Six Flags’ $100M Loss, CEO Exit & the Season Pass Gamble

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Oh my goodness. From our studios in Los Angeles in Tampa.

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This is green Tag Theme Park and thirty. I'm Philip

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and I'm joined as always by my co host Scott

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Sweinson of Scott Sweinson Creative Development. On Green Tag, we

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look at the top theme park news each week and

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discuss why it matters to industry professionals. And this week

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there's more six Flags drama, Big six, Big six Flags,

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Big six Flags.

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Now, I just, you know, not that we are always

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one hundred percent right, not that we always you know,

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our interpretations are always one hundred percent accurate. But let's

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let's go to the wayback machine here for just for

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a hot second, and look at last week where we

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were saying, boy, this is a really silly move. This

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is a poor choice, this is a bad move. They

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must really be in trouble. And in fact, I believe

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I use the phrase at one point in time if

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your holiday events aren't profitable, then you have a much

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bigger problem. In this show, we're going to talk about

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the much bigger problem apparently.

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Start yeah, yes, So last week we did discuss the

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big news last week, which was them kind of canceling

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or shifting around operating calendars and also shifting around seasonal

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events at some of their parks. But they also announced

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the most Valuable Pass sale that was going on only

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for this month, only for the month of August. And

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essentially it's like, if you purchase some of the higher

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level ones, you get access to every single six Lives

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property for the rest of this year and for next year.

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And the prices vary like here, for me at Notts,

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it would be like one hundred and twenty and then

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you can add a parking option, but that still covers

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again your Halloween and your Christmas for two years, you know,

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and then the rest in between. So it's a long

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period of time. They're still doing them, yeah, assuming Yeah,

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So it's a it's a it's a really good value.

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And I think we figured out this week why they're

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trying to get cash in because Scott said last week

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the only reason to do a sale like this, to

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do like a big flash shale, is because you need cash. Yeah,

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and it looks like they do need cash.

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Well, yeah, here's the report that says, hey, guess what

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we need cash. Yeah.

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So we'll start off first the earnings. So during the

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earnings call, they discussed that they lost one hundred million

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for the second quarter, which is not good because last

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time quarter last year they made a profit of fifty

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five million. So that's a really big swing. And I'm

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gonna read a few quotes here from it. So the

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quote here is they said the company pointed to a

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smaller base of seasoned pass holders heading into the final

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two quarters and a volatile economy for the downgrade. They

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also mentioned weather, of course, yes.

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Because that never happens. Weather, just never with this whole

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weather thing that's just come out of nowhere. Where did

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this weather come from.

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It's you know, it's like clear skies and then suddenly

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you know, you got rain. It'said prolonged rains, extreme temperatures,

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severe storms across six flag sites, and months of May

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and June adversely affected. And you know what, folks, we're

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not even in the summer yet, so get ready for

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get ready for. They didn't visit because it was too hot.

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But you know, now, it's because gravity. Gravity is is

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a big problem because we didn't expect that, you know, eh,

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So there's a there was a nine percent decrease in

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attendance a hunt, which is about one point four million

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fewer visitors and what they're doing. Basically, they said they're

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going to look to sell off land and other non

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essential assets to mitigate the impact. However, as we just

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as I just mentioned earlier, Scott and I think part

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of the mitigation is also this flash sale. So they're

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trying to like bring up their season pass holder base

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and they're trying to bring in revenue for that. If

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you can frontload your revenue, right for you, But then

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the downside of that is you're front loading all your

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revenue and then you have to provide reasons for them

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to come back. Ideally, but your your admission revenue will

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suffer then for next year the pan How farre you?

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And let me just clarify something. You know a lot

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of people think that season pass sales will sustain a park.

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It's all a balance. It's all a balance. And with

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season passes, the money, the profit is not made in

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selling the season passes. If you can frontload it, that's

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great because that means that you're getting money ahead of time,

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before you even have to operate the park that they're

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going to visit with that pass, that's great. But where

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they continue to generate revenue because I know there were

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some comments on last week's shows that talked about, you know,

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the seasonal episodes. It's just people you know, winding down

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their season passes, and they only become profitable if you

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have non pass holder guests. The truth is, what parks

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should want to do is to get their season pass

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holders to come back as often as possible, because if

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they do that, they are significantly more likely to make

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where they really make to suspend where they really make

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their money, which is on food and beverage and concessions

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and other merchandise and other special experiences or upcharge events

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that of course they get a discount for because they're

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a passholder. The passolders the money that you generated a

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passholder usually does not the passholder itself does not make

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a whole lot of profit. What it does is it

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allows the park to then have access to the profit

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they can make on all the other things that generate revenue.

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So I just wanted to clarify that just right off

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the bat. And secondly, to get this money all up front,

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as Philip said to the only reason to do this,

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the only business reason to do this is to improve

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your cash flow and to also turn around to your

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path to your board members and say, look how much

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our season pass base has increased, because they won't tell

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you it's at you know, one quarter the regular price,

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but they'll just say, look how much our pass base

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is increased. Look at numbers of people, not numbers of dollars.

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So this is this seems to be very much an

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act of desperation, just like selling off, you know, properties

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that are are not necessarily relevant to the overall brand,

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whatever that means.

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So yeah, yeah, there were a lot of comments on

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our video from last week, and we just wanted to

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clarify that it's we're not saying that like the events

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shouldn't be stopped if there's no one there or that

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operate that stuff shouldn't be trimmed, that that kind of

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a thing. It's more like Scott was saying, like, if

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you if you have a park and you're if you

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can't make money during Christmas or a Christmas event, there's

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a bigger problem. So maybe the bigger problem is that,

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like you shouldn't be operating those days at all, right,

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or you should be trimming maybe potentially even trimming the property,

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you know, I mean, there's nothing wrong with evaluating properties

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and being like there's not enough of a mask to

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make this work, and then reinvesting or selling the assets

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and reinvesting. That's basic business. It's more like if your

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park is open and you are not doing a Christmas

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event during Christmas time because it's not profitable, that's a

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bigger problem because that means there's not enough demand in

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that area. Maybe that means that you don't need to

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be open at all, or there's too much competition, which

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means it's not differentiated enough. There's a that would signify

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a different thing, which is the product market fit is

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not correct, right, And so that's the other problem. And

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then to other comments we got about season pass holders

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and you know they don't make money on them, blahah blah.

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Here's the thing. We're the theme park business model that

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six Flags talked about at their investment day, all hinges

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around season pass holders. So this isn't just coming from us,

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This is coming from six Flags of Sales during their

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investor day where they talked about the whole concept that

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the whole goal is to increase season pass sales and

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then to get those people to come back to get

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more people in the parks. So we're not like we're

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not making this up. It's coming. It comes directly from

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Six Flags and from their investigation. Now what we would

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say is, I think Scott and I do agree that

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that is a business model for parks, but it's not

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the only business model we you know, look at Disney.

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Basically Disney eliminated pass old pass members for a while. Yeah,

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they eliminate passolders for a while. It's all just a

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balancing act of the demand to go to the park itself,

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Like what is the demand if the demand is high enough,

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Like at Epic Universe is a good example. Right now,

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the demand is so high they're not selling season passes

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for that and your current season pass holders can't get

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in to Epic Universe because the demand is so high.

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And then for Disney, they take them on and off

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of sale days because the demand is high enough where

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they don't need them. And in that case, yes, you

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can get more of your revenue from people that are

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purchasing single day tickets and the purchase price is so high.

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But that's it's not what Six Flags is targeting. By

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their own admission, they are targeting season pass holders. That's

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where they want to make their money. So we're just

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saying that that's that's what's their plan is sell more

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season passes and then monetize the season pass holders. If

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we can encourage them to come in more frequently, they'll

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spend more money on the in park stuff. So basically

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it's a mall. Yeah.

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Well, and quite honestly, the season pass model we want

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to increase. Our season pass model works well for local parks, it.

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Works works for a lot of parks for a long time.

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Yeah, for regional parks, it's great. For destination parks like

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Disney's and universals, you make significantly more off of your

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one two day ticket sales, so they don't need that.

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The nice thing though about having the season pass model,

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or finding a balance there of Bush Garden Stampa was

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a great balance. We were we had one foot in

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the local market and one foot in the destination market,

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and so when like nine to eleven happened, the park

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didn't have to go under. When COVID happened, the park

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didn't have to go under. It was one of those

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situations where they were able at those times. Things have

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changed a little bit now, but at those times they

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were able to lean heavily, more heavily into the either

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the season pass base or lean more heavily into the

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tourism base, depending on where you were in that pendulum

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swing of travel. So yeah, it's my personal opinion, and

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I'm certainly no expert, but my personal opinion based on

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anecdotal information or observations and working in multiple parks in

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different places. You kind of want to have a balance

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of both because your past members will at least get

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the turnstiles clicking when there's no travel, and your high

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money spenders are going to be the people who travel

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or on vacation in your area, and they're the ones

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who you know are gonna are going to spend the

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big bucks. They're the impressive numbers. So it kind of

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depends on and every board I've ever known or been

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involved with looks at things that they're pitched one of

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two ways. Either here's how much money we made or

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here's how many guests we've had. And you know, you

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can make your guest numbers skyrocket if you take the

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cost of admission down to virtually nothing. You can make

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your finances skyrocket if you offer a product that people

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are willing to pay top dollar for. So finding that

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balance is the tricky part. But you know, the idea

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that the only way to make money is with season

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passes not particularly accurate, but finding a nice balance, that's

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a much better approach.

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Yeah, and I also want to dovetell what Scott said too,

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it's like it is a balance. And again back to

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their investor talk, they did talk about that, you know,

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but they also talked about how they wanted to go

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in and renovate the food and beverage locations. Like there's

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so much plans about renovating food and beverage and doing

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cleaning up all that stuff.

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And of course, like.

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If you just think about it, when you renovate the

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food and beverage, of course the prices are probably going

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to go up because that's usually what happens when you

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renovate FMB location because it's better food, right, make better food.

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That way, you can get higher prices, which is higher margin.

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And they're basically they're paying close to the same price

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and most there is a little bit of discount, but

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I mean that's that's the goal, is to get more

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people in the park and then get them spending on

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more attractive items. That's their whole plan, and also to

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encourage them to go to multiple. I mean, they talked

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about rolling out a new app next year and rolling

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out a new CRM system in twenty twenty six that

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would offer incentivized offers to families based off of their

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visiting patterns and their locations. Right, So if you just

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think about it, a lot of these six Flags parks

241
00:13:01.360 --> 00:13:04.440
are within driving distance. It is possible, so if they

242
00:13:05.080 --> 00:13:07.600
targeted an offer to a family, they might be able

243
00:13:07.600 --> 00:13:10.080
to get that family to visit multiple parks. So then

244
00:13:10.120 --> 00:13:12.840
you're just this like a whole ecosystem. So it was

245
00:13:12.879 --> 00:13:17.120
an interesting vision that they laid out. We're just we're

246
00:13:17.159 --> 00:13:20.759
just kind of reporting on the vision and then talking

247
00:13:20.799 --> 00:13:23.399
about it, right, we're I mean, it wasn't like our

248
00:13:23.440 --> 00:13:25.080
idea that they're making money in this way.

249
00:13:25.080 --> 00:13:26.799
It's just like this is what they said. That's what

250
00:13:26.840 --> 00:13:28.919
they told investors. And it's not just the thing is

251
00:13:28.960 --> 00:13:31.679
it's not just six Flags either. These approaches have been

252
00:13:31.799 --> 00:13:35.000
used for many, many years in many different ways. The

253
00:13:35.039 --> 00:13:38.000
only reason they're the only difference now is technology makes

254
00:13:38.000 --> 00:13:41.960
them easier. So you know, that's that's the thing. And

255
00:13:41.960 --> 00:13:43.200
if they're going to lean in, you know, if they're

256
00:13:43.200 --> 00:13:47.320
going to lean into the past member market, you darn

257
00:13:47.360 --> 00:13:50.600
well better improve your food because that's where you're going

258
00:13:50.639 --> 00:13:52.519
to make your money. After two visits. You don't make

259
00:13:52.519 --> 00:13:54.279
a whole heck of a lot off of past members,

260
00:13:54.679 --> 00:13:57.399
except for the fact that they pay too. If they

261
00:13:57.399 --> 00:13:59.399
don't have the parking add on, they paid a park

262
00:13:59.559 --> 00:14:01.039
If they, you know, are going to be there the

263
00:14:01.080 --> 00:14:03.919
whole day, they're going to buy food, if they're going

264
00:14:03.960 --> 00:14:07.919
to bring families and friends, then those people are going

265
00:14:07.960 --> 00:14:11.679
to buy a ticket, buy a T shirt. You know,

266
00:14:11.720 --> 00:14:13.639
the season pass holders won't buy a T shirt unless

267
00:14:13.639 --> 00:14:17.399
it's a past member only thing. So they are essential

268
00:14:17.440 --> 00:14:19.559
parts of this whole thing. So let's not you know,

269
00:14:19.639 --> 00:14:24.440
get that wrong. But so the next thing we heard

270
00:14:24.720 --> 00:14:29.240
during the investor call, which kind of I'm not sure

271
00:14:29.320 --> 00:14:31.320
how much this changes the story it or doesn't, I'm

272
00:14:31.320 --> 00:14:35.480
not sure. But so also during the investor call, the

273
00:14:36.120 --> 00:14:39.480
Six Flags President and CEO Richard Dimmermann announced his plans

274
00:14:39.519 --> 00:14:40.399
to step.

275
00:14:40.200 --> 00:14:42.759
Down by the end of twenty twenty five. He's going

276
00:14:42.759 --> 00:14:45.279
to remain in his role until a successor is found

277
00:14:45.480 --> 00:14:48.120
and will continue as a board member after that, and

278
00:14:48.200 --> 00:14:51.279
the board has already started a search for the next CEO,

279
00:14:51.320 --> 00:14:56.639
considering internal and external candidates there is he put out

280
00:14:56.759 --> 00:14:58.720
a big statement. I don't think there's anything in the

281
00:14:58.759 --> 00:15:02.559
statement that is it's all it's all basic, uh, you know,

282
00:15:03.000 --> 00:15:07.039
basic speak. But what's the most interesting to me, though,

283
00:15:07.120 --> 00:15:09.919
is just all this looks pretty bad. This is all

284
00:15:09.960 --> 00:15:12.320
like really bad timing. So I have noid, I don't.

285
00:15:12.320 --> 00:15:16.960
I don't know if I'm obviously that the stock you know,

286
00:15:17.000 --> 00:15:19.840
took hits from all of these items. Not only it,

287
00:15:19.919 --> 00:15:23.799
you know, decreased attendance, decreased revenue. Also the CEO is

288
00:15:23.799 --> 00:15:26.080
stepping down, and they just did this whole reset, like

289
00:15:26.120 --> 00:15:28.399
they just finished the merger and then they made this

290
00:15:28.440 --> 00:15:31.759
big reset, and the whole pitches this whole time has

291
00:15:31.799 --> 00:15:34.799
been they're going to do cost saving from synergies and

292
00:15:34.840 --> 00:15:36.919
then they're going to increase There's like what we've just

293
00:15:36.960 --> 00:15:40.480
been saying, they're going to do cost savings from synergies.

294
00:15:40.679 --> 00:15:43.159
And then when they put all this stuff together, like

295
00:15:43.200 --> 00:15:46.720
a new CRM and the new renovations and then this

296
00:15:46.759 --> 00:15:50.240
new passholder program, they're gonna be able to incentivize repeat visits,

297
00:15:50.240 --> 00:15:53.240
more repeat visits from passolders, which is going to increase

298
00:15:53.600 --> 00:15:56.159
their sales of F and B and all this new stuff.

299
00:15:56.159 --> 00:16:01.360
They it's big, this whole big plan. So I mean,

300
00:16:01.399 --> 00:16:03.279
I'm not sure if it's bad news or not. I mean,

301
00:16:03.600 --> 00:16:05.799
how bad is it that the CEO is stepping down

302
00:16:06.320 --> 00:16:09.879
after they've just started this plan where they haven't even

303
00:16:09.919 --> 00:16:12.440
really finished. Im me, it doesn't matter at all, I guess.

304
00:16:12.559 --> 00:16:14.960
Or since the plan's already done, maybe someone else can

305
00:16:15.039 --> 00:16:17.919
just come in and follow it. But you know how

306
00:16:17.960 --> 00:16:20.919
that goes if and you know, like basically, new CEOs

307
00:16:21.080 --> 00:16:24.279
like to have their own vision, right, So if a

308
00:16:24.320 --> 00:16:26.399
new CEO comes in, are they just going to throw

309
00:16:26.399 --> 00:16:28.799
out the old plan and say no, we need to

310
00:16:28.879 --> 00:16:31.320
start selling off all their land and turn everything into CityWalk.

311
00:16:32.039 --> 00:16:34.840
Well, and the funny thing is when the moment you

312
00:16:34.919 --> 00:16:39.559
said he's going to stay on until they find a successor,

313
00:16:39.960 --> 00:16:42.279
and the moment you said he will then continue on

314
00:16:42.320 --> 00:16:45.440
as a board member, what I just heard was the

315
00:16:45.480 --> 00:16:49.000
opening of a golden parachute. So it is possible, and

316
00:16:49.039 --> 00:16:50.960
I'm not saying this is true. I do not know,

317
00:16:51.360 --> 00:16:53.360
but it would not be out of the realm of

318
00:16:53.360 --> 00:16:56.919
possibility that this is part of the plan because they

319
00:16:56.960 --> 00:16:59.480
all knew that in doing all of these things and

320
00:16:59.519 --> 00:17:03.480
doing all these reallocations after the merger, et cetera, et cetera,

321
00:17:03.519 --> 00:17:06.160
et cetera, that it was going to go through some lean,

322
00:17:06.359 --> 00:17:09.640
rough difficult times where things were going to be cut,

323
00:17:09.680 --> 00:17:11.480
things were going to be changed, things were going to

324
00:17:11.519 --> 00:17:15.279
be tweaked, things were going to be right sized to

325
00:17:15.480 --> 00:17:20.960
fit a profitable business model, and they needed a scapegoat

326
00:17:21.400 --> 00:17:25.960
to be able to be the sacrificial lamb. But how

327
00:17:25.960 --> 00:17:28.920
sacrificial is it if he's staying on until they find

328
00:17:28.920 --> 00:17:32.880
a successor, and if he goes and becomes a board

329
00:17:32.880 --> 00:17:37.799
member after after stepping down, so he's clearly not leaving

330
00:17:38.319 --> 00:17:42.319
in in total shame. He is, he's stepping aside saying,

331
00:17:42.759 --> 00:17:45.720
you know, these not these numbers are not good. Perhaps

332
00:17:45.759 --> 00:17:48.119
I'm not the right person for the job. Now I'm

333
00:17:48.160 --> 00:17:50.319
going to do much less work and still get paid.

334
00:17:50.519 --> 00:17:56.119
Is pretty much what I'm hearing here. So I don't

335
00:17:56.200 --> 00:17:58.240
I don't know. I don't know that for a fact,

336
00:17:58.359 --> 00:18:02.839
but it it wouldn't surprise me. I mean, you know,

337
00:18:03.160 --> 00:18:06.799
we get information, We get information in many cases about

338
00:18:06.839 --> 00:18:10.759
these large corporations that has been brewing for years, yes,

339
00:18:10.839 --> 00:18:14.240
and you know, probably bubbling around even before the merger,

340
00:18:14.519 --> 00:18:16.880
and they're talking about okay, so after we merge. We're

341
00:18:16.880 --> 00:18:18.680
going to go through a rough time here because we've

342
00:18:18.680 --> 00:18:20.480
got to get everything in line. We're going to we

343
00:18:20.559 --> 00:18:25.559
have to find those opportunities for for those those cost savings.

344
00:18:26.039 --> 00:18:28.599
And oh, by the way, we're also opening a new

345
00:18:28.640 --> 00:18:31.759
park in the Middle East, so that's going to be

346
00:18:31.759 --> 00:18:37.559
a big boost to our visibility, so that will help us. So,

347
00:18:37.880 --> 00:18:39.200
you know, there's a lot of there's a lot of

348
00:18:39.200 --> 00:18:43.240
balls in the air right now. And since he's not

349
00:18:43.319 --> 00:18:47.160
leaving the park and not leaving the system, it kind

350
00:18:47.160 --> 00:18:51.519
of sounds like this is a very amicable step down.

351
00:18:52.480 --> 00:18:55.960
Yeah, that's interesting. I didn't think of it that way,

352
00:18:56.039 --> 00:19:00.519
and I didn't think also maybe it is kind of

353
00:19:00.519 --> 00:19:02.799
similar to what you're saying about, like maybe like the

354
00:19:02.880 --> 00:19:06.200
clustering of the bad news and the scapegoat concept, where like,

355
00:19:08.039 --> 00:19:11.720
I mean there's been a lot of recent cuts. I

356
00:19:11.759 --> 00:19:15.960
mean operating calendars, seasonal events. Remember the regional park managers

357
00:19:15.960 --> 00:19:18.960
they cut those two or the sorry the not regional

358
00:19:18.960 --> 00:19:19.519
park managers.

359
00:19:19.559 --> 00:19:22.880
They cut the park managers so that they would park counders,

360
00:19:23.440 --> 00:19:25.039
park presidents basically.

361
00:19:25.000 --> 00:19:26.799
Yeah, all the park presidents, and then they kind of

362
00:19:26.920 --> 00:19:30.799
shift into regional only operations. So I mean that's kind

363
00:19:30.839 --> 00:19:34.960
of a lot of you know, I mean, which is

364
00:19:36.799 --> 00:19:39.559
so maybe they're even going to do some more like

365
00:19:39.920 --> 00:19:43.480
cuts or some more like trimming or whatever now and

366
00:19:43.519 --> 00:19:45.480
then just put everything on him and be like, oh,

367
00:19:45.519 --> 00:19:47.799
it's all and then he can be the scapegoat, but

368
00:19:47.880 --> 00:19:50.440
not really disappear because he'll just go and lurk on

369
00:19:50.480 --> 00:19:50.880
the board.

370
00:19:50.960 --> 00:19:51.759
But the people won't.

371
00:19:52.359 --> 00:19:53.920
Yeah, but no one looks at the board, I mean

372
00:19:53.960 --> 00:19:56.480
no one ever. Everyone only blames the CEO.

373
00:19:56.599 --> 00:19:59.480
Yeah, it's a perfect it's a perfect opportunity to say, oh,

374
00:19:59.519 --> 00:20:01.400
well that was during the rough years, that was during

375
00:20:01.440 --> 00:20:05.599
the Zimmerman years. But he's gone now, you know, And

376
00:20:05.640 --> 00:20:08.000
these were things that had to happen. I mean, I've

377
00:20:08.400 --> 00:20:11.680
correct without without sharing the information that I'm not allowed

378
00:20:11.680 --> 00:20:16.240
to share. I have seen people be put into positions

379
00:20:16.279 --> 00:20:19.680
simply to be the hatchet person, and then they are

380
00:20:19.680 --> 00:20:23.200
promised and they are promised something else elsewhere so that

381
00:20:23.240 --> 00:20:26.799
they come in, they do their devastation. Everybody gets angry

382
00:20:26.799 --> 00:20:29.240
with them, they get blamed for everything, they get a

383
00:20:29.279 --> 00:20:33.640
great payout, their golden parachute opens, and they slowly and

384
00:20:33.839 --> 00:20:36.160
gently fall into a new job or a new position.

385
00:20:36.640 --> 00:20:41.640
So where's my golden parish.

386
00:20:41.680 --> 00:20:46.799
So it's these things have happened before. You know. I'm

387
00:20:46.839 --> 00:20:48.559
not saying that's what this is. I'm not I don't

388
00:20:48.559 --> 00:20:51.519
know whether that's what this is or not, but it

389
00:20:51.599 --> 00:20:54.759
has a lot of the earmarks of previous experience in

390
00:20:54.759 --> 00:20:56.160
this regard.

391
00:20:56.799 --> 00:20:59.559
Well, So I think where we are now is that

392
00:21:01.279 --> 00:21:06.039
six Flags definitely needs to write size. Uh and like

393
00:21:06.039 --> 00:21:08.480
like we had just said, maybe it is much maybe

394
00:21:08.480 --> 00:21:10.359
they need to be more aggressive in their trimming of

395
00:21:10.400 --> 00:21:13.240
properties or trimming of operations calendars or whatever to make

396
00:21:13.240 --> 00:21:17.920
it work. And the dip in attendance is concerning. The

397
00:21:18.039 --> 00:21:21.599
question is maybe like are they right, are they going

398
00:21:21.680 --> 00:21:24.480
to write size appropriately to adjust that, or are they

399
00:21:24.559 --> 00:21:28.440
going to find ways to incentivize those repeat visits like

400
00:21:28.440 --> 00:21:30.799
they've been talking about or whatnot, or like how you

401
00:21:30.839 --> 00:21:34.440
know that that is I think a little concerning, but

402
00:21:34.480 --> 00:21:38.079
maybe like to your point, maybe it's not unexpected and

403
00:21:38.119 --> 00:21:39.559
they kind of knew that there was going to be

404
00:21:39.599 --> 00:21:42.000
these dips and then they're just going to keep trimming

405
00:21:42.079 --> 00:21:44.960
until they kind of wish that equilibrium. So I mean

406
00:21:45.000 --> 00:21:46.680
I wouldn't count six Flags out yet.

407
00:21:46.799 --> 00:21:48.839
Basically the exact same thing I was going to say,

408
00:21:48.839 --> 00:21:52.359
the exact same thing the six Flags, you know, and

409
00:21:52.400 --> 00:21:55.279
I think I've alluded to this before. One of the

410
00:21:55.319 --> 00:21:58.240
options that I think six Flags has, you know, I

411
00:21:58.279 --> 00:22:01.160
love the idea of doing the park the park past,

412
00:22:01.160 --> 00:22:03.960
where you can get in anywhere, which will which is

413
00:22:04.039 --> 00:22:08.039
great for news media, it's very sexy when you talk

414
00:22:08.079 --> 00:22:12.200
about it on the news. It will impact a minuscule

415
00:22:12.240 --> 00:22:15.240
amount of park goers because most people will not travel

416
00:22:15.279 --> 00:22:17.960
from you know, will not say I'm going on a

417
00:22:19.759 --> 00:22:21.960
coaster road trip across the world or across the custry.

418
00:22:22.039 --> 00:22:24.359
The travel is the expensive part actually is not the

419
00:22:24.440 --> 00:22:25.640
park path, right.

420
00:22:25.599 --> 00:22:28.279
But once you get the park pass, then you say, well, yeah,

421
00:22:28.359 --> 00:22:30.279
now I have a reason to drive to you know,

422
00:22:30.359 --> 00:22:32.400
three states over and ride the so and so coaster

423
00:22:32.519 --> 00:22:38.000
and whatever. But they may also discover that they need

424
00:22:38.039 --> 00:22:42.720
to lean in to the local nature your hometown park,

425
00:22:43.559 --> 00:22:45.680
you know, if they were to take the we are

426
00:22:45.799 --> 00:22:50.920
your hometown park and use the purchasing power of the

427
00:22:50.960 --> 00:22:57.960
giant corporation and create a sense of local ownership. I

428
00:22:57.960 --> 00:22:59.640
think that's part of the reason that six Flags Great

429
00:22:59.640 --> 00:23:03.160
America in Gurnee continues to be somewhat successful. I mean,

430
00:23:03.160 --> 00:23:05.920
it's not a huge it's not a great performer either.

431
00:23:05.960 --> 00:23:09.799
But it's still around and it's celebrating its fiftieth anniversary,

432
00:23:10.880 --> 00:23:13.640
you know, this next year. And I think part of

433
00:23:13.680 --> 00:23:16.319
the reason is because the locals love it. I mean

434
00:23:16.359 --> 00:23:21.440
a perfect example, about fifteen twenty years ago, they tried

435
00:23:21.480 --> 00:23:24.160
to get rid of one of the roller coasters that

436
00:23:24.200 --> 00:23:26.359
was one of the original coasters in the park, and

437
00:23:26.400 --> 00:23:29.799
there was so much pushback from the locals saying, no, no,

438
00:23:29.839 --> 00:23:33.000
we don't want anything new, we want that coaster. That's

439
00:23:33.039 --> 00:23:37.400
our coaster. When you can build that kind of of commitment,

440
00:23:38.119 --> 00:23:44.079
you're gonna have success. The trick is translating that into dollars.

441
00:23:44.640 --> 00:23:51.519
Yeah, so okay, well we have time to cover another story,

442
00:23:52.039 --> 00:23:57.559
which is that SeaWorld is doing pretty good in comparison.

443
00:23:57.960 --> 00:24:00.279
And so this is just interesting. I thought it was

444
00:24:00.319 --> 00:24:03.160
interesting to have these two different perspectives. On the one hand,

445
00:24:04.640 --> 00:24:06.920
we talked about this, I don't even know when, a

446
00:24:06.920 --> 00:24:10.880
long time ago, about the idea of diversifying your risk,

447
00:24:11.279 --> 00:24:14.720
and in many ways, Six Flags is the most diversified

448
00:24:14.759 --> 00:24:18.039
of risk because they have places all over the country, right,

449
00:24:18.079 --> 00:24:20.680
so it doesn't matter what's happening with one state or

450
00:24:20.720 --> 00:24:23.160
one natural disaster or this or that. You know, there's

451
00:24:23.200 --> 00:24:27.039
wildfires in California, then there's hurricanes in Florida. I mean,

452
00:24:27.039 --> 00:24:29.079
you have stuff all over. But if you have a

453
00:24:29.119 --> 00:24:32.000
park all over the parks all over the country in

454
00:24:32.039 --> 00:24:36.240
smaller areas and in bigger areas, that means that you're,

455
00:24:36.319 --> 00:24:42.759
in theory, you're more risk diverse. However, the downside of

456
00:24:42.759 --> 00:24:45.359
that is they don't really have anything in the in

457
00:24:45.400 --> 00:24:48.279
the regions of these big you know, like Orlando, So

458
00:24:48.319 --> 00:24:51.519
when there's a big boom in one area, then you

459
00:24:51.559 --> 00:24:55.359
don't you don't benefit from that. So we got some

460
00:24:55.480 --> 00:24:59.200
interesting data out from the United Parks which also had

461
00:24:59.200 --> 00:25:04.440
their earnings, and it seems like SeaWorld Orlando their numbers

462
00:25:04.480 --> 00:25:08.599
have increased due to Epic Universe opening, which is something

463
00:25:08.599 --> 00:25:12.559
that we talked about, right Rising Tide.

464
00:25:12.319 --> 00:25:15.599
Who talked about figured except it happens every single time

465
00:25:15.640 --> 00:25:16.880
a new park opens in a region.

466
00:25:18.440 --> 00:25:20.880
Yeah, we did talk about this, but the thing is

467
00:25:20.880 --> 00:25:24.519
a lot of people did not believe us well, and.

468
00:25:24.799 --> 00:25:29.279
The only reason it seems so duh to me is

469
00:25:29.839 --> 00:25:32.160
when you look at how people vacation. You know, these

470
00:25:32.160 --> 00:25:34.880
are destination parks, So when you look at how people vacation,

471
00:25:35.920 --> 00:25:39.279
they travel from the Midwest they come down to Florida

472
00:25:39.720 --> 00:25:42.599
and they come down to visit Epic because that's what

473
00:25:42.680 --> 00:25:46.079
they're there to do. They visit Epic, they spend their

474
00:25:46.079 --> 00:25:49.799
times out outdoors, they do all eleven rides, and then

475
00:25:49.799 --> 00:25:53.240
they look for something else to do. And the next

476
00:25:53.279 --> 00:25:54.960
thing they're gonna do, Oh, you know what, we've got

477
00:25:55.000 --> 00:25:57.839
an extra day, let's go to SeaWorld. The more people

478
00:25:57.880 --> 00:26:00.519
you can get into the region from outside the region,

479
00:26:01.039 --> 00:26:04.599
the more attendance goes up for everybody. This happened with

480
00:26:04.640 --> 00:26:06.920
Bush Gardens, Tampa, which is, you know, anywhere from an

481
00:26:06.920 --> 00:26:09.559
hour and twenty minutes to four hours from Orlando, depending

482
00:26:09.599 --> 00:26:14.000
on what I four is doing. And when Animal Kingdom opened,

483
00:26:14.240 --> 00:26:16.720
initially all the people in the park were terrified because

484
00:26:16.720 --> 00:26:18.960
they thought, well, here's Disney doing a kind of park

485
00:26:18.960 --> 00:26:22.440
that we have animals and rides. Oh gosh. And it

486
00:26:22.480 --> 00:26:25.880
was a phenomenal year for us. Yeah, phenomenal year for

487
00:26:25.960 --> 00:26:28.240
us because like minded people came to the area and

488
00:26:28.279 --> 00:26:30.240
we're looking for other things to do on top of

489
00:26:30.279 --> 00:26:33.319
their primary reason. And we will take the writing. You know,

490
00:26:33.359 --> 00:26:35.759
we were happy to take the riding on the coattails

491
00:26:35.799 --> 00:26:39.000
of the of the Disney park. And that's exactly what

492
00:26:39.039 --> 00:26:40.519
it sounds like SeaWorld is doing as well.

493
00:26:41.400 --> 00:26:45.079
Yeah, it was interesting because the CEO seemed to get

494
00:26:45.119 --> 00:26:48.240
a little spicy in his comments. But basically, what this

495
00:26:48.319 --> 00:26:50.960
has been is it's been I don't know who's driving this.

496
00:26:51.079 --> 00:26:53.480
Is it regular news media or people that don't outside

497
00:26:53.519 --> 00:26:56.920
the industry or whatever. People love to have this idea

498
00:26:57.000 --> 00:27:00.839
of competition, like it's Disney versus Universe and then everybody

499
00:27:00.880 --> 00:27:02.759
else is just terrible. You know, they love to have

500
00:27:02.799 --> 00:27:05.000
this idea, But as Scott just said, it doesn't work

501
00:27:05.039 --> 00:27:07.720
that way. It really more works in that our real

502
00:27:07.720 --> 00:27:11.440
competition is you not going to Orlando. That's the real competition.

503
00:27:12.240 --> 00:27:15.920
It's not between Disney Universal. It's between you staying at

504
00:27:15.920 --> 00:27:18.279
home or you not booking the trip or you're not

505
00:27:18.319 --> 00:27:21.000
going because as we just discussed, the major cost is

506
00:27:21.000 --> 00:27:25.279
actually the travel. It's like the flight, the transport, the hotel,

507
00:27:25.640 --> 00:27:28.480
those are usually the major costs, right, So it's really

508
00:27:29.400 --> 00:27:32.319
you deciding to go into the place versus just staying home.

509
00:27:32.400 --> 00:27:35.359
That's that's the real or go to a different city, right,

510
00:27:35.400 --> 00:27:39.240
That's that's the real thing here. So he what he

511
00:27:39.359 --> 00:27:43.079
said specifically, this was the who is this? This? This51200:27:43.079 --> 00:27:48.480



this is a statement from the CEO during the earnings call.51300:27:49.799 --> 00:27:54.359



He says he kind of reiterates all of that, we51400:27:54.359 --> 00:27:56.759



welcome investment in the Orlando market. We believe more high51500:27:56.839 --> 00:27:58.960



quality investment is good for the overall market and good51600:27:58.960 --> 00:28:02.519



for our business. But then the spicy part is in51700:28:02.599 --> 00:28:05.640



the spirit of hopefully giving clarity and some conclusion to51800:28:05.720 --> 00:28:08.480



this open question, I will share with you all as expected,51900:28:08.519 --> 00:28:10.799



attendts at our siegual Orlando Park has been up in52000:28:10.839 --> 00:28:14.160



attendance since Epic Universe opened on May twenty second. It52100:28:14.240 --> 00:28:16.279



was up for the full second quarter, and it was52200:28:16.400 --> 00:28:19.759



up if you measure from the day Epic opened through52300:28:19.799 --> 00:28:22.039



the end of the second quarter. It continues to be52400:28:22.119 --> 00:28:24.240



up quarter to day through August sixth on a day52500:28:24.240 --> 00:28:26.880



to day basis, and we expect attendance for the remainder52600:28:26.920 --> 00:28:29.720



of the year at this park to be up as well.52700:28:30.079 --> 00:28:33.599



We hope this provides helpful context to you all. We52800:28:33.680 --> 00:28:37.160



have great respect for our competitors in Orlando. We welcome52900:28:37.160 --> 00:28:40.920



and increase investment. We really don't have to discuss this53000:28:41.000 --> 00:28:43.599



topic again. We do not plan to make it a53100:28:43.640 --> 00:28:46.680



normal practice to discuss individual park performance in the future.53200:28:47.839 --> 00:28:51.599



So here's the thing as you say, Philip, everybody, it's53300:28:51.599 --> 00:28:53.519



real easy for people who are in the industry to53400:28:54.119 --> 00:28:56.559



look at the industry and go, well, it's these guys53500:28:56.599 --> 00:29:02.079



against these guys. You know. To be completely honest, if53600:29:02.119 --> 00:29:05.839



you don't think the parks are fully aware, like the53700:29:05.839 --> 00:29:08.480



parks in Orlando, in Central Florida, we'll just say central Florida.53800:29:08.559 --> 00:29:10.279



If you don't think the parks in Central Florida are53900:29:10.279 --> 00:29:13.599



fully aware of what is going to be announced at54000:29:13.599 --> 00:29:19.279



the other parks long before it's announced, you're you're sorely mistaken.54100:29:20.319 --> 00:29:24.000



Perfect example is media days for the new for either54200:29:24.039 --> 00:29:28.960



seasonal things or new attractions or whatever. The marketing departments54300:29:28.960 --> 00:29:31.839



call one another. They reach out to one another and say, Hey,54400:29:32.079 --> 00:29:36.519



we've got something coming up on October first, and we're54500:29:36.559 --> 00:29:38.279



going to do a big blowout. Do you have anything54600:29:38.279 --> 00:29:42.039



planned for October first? Well, no, we were doing ours54700:29:42.039 --> 00:29:44.680



on the fifth. Great, then we won't compete. They never54800:29:44.839 --> 00:29:47.960



want to compete for media. The same is true when54900:29:48.000 --> 00:29:50.279



they are opening a new park. They know exactly when55000:29:50.279 --> 00:29:52.319



the parks are going to open. They and what's even55100:29:52.359 --> 00:29:54.519



more important is they know how many hotel rooms in55200:29:54.559 --> 00:29:58.119



the area are booked, which is why here's the takeaway55300:29:58.160 --> 00:30:01.079



for you know, people who aren't Disney and Universal folks.55400:30:01.680 --> 00:30:04.920



Become a member of your CVB, your Convention and Visitors Bureau,55500:30:05.119 --> 00:30:07.640



because then you can find out exactly how many hotel55600:30:07.680 --> 00:30:10.000



rooms in your area are booked at any given time,55700:30:10.240 --> 00:30:13.519



because that's really how they judge their success. How many55800:30:13.519 --> 00:30:16.960



hotel rooms do we have booked and how many people55900:30:16.960 --> 00:30:20.160



are in our area, so that all of the businesses,56000:30:20.240 --> 00:30:22.559



all of the attractions in our area are going to56100:30:22.599 --> 00:30:24.559



thrive at this time and we need to be prepped56200:30:24.599 --> 00:30:28.160



for it. So there's there's the takeaway for people who56300:30:28.160 --> 00:30:32.960



aren't necessarily on the top of the food chain when56400:30:32.960 --> 00:30:38.599



it comes to the competitiveness of theme parks. Okay, this56500:30:38.720 --> 00:30:41.559



was an interesting show. I really had fun today, Thank you, Philip,56600:30:41.759 --> 00:30:44.480



but we are out of time, so on behalf of56700:30:44.720 --> 00:30:47.359



Philipernandez with Gantam Lighting and the Haunted Attraction Network and56800:30:47.359 --> 00:30:53.039



myself Scott Swinson with this show duh and Scott's when's56900:30:53.079 --> 00:30:55.319



a creative development? This is Green Tag Theme Park in57000:30:55.400 --> 00:30:57.400



thirty and we will see you next week.