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Oh my goodness.
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From our studios this week in Los Angeles and Port
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and Ventura in Spain. This is green Tag Theme Park
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and thirty. I'm Philip. I'm joined by Scott Swinson, a
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Scott Swinson creat development. On green Tag, we look at
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the top theme park news each week and explain why
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it matters to business professionals. And this week we're going
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to start with six Flags news, but then discuss a
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little bit of the on location reporting from Scott, who
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is at Ayapa Europe at Port Adventura.
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Yep, I'm here for the IAP stuff, the IAP training,
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and then tomorrow will do a an Edge of tour
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and then I'll head then we head back to Barcelona
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to do the actual expo itself, where I'll be doing
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another session and get a chance to walk the floor
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so for at least for part of the day. So,
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but let's let's talk about six Flags because I think
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this is a very interesting story. Don't panic. I'll talk
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a little bit about here too because I think it's
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really cool.
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Yes, So we're going to start off this week with
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a little bit of news that came out from six Flags.
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Everyone has been reporting on and basically it's said the
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attendance is up. So Six Flags attendance increased three percent
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compared to last year. Following the bad previous earnings college
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we talked about, they attributed some of their previous decline
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to bad weather and presumably that has you know, passed
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a little bit. They said that season passed sales for
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twenty twenty six are strong and they have refirmed their
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full year EBITA. Now here's the thing buried in all
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of this. If you actually read the full disclosure, you'll
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see that attendance is up, yes, but revenue is down
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because people are paying less per ticket. So basically management
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is arguing that they traded some short term ticket pricing
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power for long term volume and passholder growth. And that's
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what they're really trying to do, is they're just trying
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to cheap. They're basically reducing the price the ticket, cheap
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in the price of ticket to get more passholder growth,
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and then they're saying that that's going to be more
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long term because they're hoping these guests will spend more
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over time. So the argument then, of course only works
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if the quality is maintained, because otherwise the past holders
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aren't going to come back. Enough to offset this this
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pricing degradation. Right, that's that's me. Sorry, that's that's my
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interpretation of it. So it's admissions per cap fell about
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seven percent, like, so that that's a chunk that it's
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fell due to the discounts and promotions. For that, the
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mix also mattered, so there's more lower spending customers. So
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it's skewing prices downwards. So I guess it's not all bad.
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I think there are some things to consider, right. It's like,
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I think all of this hinges on the quality. And
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every time we've talked and I'm just going to say,
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every time we talked about six Flags, everybody in the
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Commons has said the quality is terrible. I haven't found
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anybody who has said the quality has maintained. But we
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don't have the guest satisfaction survey data with us.
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Right, so maybe they don't.
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Maybe you know, the guests are okay, they don't care,
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or potentially they're attracting new or more price sensitive demographics,
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you know, like they're bringing in people who never would
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have paid full price and so they care less about
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the quality. Right by that thing, So there's increasing that
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and you know, we still don't know right how the
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pass at engagement is going to go over time, So
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I guess there's still a chance for the strategy to work.
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I guess I'm just saying. I'm just saying that I'm
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not even sure what we would look at to watch
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the indicators. One indicator we might look at is Halloween,
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and as we reported last week, they're removed all of
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the Wednesday dates from Not Scary Farm before opening and
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had to rebook people they weren't offering refunds, which I
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thought was weird, and then they had to also they
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removed all the Thursday nights from Right Fast at six
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Flags Magic Mountain, and then they also just announced this
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week that Sesame Place is closing already.
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Today's the last day they're going to.
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Be open for the season, which means they're not doing
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Halloween of Christmas, which means yet again they have sold
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season passes to people where they promise them longer opening
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calendar than what they ended up delivering. So again I'm
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just putting that out there.
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Well, all do you thinks got well, I think all
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of these well, let's let's let's break it down, because
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they're not it's it's it's difficult to paint these all
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with the same brush. I think, although I think they
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are parallel, I think they are very much related. Let's start.
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Let's start with the the money's down, but the attendance
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is up. Let's let's start with that basic they're in theory.
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In my opinion, in theory, they're justification is is accurate.
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It could potentially work to their advantage to draw more
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people in. You know, there's always been that we talk
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about north Star all the time, and when you're not
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reaching your goals, quite often it is a popular choice
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with large parks to switch your north Star. You know,
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we're talking about let's let's make our north Star. We're
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gonna make We're gonna make X amount of dollars. Okay,
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But when you see that you're not gonna make that,
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then you have to spend the narrative because quite often
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you have to convince your stockholders we're doing okay, We're
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doing okay, and quite honestly, they probably are doing okay.
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They're not doing great, but they probably are doing okay.
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What you have to recognize is stockholders don't get paid
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in attendance. Stockholders earn their money in in revenue and profits.
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So it will. Could this potentially work by opening up
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their park to a newer audience, a different audience to
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your point, Philip, an audience that may not have come
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at full price? Yeah, yeah, that may that may work
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for them, but how are they going to maintain that offen?
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That are those guests who aren't able to come at
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full price when they go back to full price, that's
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right when they when they start to bring their ticket
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price back to where it should have been. You know,
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it's it's kind of the old adage. If you have
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a fifty dollars pair of jeans and you sell them
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for ten, you now have a ten dollars pair of jeens,
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because nobody's going to pay the fifty dollars for them again.
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So you have to be kind of careful with this
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strategy because this strategy, you know, it's it's the same
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the same idea, and and several parks have done it now,
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which is the pay for a day, come back all year,
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making a limited season pass of some sort excuse me,
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the price of one admission. And on paper, it's a
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great it's an easy sell because you can say, oh, look,
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most guests in our area only come once a year, anyway,
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So if we can get a second visit out of them,
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then we'll earn more in culinary merchandise, bringing along a friend,
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that kind of thing. Yep, sorry, I've been talking all day,
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so it's hi. So I think that's an important thing
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to keep in mind. I am not going to say
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that this is disastrous news. I'm not going to say
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that they're doing this to be deceptive. I will say
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that this is kind of common practice. So when they
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recognize we have to have something positive to tell our stockholders.
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I think we've seen a different version of this with
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other parks in the past. Sometimes it's hey, look at
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all the new things we're building. That happens. Sometimes it's
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look at our per cap. Our per cap is skyrocketing. Okay,
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but that's because half the number of people are coming
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to the park, and you know your overall revenue is tanking.
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There's there's there is. I would say this much whitewashing
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going on just to be able to say something good
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for the for the stockholders. And again, you don't want
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to lose the stockholders either. You got to make sure
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that that they're going to be there to continue to support.
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So you got to I don't want to say throw
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them a bone, but you have to. You have to
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do at least some positive spin. I will say, though,
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I am so sick and tired of hearing that the
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weather is one of the reasons. I know, I know,
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I know. I will say it's funny that since you know,
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being here with a bunch of theme park professionals from
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around the world. We had a discussion yesterday that was
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the stockholders are tired of hearing that weather is the issue.
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They're not buying it anymore, they're not leaving it anymore,
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and they're they're also saying kind of what we've been
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saying is the weather is not going to change. The
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weather is going to be the weather. And yes, it
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will vary slightly from season to season. Yes there are
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wetter seasons than others, there are drier seasons than others.
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But what do we know. Well, you know what the
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average temperature is going to be. It will fluctuate, but
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you still know what the temperature is going to be.
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You know that it's going to rain sometime, so you
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have to have a plan for that. When we back
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during back during COVID. Sorry I hate to use this
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reference yet again, but back during COVID when I was
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taking the Post Crisis Leadership certification, they basically said, you
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have to make it part of your business model that
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you planned for these contingencies. It's not like, oh my gosh,
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the weather was so bad this year and it just
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caught us totally off guard. Well, that to me is
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more negative towards the planning of the company than it
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is an excuse for not making your numbers. You have
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to plan for the fact that it could be a
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rainy season. You have to put that into your and
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plan for it time. If you don't have to put
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that plan into place, great, that's great. But you have
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to budget so that you can put that plan into place.
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Whatever that plan may look like, and it may look like,
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you know, you do a last minute you do a
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last minute change, you do a you plan to have,
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you plan to have return visits, you know, because I
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know nobody wants to do that. They they always it's like,
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you know, a rain or shine, no refunds. But the
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truth is, when you do that, then people leave and
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just simply don't come back. Yeah, so you kind of
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have to to weigh those And I'm not saying those
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are the only answers, But I think it's I think
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it's important for teams, leadership teams to recognize what is
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our plan when it rains, because it's not what is
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our plan if it rains? Or in Florida, it's not
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what is our plan if it's hot? You know, just
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like in Saudi, what is our plan when it's hot? No,
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it's going to be hot. So I think I think
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that that crisis planning, whether that crisis quote unquote happens
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to be weather, or that crisis happens to be a disease,
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or that crisis happens to be an economic downturn, or
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whatever you need. There's enough business analysts out there. In fact,
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I was working with one here at IAP who works
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for a business analyst company that their primary job is
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doing pre park evaluations. So is there a feasibilities there's
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feasibility studies that say yeah, that's a good idea. Those
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do include, by the way, those do include weather contingencies.
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You know, what is the tea in a swat analysis threats?
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You have to have that kind of mentality that you're
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helping to prepare for it. So that was just a
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long way of saying it is now a global issue
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that people are going weather is no longer an excuse.
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Yeah, well yeah, so if I'm in the summer, everything
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I would say again, their tendance is up, but they're
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spinning is down, and their long term strategy is that
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people are coming back. And to Scott's point, they have
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not like they blamed weather previously and now the weather
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is fine, so they're not mentioning it yet yet keyword yet,
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but they also have not made or announced any plans
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to resolve that. So what's going to happen again next
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year when the same weather happens again, right, and then
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people don't come back? That their plan on coming back
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and they've already degraded their pricing. I think that's what
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Scott's saying. And then at the same time, again, this
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all hinges on those guests coming back, right and spending more.
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And if they don't have a plan for the weather,
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or also if they don't invest in the quality in
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the parks, then again this all comes back to the execution.
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Are they gonna, like Scott's, are they going to make
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a plan for what to do about these disruptions that
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they just came out of, and are they going to
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make a plan to invest or to get encourage people
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coming back, and so far, all we have seen is
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actions that do not align with that, like no plan
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about the weather, cutting of seasonal events that encourage repeat visitation,
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not investing in quality improvements, you know, like all the
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things that they're saying they have not been doing. They've
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just been doing stuff like Scott had said, that kind
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of looks good to investors, like they've been going in
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cutting costs, and they've been changing the goal post and
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cutting costs so that it looks good, but the quality
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has not improved so far, like I have, I've seen
239
00:13:31.559 --> 00:13:34.200
nothing to say anywhere the quality any of the parts