Five TRENDS You Can’t Ignore: Mergers, Velvet Ropes, and the Rise of Festival-First Parks

0:01 From our studios in Los Angeles and Tampa. This is Green Tag to Theme Park and thirty. I'm Philip. I'm joined as always by my co host Scott Swinston of Scott Swinson Creative Development. On Green Tag, we break down the week's top news from the theme park world and explain why it matters to professionals. This week, though we're gonna be talking about trends, we're looking at the last eighteen months of what we have talked about on this show and trying to break up the top five ish trends that are critical for the industry. Here we are, Scott, we're recording this early. I was just gonna say, do we want to explain why we are doing Yes, Yes, trends and not about the immediate news of the week.

0:42 Yes, we're recording this early because I am at the Midwest Hunters Convention on a gig there. And so if we're going to talk about trends, but if there's some crazy news that has come out and you're wondering why we're not talking about it, that is why. And also if you're like, why is Philip and Scott look exactly like last week's uppisode, Well. It just changed my lighting. I changed lighting. It's we didn't even change clothes, and I have. Several shirts that look like this, but I'll be honest, this is the same one. Yes, we're going this early, It's okay. So basically what I did was I looked at the last eighteen months and I was trying to put them into big buckets, like what are the big things? What were we talking about last year at the beginning of last year, and then what are we talking about now and how has it changed and whatnot? And you know what, the biggest one we've talked about several weeks now, but it still continues to be a thing, which is at the acquisitions and merger because last year in twenty twenty four was when the six Flags one was first announced, right, and then it didn't It closed early twenty twenty five, so we've been talking about that. There's also the Hershein Family Entertainment acquisition, which we just talked about last episode of last week about that. So that those are two big ones, a merger and one's acquisition. But there's also the Falcons beyond Global that has required oceaneering. We talked about that a few episodes ago. And then I also put this and that sort of related. But it's like our WS Global is expanding, but they're also now entered into that exclusive partnership with Merlin to provide the entertainment for six

2:14 flagship resorts, which is consolidation in a way as well, where they're consolidating in order to serve a large entertainment. So that's a big trend. And it seems also what we talked about with the pendulum concept we always talk about, which is that these things go back and forth where it was a bunch of breakups and now it's going back to basically vying to be one of the top three or four. You're vying for the third or fourth position, is what everybody is doing, it seems. Well, or even the first and second in some cases. But when it comes to consolidation, yes, it's absolutely the third and fourth. And you know it's interesting because I will make a prediction. I'm going to put on my hold on. Wait, I have a crystal ball here. Wait, looking into the crystal bawl. My crystal ball is solid black, by the way, because just because I'm look, I'm wicked and evil. I'm wicked and evil, but I'm going to look into my obsidian ball and I'm going to say that we have not seen the last consolidation announcement. I think this is a trend that's going to continue for a little while. And you're going to say, oh, my gosh, Scott, who could possibly consolidate more and who could buy whom and what merger could happen. But I think this is one of those situations where we're far enough out of the pandemic that people are starting to go, well, you know what, here we kind of had to go back during the pandemic and reevaluate everything we're doing in our company, and we could do that more efficiently if we had an economy of scale. And I think that's what has

3:48 on a very simplistic way, you know. Mean, I always like to make things. I always like to dumb them down so I can understand them. So I think on the simplest possible terms, that is what has has inspired some of these mergers and acquisitions. You know, there are people who are who will argue that, no, it's just all about money, and I'm not going to deny that it is. It is about money. This is a business. This is not a hobby. So yeah, it's about money, and there's nothing wrong with that. What I am also going to say is the reason it's all happening now is because there's been enough time to kind of reevaluate and just like we've all done personally to reevaluate how much we work, how much we work from home, how much we work from an office, how much you know, what is our work life balance, blah blah blah blah blah blah blah, How can we make our lives simpler blah blah blah blah blah blah blah, all this post pandemic stuff that we've been anngst that we've been going through, and I think companies have been doing the same thing.

4:41 I think that's why we're seeing things like all of these mergers and acquisitions. It's like, how can we do our how can we do what we do but do it more efficiently? Yep, yep. That's just kind of my my thirty thousand foot view on why trend is happening. And like I said, I would venture to say there's and I have no insider information, this is not insider trading. This I don't know, but I would venture to say that it ain't over yet, and it's probably gonna happen on a smaller scale because we've already seen you know, the the six flag seater fairwe was the one that I did not expect. But I'm glad. I'm kind of glad. And you know, we'll we're gonna talk a little bit and Unhinged about a dig a little bit deeper into you know, whether this is a good move or not. But and the only reason, I will tell you, the only reason we're moving it to Unhinge. This is not a bait and switch to get you to join our Patreon. The only reason we're going to do it there is because we can be a little bit more. We can take the gloves off a little bit more, and we can shoot from the hip a little bit more. Uh So, it's it's it's not it's not to say, yeah, we're gonna talk about this here and then then when we get into the good stuff, you gotta pay for it. We're not I'm not saying that at all. What I'm saying is because because there is a another level and people will understand that we can be a bit more. Frank, That's that's the only reason that's the only reason.

6:12 Well, we've talked so much about this past several weeks. I didn't want to spend too long on this one because it's like we've been doing nothing but talking about because it's the most immediate thing, you know. But well, and it's been it's been like boom, boom boom. They're kind of like, you know, six Flags and hershand and and Falcons. It's just been like, yeah, recently, it's all been very recent. So the next one, I'm going to kind of label this like loosely as increasing per cap slash like premium offerings. We've been talking about this the past yeah again, in the past eighteen months, it just seems like we're getting more and more of these examples. And we talked about the concept of budget, family friendly pricing and that kind of stuff that's come value pricing basically that has come come much more recently. But even with this value positioning that a lot of places they're taking, they're still not neglecting to flesh out their premium offerings. And we've Scott calls it the velvet rope concept. I mean, this has been going on for a long time, but I think more recently it's become a lot more developed. And you know some of the recent examples we talked about which I even forgot about, but remember the Disland Resort four hundred dollars premium pass. That's a thing that's still a thing, and it's it's a thing at both parks. I mean, the four hundred dollars of fast pass, you know, just that.

7:31 Remember all it is is, it's just where you can use the fast pass. You get one fast passed per ride, and you can use it at any time for any of the rides. And it's a four hundred dollars on top of your ticket price, you know. And and then plus the Genie Plus and the Lightning Lane and the Priority Lane program they're rolling out all over and you know, Merlin talked about this when we were at Ayapa and then kind of talked about the idea of missing the pricing curve and they should adopt dynamic pricing and also and also have the premium more premium robust offerings. Six Flags mentioned it recently in their investor day thing where they deliberately have to renovate their F and B because they need to be able to have more premium offerings for that I mean concerts, other venue. I mean it's everywhere, It's everywhere. Basically, the idea is that especially in America, because we have this bifurcating, you know, we have the top you know nine, the top five percent controlling controlling a significant amount of wealth almost equaling what the bottom ninety five does. Then you have this bifurcation, so you kind of need to be able to have the premium experience but also still have you know, the budget items so well.

8:45 And let's let's not forget you know, six Flags now that they are expanding. I just went to the six Flags Great America website and one of the add ons is the twenty twenty five National Ultimate All Season the Flash Pass add on, so you can basically, the flash Pass is an admission pass with all park passport to enjoy immediate access to the priority boarding lane on your on the most popular rides every time you visit of participating six Flags park across the country. So this is in essence, this is a fast pass for all six flagsparks.

9:26 It is a fast pass for all six flagsparks. You want to guess, you want to guess what the monthly fee is for this add on to your season pass. Now you have to have a season pass to one of the. Parks to add you're adding this on. You're adding us onto a season pass. One one hundred and twenty five a month, extra. One hundred and sixty two one hundred and sixty two a month, and that gets you Lightning Lane pass at all parks. And it says let me there's there's a couple of asterisks here. It says for five months with an initial payment due today, plus applicable taxes and fees. So uh, and then it's just click product for full deal details. They're also doing add on. You can also do add on all day dining passes. You can do add on picture passes. And this is six Flags. This isn't Disney Kids, this is six Flags. So you can get your seasonal drink bottle. You can do that when you purchase your pass. So for thirty five dollars you can get an all seasoned souvenir bottle in you enjoy Coca Cola Fountain beverages and get free refills during the twenty twenty five season when you visit the park, only a fifteen minute interval between refills.

10:35 There's I think The reason this is such an interesting trend is because when you look at I think a macro sense, we started off where I don't want to go back to back in the day, you know, I mean you have a Disney fad day, you know, where you didn't have fast passes. You just it was the concept of all the guests were kind of treated equal in a way. And now basically what we're doing is creating a class system within the attractions that we go into, where you there's always another level that you can buy into. You know, you got I think Disney is definitely the worst, but you know, you have even even like I have the top pass at Disneyland, right, and then beyond that you can do the plaid packages, right, and then beyond the plaid you can do the Club thirty three, which is I think thirty thousand a year or something. I mean, so like you can keep plusing until you get concierge like White Glove. And it's just this has been spreading to more and more and more attractions, and not just the theme parks, but also the individual smaller attractions, you know, and even in Asia where it's you know, it's I think it starts here in America and then it jumps over and I saw it even I think I was last Halloween. Remember when I talked about the package. I think one of the the parks that was like two thousand dollars for like a Halloween experience. I'm like, it's it's like, it's crazy. But I considered it and then I slapped myself.

11:56 We've talked about it. I mean, you know, we experimented with it even you know, what was it fifteen years ago at at Bush Gardens. You know, we we were we were like what what we had it? We had a concept. It didn't fly. We never did it, but we had a concept. You'd be picked up in a hearse at your home. You would you know, be you. You'd lounge in the back of the hearse until you got to the to the park. You'd have you'd have a separate entrance. You wouldn't go through even the parking lot. You'd go into a back area entrance. It was yeah, we we went. Well, that's the thing in the in the the Middle East. You've worked at a lot of places where they do have those v VIP. Oh yeah, yeah, Well, I mean, you know, in the Middle East, in the Middle East does VIP really well because they have a royal family. So you know, when you when you fly, when you when you fly out of Abu Dhabi, for example, there's a separate airport for the royal family. It's you know, it's it's mind boggling.

12:50 But but again, these kinds of velvet rope experiences. Everybody looked at Vegas and went, hey, if Vegas can do it, why can't we Yep, Well, the reason Vega's what Vegas did it is so that they could comp their their high rollers. But then they discovered people actually pay for this. You would pay for it. Yeah, I guess I think it also reflects not just the whole concept of classism, but it also reflects like the idea that like, you have people that can afford this now, whereas like I think in the past, you had just a more robust middle class, you had more equal kind of income systems right where people had they were their lives were closer, right, But now you have like so many people in America that I lose their healthcare account afford xyz. You know you have down here, so they're really like the budgets are really really, really really thin. Then you have you know, the largest growing demographic in America is millionaires, and so then you have billionaires. So you have this weird thing where you have very very very budget conscious people again back to the six flags investor day, eight dollars per hour type of value proposition they're proposing. But then you also have the millionaire class and above millionaires and above, So you're wondering, like, what do you provide if you're going to try and tap into that, what do you provide to them to encourage them to come to the park.

14:08 And you're like, well, if you have a separate entrance and you have you don't have to interact with the peasants and you can do whatever you want, you know, I mean, that's that's but again it's that idea of the class effectively, you know, a class system in the parks, but also indicative of a larger economic trends. And I also think that in addition to the economic trends, because I agree with you one hundred percent, Philip, in addition to that, I think what is what has value to people has also shifted. I think that instead of we're going to sell you we made five of these diamond encrusted Disney castles. Instead of doing that, they want to sell you higher experiences. I think the more and more people are Disney's a strange anomaly because they you know, they sell popcorn buckets that go, you know, quadruple in price by the time you get home and put them up on eBay. But but, but, but I think people the experience of it is is really what they want to buy.

15:06 And I think quite honestly, the popcorn bucket phenomenon that's going on with Disney, I think it's the experience of getting there, getting in line, waiting for it, being having that sense of am I going to get it? Am I going to get it? Oh? I got one? Yeah, I got one, I got two. Great, I can sell one and pay for this one and my part ticket. You know, it's there's that there is a an interactive quality to that, there is an experiential quality to that, and I and I think that that is what has really kind of put a shot in the arm for these for these various levels of increasing. The one thing I do want to talk about, just because we mentioned this before we started recording one of our shows, the term per cap. So the term per cap apparently means different things to different people. Yeah, and and and I mean basically, per cap obviously stands for per capita, and it's it's the amount you make per guest who comes to the park or attraction. I understand that completely. What's interesting to me is we often as operators, we're less concerned about the either the overall per cap or the ticketing per cap the gate admission per cap than we were the in park spend per cap. Now it makes total sense that if you're an investor or an owner, you're far more interested in the overall per cap.

16:29 How much money are we making from each click of that turnstyle. I get that, But I just want to make sure that when we're talking about when we're talking about high end per cap, what we're really talking about or increasing per cap, we're increasing per cap by in park spend or by elevating the experience add on add on experiences. We're not increasing per cap by increasing the park entrance fee, which I think is a really important quality or a really important thing to talk about, because we don't it allows everybody to have the opportunity to experience your park correct experience in a different way. Well, yeah, that's a great segue into the next one. Here, the next big trend, which I've loosely labeled festivals to drive loyalty. It's kind of how I've kind of loosely labeled it, and I think it was on my mind directly because it was brought up so often in the six Flags call about there, and that's exactly what they're talking about. In the six Flags call was basically saying they really need to double down on attendance, but more specifically about taking the converting attendance to season pass and encouraging the season pass eble to return. And the way they would do that is through guest experience but also seasons of fun, which is their festival model, and they were talking about how that would that would in a way decrease per cap spending because they're you know, the investors and Wall Street look at at based off of

18:00 just your gait, like how many clicks and then how much is ticket price because there again there's a more basic metric of measurement than I think we would look at as industry professionals, where it's total you know, total attendance and total get spend. But they basically the overarching thing here is the concept of increasing the festivals, which is interesting because again this is another one of those weird like I think massive macro pendulum back and forth, and we've talked about on the show. It's the concept of like, are you gonna put in a new roller coaster that takes time and effort and it's it's a longer lead time. And again they talked about this on Six Flags. They talked about how the expenses were growing so that where they would have done five, now they're only going to do four because that's the amount of expense, you know, inflation that's come into that. And so but overall we look at it where we're like, okay, it's kind of like you balance these two things. You balance putting in a new attraction with then balancing live and teament and festivals and shoulder fill in and that kind of thing. And it seems like now we've swung the other way where now we're back to putting in all these festivals and all this stuff. And the labor the labor market has helped recently, the recent recent recent labor market I think has helped. But when you look at these festivals and this stuff, so the Disneyland shows the disneland seventieth you know, all that, all this stuff is part of that. But then you look at gosh like FanFest Nights, the Universal Hollywood butter Beer season, back to Hogwarts,

19:32 Halloween Horror Nights last year, Jollywood Knights coming back again for the second year, Mickey's Very Merry Christmas Party, Nicky's Not So Scary Halloween Party, which we didn't talk about on this show yet, but they've already sold out several nights for this year, and that's a massive party. A Gibboogie Bash is coming back, the Coasters after Dark thing, which we talked about last year, which we barely talked you know, all for out about that, the DC Universe of Light walked through, which is the Gaylord, the summer version of their ice, you know, experience the flavors of the world at six Flags, Scream Break, you know, Dark Knights at Hershey Park. It's like, I mean it is, the festivals are just growing like massively. I think this is the overarching large strategy, right, is that as capital becomes harder to deploy for those long term investments, you need to shift to lower assets stuff, which is the seasonal overlays and is staffing becomes easier, that becomes easier to do because these are over really aligned on live entertainment, and so then you get this explosion of all of these things and they're what they're trying to do then is drive repeat visitation, which increases per cap based off the total park spend. Right, really complicated.

20:46 That was very cool, but again you explained it very well, Philip, Thank you very much. Thank you. I love the fact that you said it's a pendulum because there was a time where they felt that festivals were too risky because you had to invest so much time for it into something that does not produce a hard asset, so. Crazy, and now we're like, how why would we? Why would we? Well, because again we've shifted from and who knows, we will probably shift back, but we've shifted from the mentality of we're buying something. It's the difference. It's a difference between buying a car and using an uber. You get to work the same way. It just depends on what you want to do. Do you want the pride of ownership, the convenience of knowing that your car is always going to be sitting in your parking lot or in your parking lot or your garage do you?

21:33 But do you also as a trade off, want to have all of the frustrations of making sure that you do your oil changes on time and if something goes wrong with the car, it's up to you to fix it. Or do you just want to pick up your phone put in a bit of information. Actually, if you're going to work, just hit work and Uber comes, picks you up, drops you off. Done. So it's do you want to accomplish the goal or do you want to own something? And it's it's interesting because the pendulum has so swung back. My running joke used to be back in the bush gardens days, I used to say, well, we could either do a brand new roller coaster which will amortize itself as far as a bumping in attendance for anywhere from three to on the outside five years, we'll see it'll you know, it'll have a bell, it'll have a sharp decline.

22:21 Or we could do hollow scream for thirty years. Yeah, that's the that's the trade off. And I think finally people are starting to recognize that that these pop ups, you know, and I think also the consumer has changed. They don't want as much yes, there's still a place for the Haunted Mansion. In my heart, I want to go back and experience the Haunted Mansion because it is an icon at Disney. But most people want to know if I'm going to go to a park more than once, I got to have a reason. Yeah, Oh I really like this park. It's I like this park, but I'm going now because you know, we used to say at bush Gardens here in Tampa, people would say, oh, yeah, I love bush Gardens. When was the last time you were there? Gosh, I don't remember. So how do you know you love bush Gardens? And why have you've been? Well, it's always going to be there.

23:12 Yeah. So to create these to create these festivals, these pop ups, these seasonal events, I will tell you right now, and I don't think I'm gonna get in trouble for sharing this information. One of the most requested topics for edge A sessions for Ayappa at at in Orlando. I don't know whether it's two in the other ones, but is seasonal festivals and Halloween specifically, simply because people want to know that. The people who haven't gotten on the bandwagon yet, or even the people who have want to know either how can we do this or how can we do it better? Because again, you're basically doubling your gate if you're doing a second gate experience. You've heard me use the phrase way too many times that Halloween became thirteenth month.

24:01 And those of you who are operators, you recognize that these kinds of seasonal festivals not only developed, not only not only give you significantly more revenue and profit, but also the real reason is it makes it so that you build brand loyalty. You get people to come back to your park multiple times per year. If you don't do seasonal festivals, people will come to your park once a year. Yep, and that's it. Yep, yep. And interesting. I keep going back to this because I spent so long reviewing the six Flags investment Day thing, but now they're all like stuck in my brain. But I remember they actually did talk about the differences between these two on the call, and basically they said that opening a new coaster will only give a twenty percent lift for roughly a year and then but then obviously the Scott's point, it's an asset. But basically they're like, you need a balance between the seasons of fun investment and the FMB investment and the major capital investment because they all kind of have to balance each other out.

25:04 And I'm like, yes, exactly. Asset. Well, everything that's an asset is also a liability yep. So yeah, so speaking of maybe liabilities, I don't know. Staffing. That's a really weird transition, Philip, But shall we Yeah, So staffing is the next trend. And remember last year we were talking about how tight staffing is, and there's all sorts of drama. Last year, the j one visus came under scrutiny. Last year, there are sixteen states that loosened their team work rules. Thirty three percent of operators called staffing critical in iopa's research from last year in their twenty twenty four research. And then last holiday season, events nationwide suffered from staffing, especially during Halloween. If I remember back to like the Six Flags where they like couldn't open their heart houses and a bunch of locations up to weeks after the start date for that, I mean, it was it was nuts, Like all that was like bananas and all that. And then you know, then of course RWs coming in and taking over all of the all of the Merlin attractions to provide entertainment for them. I don't know. Again, still not sure why they think they can do it better than anyway. But all that is aside. But then then we talked about the whole housing element and how people were trying to work housing into it. You know, Universal Orlando announcing a thousand units they were building at Disney, almost fifteen hundred units for workhouse complexes, Holiday World opening the Compass Commons dorms for seasonal hires. I mean, there

26:34 was a big thing. And then most recently we've heard a lot of chatter about AI solutions that basically can analyze and in real time move around your staffing so they can just deploy people the cashier thing right where you know, this F and B area's not in high demand, so you can immediately deploy. And that's becoming, you know, much more of an industry wide thing, but also much more accurate. That's helping staffing. But so now what we're seeing is a staffing cool down right again, as the economy, you know, I'm not saying it's a very session I'm just saying the economy cooling and whatnot, and unemployment is ticking up. Then you're having those staffing pressures ease for parks, which is going to in theory, help seasonal staffing for this upcoming fall and Christmas break. And then you add AI to that and hopefully it'll it'll make staffing a lot easier, which again what we talked about earlier feeds into them being able to provide more season seasonal entertainment to drive repeat visitation.

27:35 Well, and I think that you know, this is I still think and people are going to argue with me. I still think this is normalization. I still think this is post pandemic normalization. What's happened is people after during the pandemic realized, you know what, I don't want to work. I really just don't want to work. I don't want to work, and I can survive without working as hard or without working as much. And that trend has shifted now. So everything's expensive, because everything's expensive, and all of a sudden, you can't just get by on on you know what, you what you make off of selling your your hand crocheted bracelets on eBay or Etsy. You have to actually now have a bit more income. And I think that that's why the staffing situation is coming back. And like I said, in my view, it's normalization. And everybody's gonna say, Scott's you got to stop blaming. You got to stop blaming the pandemic for everything. I said, I'm and the truth is, I'm not. I'm saying that we are finally coming back to it. I mean, the pandemic was in essence two years. I know people will argue that back and forth as well, but it basically impacted us for two years, and it's it takes time to come back from something like that. You know, you don't recover like a speedboat. You recover like an aircraft carrier. So it's got you get you turn slowly, and I think this is just finally coming back from that. That's my that's my opinion. I don't know whether it's right or not, but that's that's my perspective and my opinion on that situation.

28:58 Yeah, just to add one note on that too. Even looking back at airline stuff right like that still hasn't figured itself out. I mean, like you like looking at the number of pilots and then you know, now we're short of having a shortage of air traffic controllers and there's still shortages and now now the plane is now they're. But that's not because if people don't want to work, that's a different story. Well, it goes back to the idea of it takes time to train and so you can't shift it. Even one or two years is too short of a time, you know, And so they laid off so many people. We're still struggling for shortages. But now they're reducing flight schedules again, like we talked about the shift in travel patterns that we talked about previous shows, so they're reducing flight schedules. I mean, it's like the tourism sectors pretty impacted much more, much more overtly, I think, by some of the pandemic trends again because you know, we're people have to gather, they have to get to the thing to enjoy the experience, so it's directly impacted. But we're going to continue this discussion on trends in our Patreon episode.

30:01 You had to put that little plug in there. But for the rest of you, this is this is the end of this week. Once again, I just want to remind you we did record this early, so if there's any giant, huge news, we will get to it. Don't panic. But It's just that Philip's going to be at Midwest Hunters Convention and so got to He's got to be there, and I'm going to be sitting around the pool drinking mohitos. I don't know, but anyway, thank you so much for listening. We really do appreciate it. On behalf of Philip, Hernandez and myself Scott Swinson. This is Green Tag Theme Park in thirty and guess what We'll see you next week