Cedar Fair Corporate Development Discussion Thread (FUN)

P. 161: 2Q 2019 Quarterly Report (Doing well 2Q)
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Mrlittle » Mon Jul 08, 2019 8:26 am

Houston Thrills wrote:
larrygator wrote:I know it is unlikely to happen, but if Cedar Fair could obtain the rights to manage Moody Gardens (in Galveston) under a similar set-up as Gilroy Gardens that would make for a nice foothold in the area. It might not significantly increase attendance at either but could drive people to purchase season passes.


It'd probably be a good idea not to get any more involved in Galveston than they already are, things are a bit shady out there.


What are you talking about? Galveston is a great city. Every city has its areas that aren’t the nicest but Galveston has really cleaned up a lot over the years. Two things have helped the city: charging for parking on the sea wall and the last hurricane destroyed some of the older buildings that needed to go.

I like the idea of Cedar Fair taking over Moody Gardens. They own a lot of land next to Schlitterbahn Galveston that could be developed. I always thought it was odd they built Schlitterbahn so close to Moody gardens since they also have a (small) water park.
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Intamin_coyote » Wed Jul 10, 2019 7:28 pm

Net revenue is up (so far), thanks to higher per capita spending, both in and out of park, albeit flat attendance...

https://www.businesswire.com/news/home/20190710005143/en/Cedar-Fair-Reports-3-Incr

Cedar Fair Reports 3% Increase in Net Revenues Through the July 4th Holiday Weekend

Investments in broadening the guest experience support strong underlying consumer demand

July 10, 2019 06:00 AM Eastern Daylight Time
SANDUSKY, Ohio--(BUSINESS WIRE)--Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today reported preliminary net revenues through July 7, 2019, of approximately $579 million, an increase of $16 million, or 3%, when compared with the same fiscal period a year ago. This period traditionally represents approximately 40% of the Company’s full-year net revenues.

The increase in net revenues was driven by a 3% increase in in-park guest per capita spending, a 3% or $2 million increase in out-of-park revenues, including resort hotels, and flat attendance, compared to the same prior-year period These favorable results benefitted from only one week of operations from the newly acquired Schlitterbahn water parks in New Braunfels and Galveston, Texas.

“Our commitment to enhancing and broadening the guest experience has led to strong underlying consumer demand when weather conditions are favorable, a positive and welcome indicator as we approach the busiest and most profitable stretch of the season,” said Richard A. Zimmerman, president and chief executive officer. “Our strategy heading into this year was to provide highly immersive experiences which would encourage our guests to visit early and visit often. This included the addition of traditional attractions such as two record-setting roller coasters at Canada’s Wonderland and Carowinds, and the introduction of new immersive attractions such as Forbidden Frontier on Adventure Island at Cedar Point, Monster Jam® Thunder AlleyTM and Grand Carnivale.”

Zimmerman reported that Cedar Fair has generated record season pass sales across its parks, as well as record sales of its all-season dining and all-season beverage programs. He also noted that booking trends on group events and at the Company’s resort properties remain strong, reflecting the success of investments made in both areas over the past several years.

“In addition to the strength around advance purchase commitments, we’re pleased with the growth of in-park guest per capita where we are seeing year-over-year increases in spending on admissions, food and beverage, merchandise and extra-charge attractions,” added Zimmerman. “The growth in both advance purchase commitments and guest spending gives us confidence our consumer is healthy, and that our new initiatives and guest services levels are resonating well with guests.”

Commenting on the impact of weather on operations over the first half of the year, Zimmerman added, “Much like the first half of 2018, extreme weather conditions through early June, including record rainfall in many of our key markets, adversely impacted attendance in many of our parks’ first full month of operations. As conditions improved, however, we have seen a significant improvement in attendance trends, which is more illustrative of the record results we generated over the last five months of 2018. For the three-week period ended July 7, 2019, same-park attendance was up 6%, or more than 200,000 visits, versus the comparable three-week period a year ago. While encouraged by the strength in recent attendance trends, we remain focused on executing against the strategic initiatives we have in place, as these short-period results by themselves may not be indicative of performance over the balance of the year.”

Looking ahead, Zimmerman added, “We believe the positive guest response to our broad array of attractions and immersive events, as emphasized by this year’s high guest satisfaction ratings, combined with the strong growth in our advance purchase commitment channels, has us well positioned as we head into the second half of the year. In addition, we are very excited about the attractive upside potential presented by our recent acquisitions of the two iconic Schlitterbahn water parks in Texas and the Sawmill Creek Resort near Cedar Point in Sandusky, Ohio. While their contributions to our 2019 operating results will be modest given the timing of the acquisitions, both transactions underscore our commitment to driving long-term growth in the business.”

The Company will provide additional information regarding net revenues, operating costs and cash flows when it announces its second-quarter results on Wednesday, August 7, 2019.
Last edited by Intamin_coyote on Sat Jul 13, 2019 10:17 am.
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Jew » Wed Jul 10, 2019 8:28 pm

The increase in net revenues was driven by a 3% increase in in-park guest per capita spending, a 3% or $2 million [twitter][/twitter]increase in out-of-park revenues, including resort hotels, and flat attendance, compared to the same prior-year period


In case you guys were wondering if Disney is freaking out about what appears to be lower attendance post Star Wars...here is your answer why they are probably not freaking out too much. Creating revenue inside (and outside if you own hotels) is what matters most. Ticket revenue isn't really a profit driver except for premium products like front of line and VIP tours.

10 years ago Cedar Fair was WAY behind on this, now they appear to have caught up!
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby DirkFunk » Thu Jul 11, 2019 6:26 am

Jew wrote:
The increase in net revenues was driven by a 3% increase in in-park guest per capita spending, a 3% or $2 million [twitter][/twitter]increase in out-of-park revenues, including resort hotels, and flat attendance, compared to the same prior-year period


In case you guys were wondering if Disney is freaking out about what appears to be lower attendance post Star Wars...here is your answer why they are probably not freaking out too much. Creating revenue inside (and outside if you own hotels) is what matters most. Ticket revenue isn't really a profit driver except for premium products like front of line and VIP tours.

10 years ago Cedar Fair was WAY behind on this, now they appear to have caught up!


1) Cedar Fair's share price is down from 72.10 in July 2017 to $48.56 today. Clearly Wall Street isn't nearly as impressed with the "replacement" in net revenue.

2) Disney only has three hotels in California. Their primary guest base are passholders, most of whom are blacked out of the park and not attending. I don't know what the occupancy rate is at Disney's hotels, but most classes of room are available this weekend when I search (suggesting it isn't in the 90s percentage wise). I wouldn't classify Disney as "panicking" but clearly they're throwing money at stuff or having discounts to try and get people to go now.

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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Intamin_coyote » Thu Jul 11, 2019 12:36 pm

DirkFunk wrote:1) Cedar Fair's share price is down from 72.10 in July 2017 to $48.56 today. Clearly Wall Street isn't nearly as impressed with the "replacement" in net revenue.


To be fair, it jumped $1.54 per share today (to $50.10 atm), most likely in light of the recent good news.
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Jew » Thu Jul 11, 2019 2:25 pm

2) Disney only has three hotels in California. Their primary guest base are passholders, most of whom are blacked out of the park and not attending. I don't know what the occupancy rate is at Disney's hotels, but most classes of room are available this weekend when I search (suggesting it isn't in the 90s percentage wise). I wouldn't classify Disney as "panicking" but clearly they're throwing money at stuff or having discounts to try and get people to go now.


Their primary base is passholders on cheap passes whom I would guess for the most part just come to the park to hang out and don't spend that much money. As long as they have a store (Savi's Workshop) generating $3,000 in revenue every 30 minutes, I'm guessing the TDA suits aren't freaking out TOO much. It's obvious they aren't hitting their attendance goals, but I would guess they are fine from a revenue standpoint. The cheapest hotel for next Saturday is Paradise Pier @ $412/night. If they were truly hurting, I would guess the rates would be far lower than that...

But anyways, back to the topic. Attendance, IMO, is a lazy way to look at results. Parks can easily inflate that number through promotions and comps. How much a guest spends in total is what matters most.
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby DirkFunk » Thu Jul 11, 2019 2:51 pm

Jew wrote:
Their primary base is passholders on cheap passes whom I would guess for the most part just come to the park to hang out and don't spend that much money. As long as they have a store (Savi's Workshop) generating $3,000 in revenue every 30 minutes, I'm guessing the TDA suits aren't freaking out TOO much. It's obvious they aren't hitting their attendance goals, but I would guess they are fine from a revenue standpoint. The cheapest hotel for next Saturday is Paradise Pier @ $412/night. If they were truly hurting, I would guess the rates would be far lower than that...


My point is that even they have to care about attendance targets. They're a publicly traded company. There's no long term gain from this drop of attendance to spin to shareholders. And we're seeing them throwing together parades and hustling Soarin Over California back into service as part of that service.

But anyways, back to the topic. Attendance, IMO, is a lazy way to look at results. Parks can easily inflate that number through promotions and comps. How much a guest spends in total is what matters most.


The relevance here is that of course Cedar Fair's revenue, much like Six Flags, is heavily dependent on very cheap season passholder return visitation over the often vaunted/desired high per cap spending.

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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby Jew » Thu Jul 11, 2019 3:12 pm

My point is that even they have to care about attendance targets. They're a publicly traded company. There's no long term gain from this drop of attendance to spin to shareholders. And we're seeing them throwing together parades and hustling Soarin Over California back into service as part of that service.


Of course they do. I'm not suggesting otherwise. I'm just saying a healthy theme park business is not based solely on attendance. I am sure that Disneyland has to be experiencing the highest per cap spending in the history of the park and I would also guess that their guest satisfaction is pretty high as well. Would not be surprised at all in the next Disney earnings call to hear theme park revenue is through the roof.


The relevance here is that of course Cedar Fair's revenue, much like Six Flags, is heavily dependent on very cheap season passholder return visitation over the often vaunted/desired high per cap spending.


Well clearly Cedar Fair has figured something out if they have squeezed 3% more money out of the same amount of guests. They need those cheap season pass holders spending money too, or otherwise the quarterly release would probably say "attendance up, revenue down."

Obviously more people=more chances to make extra money, so people look at attendance as a "holy grail" for theme parks. But high attendance without high per cap spending can be awful for a park, since in theory you still have to staff the park to the higher attendance level without the cash those people should be bringing in...
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby larrygator » Thu Jul 11, 2019 7:53 pm

DirkFunk wrote:The relevance here is that of course Cedar Fair's revenue, much like Six Flags, is heavily dependent on very cheap season passholder return visitation over the often vaunted/desired high per cap spending.


To Cedar Fair's credit, they made the difficult decision years ago to double the price of those cheap season passes if you want to use them at all parks.

The 48% loss of share price over two years in troubling, but that followed a 800% return of the prior 8 years of great growth. The stock price fluctuates over time and stand about where is did 5 years ago but there is additional value in the $3.70 per share dividend.
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Re: Cedar Fair Corporate Development Discussion Thread (FUN)

Postby DirkFunk » Fri Jul 12, 2019 4:59 am

larrygator wrote:
DirkFunk wrote:The relevance here is that of course Cedar Fair's revenue, much like Six Flags, is heavily dependent on very cheap season passholder return visitation over the often vaunted/desired high per cap spending.


To Cedar Fair's credit, they made the difficult decision years ago to double the price of those cheap season passes if you want to use them at all parks.


Both chains have premium pass products now that are multiples that of the base pass most people likely buy. I don't know that I necessarily "credit" Cedar Fair for that decision given that it seems to exist solely to prevent Kings Island or Michigan's Adventure season pass holders from not paying for entry to Cedar Point (a park that saw an attendance decline last year in spite of building Steel Vengeance). If you ascribe to the idea that attendance is secondary to in park spending because you can't have them spend unless they come in the park first, then you're already behind the 8 ball with this.

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