Stuck Between a Rock & a Hard Place: Hard Rock Park is For Sale
Published: November 3, 2008 at 10:53 AM
According to the Sun News in Myrtle Beach
, Hard Rock Park has put itself up for sale.
The $400 million theme park that opened last spring shut down for the season in September as well as filed for chapter 11 bankruptcy protection. If a buyer doesn't come forward to purchase the park for an undisclosed sum it will remain closed for the 2009 season.
Given the current economic situation there may not be too many takers for the park. Cedar Fair and Six Flags look like unlikely suitors given how stretched their budgets are. Could Herschend Family Entertainment or an international firm make an offer?
Published: November 3, 2008 at 12:55 PM
I've heard a couple of versions of this story. The story with the whole severance thing has been denied by the park. The park is indeed for sale, yet different reports say different things about whether or not it will open if a buyer isn't found.
Herschend is a possibility, they did just close Celebration City in Branson in favor of developing "other entertainment" on the site (more shopping malls likely). Perhaps there was another reason for closing it. Their brand may fit nicely in Myrtle Beach, given that they have experience operating parks in high traffic tourist destinations.
I've also heard the name Blackstone thrown around recently...
I'm having a hard time wondering why they are giving up on this project so soon. I realize that a lot of money is involved here, but I'm telling you that this place will fly high if the proper steps are taken. Any investors out there care to take a chance?
Published: November 3, 2008 at 2:13 PM
We need to band together and make it TPI's Hard Rock Park. Robert, can you take point on this effort?
Published: November 3, 2008 at 2:04 PM
I think even with the current economic climate Hard Rock Park isn't too bad an investment. Anyone who does come in will have to be able to dedicate a lot of resorces to this project and a lot of capital will be involved. Losses may be faced in the next two years but with some patienece I see this being a highly profitable park in years to come.
One thing for sure is that the marketing for Hard Rock Park needs to be a lot better. Outside of the local area there was little to no advertising. More should be put into advertising so it reaches more people and appeals to all market segments.
However, I agree that we should all chip in and make thia Theme Park Insiders Hard Rock Park!
Published: November 3, 2008 at 3:30 PM
No, no, no.....
First no support for 3.0 million visitors- none! .750-1.25 million max. People GO to the beach in Myrtle Beach.
$400 million investment is WAY TOO MUCH (the place is huge with HUGE concert facilities and really not that many rides)-forget about the per cap numbers you would need to support the build-out cost, even at 3.0 million visitors (think Universal/Disney merch numbers and Disney Paris's F&B percaps together).... throw in the costs involved in the rights fees for the rides- THAT alone skews any normal/logical operating model, add a healthy dose of economic reality and the whole thing is in shambles.
No one in the industry (who understands the economics of a theme park ) gave it a chance at the current model....there is NO shoulder season there of any consequence and those potential guests that are there are older and not families looking to ride a coaster
UGH! .....run unless you can get it pennies on the dollar.
IF it opens in '09, it won't be with the current management or ownership group and it won't be the same business model at all!
Published: November 3, 2008 at 4:07 PM
People go to the beach in MB, but you don't think that they go other places too. Doesn't Orlando see Daytona Beach visitors.
The demographic that you speak of is not the older people who go for the winter, it's the younger crowd and families that start coming by the millions in April and stop in August, the weekenders who come from March to about October, and the regional theme park market that has barely any competition. You are nuts if you think a place that sees 10-15 million visitors a year (most of them families) can't support a well run theme park that can market itself. Experts can analyze numbers and denounce all they want, but I know that town, and I know who goes there because I'm surrounded by them. All HRP had to do was market in Ohio, Pennsylvania, Michigan, West Virginia, Indiana, and a 250 mile radius.
Fix the marketing problem, lower some prices a little, be very nice to your season pass holders (lots of perks), have lots of special events and a concert series (this is Hard Rock Park after all), and develop more attractions. Get people in the gate, even if it costs a little more up front, because you can't have their money if they aren't inside the gate. It will be made up on the back end, and people will return year after year if the park is kept fresh.
Published: November 3, 2008 at 5:38 PM
How about Disney takes it and makes it a music park? I want Disney or Universal to take it. Too much good is in that park for it to remain closed
Published: November 3, 2008 at 6:10 PM
If anything Disney will buy Bush Gardens and Sea Word, where they can actually work with those themes and "Disney-fy" it....there is not enought at Hard Rock Park to make it a decent Disney Park...people complain about DCA, imagine Hard Rock Park...I personally think an entire park themed to music is boring and repetitive
Published: November 3, 2008 at 7:20 PM
Derek, you pretty much described exactly what any idiot with a working copy of Rollercoaster Tycoon would have prescribed for Hard Rock Park.
And it's all absolutely, 100 percent accurate.
The most damning thing for HRP was their complete and utter inability to adapt when what they had wasn't working. The park opened with a 50 dollar base ticket. No discounts for anyone were apparent. No kid ticket. No senior ticket. No military ticket.
And surprise! No people in the park.
The lack of crowds were there on DAY ONE. That should have set off a warning light. The crowds weren't there throughout the Sound Check period. When the park "officially" opened, there still weren't any crowds. The Eagles/Moody Blues concerts may have boosted attendance, but it was a one day affair only. I have pictures of the Led Zeppelin preshow room with only four people in it. On a Saturday in June. And it was around 11:30.
If the warning light went off on day one, the "OMG This is NOT working" klaxons should have been blaring by then.
There was a Carolina discount program put into effect (either the month of June or July, I forget), but their marketing budget must have already been absorbed. We didn't hear much about it in Columbia (a mere 2 and a half hours away). They did eventually introduce a child ticket, but it was too little too late. They wasted valuable marketing time introducing the pointless "if you're not having fun in the first half hour, you get your money bacK" promotion. It didn't work.
The only way to get people in the park was to lower the gate price. Simple stupid math. It's better to have 1000 people in the park who paid $30 to get in than it is to have 500 people in the park who paid $50 to get in. Plus, the 1000 people have an extra $20 they can spend in the park on the (overpriced) food and beverages. Oh, you'll also be able to keep some of that money in the registers if you have the foresight to send people home when the crowd isn't there. Wandering the park on any given day, you could easily count at least 20 to 30 employees who really had nothing to do. Send them home for the day. You just saved a LOT of money. Keep some of them on call, but don't pay them to stand around.
But this is all Monday morning quarterbacking. We'll never know the answer, because it never happened.
I met a few of the upper-level guys at HRP. They all seemed like really great guys who had really great visions for the park (and, I sincerely hope none of them were the person who sent that email to Robert earlier this year). But there were basic problems with the park that they either couldn't or wouldn't address. And I hate that. I wanted these guys to succeed. I wanted this park to succeed. But for everything three things they got right, they made a fundamental error somewhere else.
I was in the park on opening day and I loved it. Even on my eighth visit (on closing day, not that I knew it at the time), I loved the park. I'd love to have it back. But it doesn't look like this is in the cards.
Published: November 3, 2008 at 7:51 PM
While you make many good points, you should try to do accurate research. While the park may not have offered many discounts, there were discounts available. There were discounts for North and South Carolina residents, military, and for families of 4 or more.
I really hope someone buys this park and keeps it open. There's too much good in it to let it go to waste. Hopefully the buyer keeps the theme going too. It's a good theme that a lot can be done with.
Published: November 3, 2008 at 9:05 PM
Pretty sure I spent a whole paragraph talking about the discounts. Those discounts weren't available from the beginning. The Carolina Resident discount was horrible advertised and was only for one month. The family of 4 discount was junk - they tried that before they finally realized that they needed a children ticket.
When the park opened, there were three options. An annual pass for $150, a regular day ticket for $50, or the "VIP ticket" for $200.
Like I said above, they did offer discounts but they waited far too long to institute them. I think their inability to get those realized sooner cost them a lot of business.
Published: November 3, 2008 at 9:35 PM
I like the Hard Rock concept. It's creative, and it seems to lend well to a park. I bet though, that the license for the brand is costing them quite a bit. What I don't know is what exactly that license entails. Does it cover merchandise, or does HRC take a cut of that as well? The park uses several classic rock and pop songs on rides. Typically the owner of the publishing for the song would collect royalties or a fee of their own for the song's use, not to mention a fee for those who own the images and likenesses of several rock legends used in the park. Are the songs and likenesses covered under the HRP license? If not, than it's costing them more to even open the park. That being said, I would not be surprised to see the Hard Rock brand and music theme gone next year if it has a new owner. If Blackstone buys, it may stick around, but if a smaller company purchases the park, I just don't see it being there.
It's interesting that the Hard Rock Corporation seems to have pretty much stayed on the sidelines throughout this whole thing. I know that they've collected their money from the owners, but it is their name on the sign. Call me the devil's advocate, but I know that if it were my brand, I would be asking a few questions, and perhaps...seeking out new management if the current management isn't working out.
I have played plenty of RCT in my time. Isn't it funny how the fairly simple principles of that game really do apply in this situation. Then again, I find that most problems in the business world can be boiled down to fundamentals and common sense. In this case, even though the economy was down, the market is ripe. The park is well built and entertaining, so the management plan, execution, and contingency were flawed. Coupled with the economy and cost increases across the board, it made for a colossal failure.
The good news is that it's fixable. I really hope that they open next year.
Published: November 5, 2008 at 7:08 AM
Lets see Disney take over HRP..not likely...But i am suprised that Hard Rock Company hasnt stepped in...and ponnied up! It is their branding here...As far as Disney taking over Seaworld..again not likely...Fl goverment has placed anti monapoly law which blocks that...And they need to fix whats wrong at home first before then..But enough on that Hard Rock is a great park..And needs to reopen for 2009. And let someone who knows how to make it work do their magic...
Published: November 6, 2008 at 8:21 AM
I must be nuts! 10-15 million visitors (iffy number at best- that's a 50% margin for errors) can't support 3.0 million visitors to an amusement park built in area that is 29 miles long with 10 major points of egress, built in support of the beach environment and the golfing community. During the shoulder months, Dad is NOT golfing while the kids are at the amusement park- Some visitation during normal shoulder months occurs, but it is not so much the 4 day weekend visit, as much as it is a quick trip to the beach.
I'll bet the 'rights cost' for each individual ride/attraction and the HR name is SIGNIFICANT-probably a flat fee based on the 3.0 million visitor figure which skews any sense of reality.
Marketing is an art with a lot of science to back it up-it is EXTREMELY difficult to get the mix right, even in the best of times. Start-ups intensify that difficulty-nobody gets it right, not even the big boys, in the first year...
Can it survive? - sure... buy it pennies on the dollar, renegotiate the rights deals, expand the marketing and partnership agreements, practice better intercept marketing techniques, get off the idea that it is the 'hippest' place on the planet, and moderate (family-ize) the message.
....but then again, you might just want to be the THIRD mouse to get the cheese...
Published: November 6, 2008 at 2:54 PM
Like I said, you are nuts.. The number of visitors varies between 10-15 million in any given year...usually around 14, and can be more. Golf season is there in some form or another all year long, but mainly in the spring and fall. The peak months see pretty much nothing but families, not retired people who play golf. Springtime also sees spring break kids, high school graduates, a large motorcycle rally, and early vacationers taking advantage before hotel prices go up. Fall sees another bike rally, late vacationers and weekenders taking advantage of hotel price drops, and Halloween. Did I also mention that 300,000 people live in the metro area and the only two parks within any stretch of the imagination are Six Flags Georgia and Carowinds? Certainly out of a 200 mile range and a huge tourist base from the mideast/west, a good entertaining operation with a sound marketing strategy can get at least 4-5 million. Yes people go to the beach...alot, but how do you explain 6 large shopping malls, dozens of nightclubs, waterparks, museums, a load of minigolf courses, and the numerous other attractions all over the surrounding area. Why haven't they failed? Because people don't stay on the beach all week.
You and I do agree on one thing, management dropped the ball. They probably payed a pile of money for the licensing, but the problem was with the marketing and day to day money management, not the concept and design, and not the market itself.
Business school numbers and terms can be thrown around all day, but the bottom line is the theme park business isn't just money, it's about entertainment. If you have an entertaining product, it will sell...provided the market can support, people know it's there, and you can manage money and secure investors. In this case, they have an entertaining product and a market, but the business side just didn't happen.
Published: November 6, 2008 at 7:46 PM
Yes, a business model has to be based off of business-school basics. "Show business" means you had better understand the business if you want the show to continue! There is no way to 'force' a good concept to be profitable and stay in business just because it is fun or cool or both...that's the kind of thinking that sinks themeparks and entertainment venues all over the world.
Those millions of tourist you talk about from Ohio and other points north, east, west and south PASS BY other themeparks on their way there, or go to their local themepark first, then they go to the beach.
A 300,000 local market is darn near insignificant in the real world. Look at the demos of those 300,000- old people (playing golf year round), beach folk and suppliers/service people. They generally either don't have the money or the desire to go to a themepark.
850,000 to MAYBE 1.1 million max in that market at $30 average maingate and $10-12 other percap with reduced or no royalty payments. 120 day operating season, aggressive intercept marketing and good, developed relationship with the local CVB who believe in the product and will support the shotgun/nationwide marketing campaign.
Any more info and I'll have to charge you....
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