it perfectly clear that the park has to close again.

However, the amusement park posted on their social media yesterday evening that they will continue to be open throughout the month as scheduled, ending their season on September 7th. 

Either the park has some information that others do not, or perhaps they are digging their feet into the sand on the issue... not totally clear yet.  The park still has their hours listed on their website for the rest of the season.

Thursday, July 30, 2020

Busch Gardens Williamsburg to Reopen August 5th for Coasters and Craft Brews Event

© Busch Gardens Williamsurg
Busch Gardens Williamsburg has found a unique way to still open this summer while adhering to Virginia's order of only having 1,000 people at the park at any time.  Starting August 5th the park will be open to guests, but in a limited fashion to hold a new Coasters and Craft Brews event.

The park will feature the outdoor event in only some of the park's themed areas including Ireland, Scotland, France and New France.  Several of the park's large roller coasters, including Loch Ness Monster, Griffon, and InvadR will be open along with Le Catapult and Finnegan's Flyer.  The park will also offer a "variety of craft and local brews, savory BBQ cuisine, and more food and beverage options that will be available for purchase at select dining locations."  Several of the park's retail locations will also be open during the event.

It is almost like a combination of the special event that Knott's Berry Farm has found success with, only with a handful of rides open as well.

© Busch Gardens Williamsburg
Reservations will be required for the event and the park will follow all social distancing and sanitization efforts that other SeaWorld Parks have put into place.

The event starts on August 5th as a preview day for season members only, then it will run for two weeks Thursday through Sunday.  Thursday look to feature one reservation for a 5 pm to 9 pm slot, while Fridays through Sundays have two: 11 am to 3 pm and 5 pm until 9 pm.  With limited amounts of the park open it makes sense to get two different sets of guests into the park at different times of the day.

The park's calendar is showing plenty of operating days in September all the way through December, however it is unclear exactly how the park will operate at that time, or if it is even accurate. 

It is nice to see the park think outside the box in order to give visitors a fun experience that's within their limitations, hopefully it is a success for them.