Cedar Fair could benefit from longer seasons

Friday, 26 May 2006

Knott's purchase in 1997 almost doubled revenues, costs for year-round park; what about new parks?

By BENJAMIN ROODE
benjaminroode@sanduskyregister.com

SANDUSKY - Knott's purchase in 1997 almost doubled revenues, costs for year-round park; what about new parks?

Officials with Cedar Fair are still foggy on how slightly longer seasons at at least three paramount parks will affect company revenues, ticket options and promotions.

King's Island, Carowinds, King's Dominion and Great America all have the potential to open weeks before Cedar Point's traditional early May opening.

This year, King's Island opened April 14. Great America in California opened April 1. Carowinds, in North Carolina, opened March 25.

Those early openings are subject to fickle weather and early-year technical problems, said Carowinds spokesman Scott Anderson. Blustery March weather, with the possibility of even snow or constant rain, could leave a park without guests and a company paying workers with nothing to do.

"Depending on the year, it varies," he said. "Sometimes in November and March, (the weather is) horrible."

Carowinds officials decide in March how long the park will stay open in the season. Sometimes, the available dates go into November.

Cedar Fair officials have not decided whether or not to extend the season at warmer-weather parks, said company spokesperson Stacey Frole.

"It's definitely an option, but no decisions have been made at this point," she said. "We can't make that type of decision until we really look at the properties."

Cedar Point made a big push at the end of last year's season for increased attendance with reduced admission prices and the park's "Halloweekends" promotion. Autumn admission increases could be in the Paramount Parks' futures, Frole pointed out, because those parks don't do as many late-season promotions.

Anderson with the Carowinds park said there's two weeks of leeway on both beginning and ending dates for the season, with warmer weather extending past September and sometimes October. That's an extra month of possible admission opportunities.

Extra long seasons don't always bring windfalls of cash. Purchasing Knott's Berry Farm in 1997 almost doubled Cedar Fair revenues from $264.1 million in 1997 to $419.5 million in 1998.

Costs, however, followed suit, jumping to $306.9 million in 1998 from $187.8 million the year before. More full-time employees, merchandise and food costs at the year-round Knott's Berry Farm drove up those liabilities, said Cedar Fair spokesperson Stacey Frole.

Profits jumped more modestly, from $76.3 million in 1997 to $112.6 million in 1998.

A longer season, especially on the East coast, could reach a captive audience, said Robert Routh, a stock analyst with Jefferies and Co. in New York that follows the amusement industry. Other parks, like Cedar Point, that are closed earlier and later in the season, obviously can't admit guests when they're closed. Parks that can stay open longer get guests that are looking for one last or the season's first thrill.

"When parks are open longer... they have a bigger market share," he said. "People have fewer places to go."

A new owner, and in turn new operating philosophies and possibly new rides, could draw guests who haven't visited a park in several years and want to see the changes.

"Once they start doing minor tweaks, it should increase attendance," said Routh, who owns shares in Cedar Fair. "They'll want to go again like a new ride at Disney World or Epcot."

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