Attendance, revenue rising at Six Flags amusement parks

February 14, 2019, 1:37 PM · Six Flags reported its annual financial results this morning, with the company taking credit for a ninth consecutive year of setting a new revenue record.

The company reported that overall attendance was up five percent, to 32 million guests in 2018. Note that the park added five parks during the year, as well as expanded its flagship Six Flags Magic Mountain to everyday operation during the year, which together helped drive the increase.

But guest spending and admissions per capita were up for the year, too, by two percent and four percent, respectively, so it wasn't just expansion driving the revenue gains. Six Flags guests' spending per capita was $42.58 for the year, with a breakdown of $25.30 in admissions per capita (up $0.93) and $17.28 in pure in-park spending per capita (up $0.04). Overall, Six Flags reported an eight percent increase in overall revenue in 2018, to $1.5 billion.

"I am very proud that we have achieved our ninth consecutive record year," Six Flags Chairman, President and CEO Jim Reid-Anderson said in the company's press release. "Our exceptional operating performance in the fourth quarter demonstrates the strength of our pricing power, membership strategy, and in-park spending programs, all of which, together with our domestic and international park expansion initiatives, will provide a strong platform for growth for many years to come."

Diving into the report, Six Flags reported that the number of people who have bought memberships or seasonal passes to its parks grew eight percent last year, and that the company spent $133 million in new capital projects in 2018. It also spent $23 million to acquire the leases for the five new parks, spent $267 million in dividends and spent $111 million buying back its own stock.

In addition, Six Flags reported "an unfavorable revenue adjustment of $15 million related to the company's international agreements due to delays in the expected opening dates of some of the parks in China caused by a challenging macroeconomic environment." In other words, the slow-down in the Chinese economy that Disney noted in its reporting on Shanghai Disneyland's performance is affecting Six Flags, too.

Let's take a look back at some of the new attractions that opened at Six Flags parks in the U.S. last year:

And if you'd like to compare Six Flags' performance with its industry benchmark, Cedar Fair reported its 2018 results yesterday.

Replies (8)

February 14, 2019 at 1:43 PM

This is really good news. I hope they celebrate by removing at least some of the in park advertisements the litter every nook and cranny of the parks these days. Corporate sponsorship - good. Uninspired, overwhelming visual clutter - bad.

February 14, 2019 at 2:35 PM

They spent nearly three times as much on dividends and stock buy-backs as on new attractions. Interesting priorities?

February 14, 2019 at 3:38 PM

They practically give away season passes for our local Six Flags park, La Ronde. $50 each when you buy two at the same time. We won`t turn down that deal.

February 15, 2019 at 5:13 AM

Robert, I agree with you that it would be better if they invested more. However, they invest 9% of revenue each year and that is not bad but I do think they are making a major mistake with Great Adventure. They have no shows in the summer. If they took advantage of their show locations and put on some good shows and added a couple more dark rides their attendance would increase significantly. Right now they are leaving the older market out. My wife and I love the safari and Fight for Metropolis but would like more. The older adult market is where the money is since family sizes are smaller and people are waiting to have children.

In any case, Six Flags continues to grow and should pass 35 million this year and more if they manage to buy some more parks. Their conference call was very interesting in that they did not promise high single digit dividend growth or how much stock they would buy back. They only promised low dividend growth and stock buy backs with whatever money was left after dividends and the 9%. That leaves open some additional money for expansion not yet announced.

February 15, 2019 at 7:34 AM

"They spent nearly three times as much on dividends and stock buy-backs as on new attractions. Interesting priorities?"

Welcome to 21st Century business. Stock buybacks have become increasingly common in today's financial climate, and a way for companies to increase value while reducing liabilities. When CEO compensation is based on year over year growth, stock buybacks are an easy way for them to reach their targets without having to actually grow their business.

I think the biggest takeaway here is that it appears that when you look at expanding operational calendars and the expansion of the chain, attendance is actually relatively flat (similar to what Cedar Fair reported). However, Six Flags has been more aggressive in generating revenue from their stable, but loyal fanbase, primarily through their Membership Program that was launched in 2017. I despise these programs that are pitched like an installment plan, but are more like NetFlix or other subscription-based companies. The bottom line is that members are required to pay during times when their home parks are not open, and will ultimately pay more for a year's worth of admissions through a Membership than they would by purchasing a season pass (even without the obscene discounts that SF occasionally offers). For Six Flags, it's obviously worked, because not only have they increased their per cap admission revenue (even though season pass and gate prices have remained relatively stagnant), but now they have a base of customers that will continue to provide guaranteed cash flow in perpetuity (once you're a member, you have to proactively cancel it). The cost of membership will soon be lost in guests' monthly bills, meaning those that enter the parks will forget what they paid for their admission and be more willing to spend for extras in the park (like Flash pass, upcharge attractions, and other "luxuries"). Also, having those costs lost in an increasing swarm of monthly charges on their credit cards will simply forget how many visits per month/year they need to take in order to validate the cost of the Membership.

Honestly, it's quite brilliant, and it's clear from this report that guests are falling for it. I personally, would never purchase theme park admission in this way unless offered no other choice, but Six Flags has definitely hit on something (Sea World has followed suit with a similar Membership Program launched last year).

February 15, 2019 at 8:59 AM

I have a membership and am happy about the benefits but I do agree with you that I would rather pay all at once for an annual pass with the same benefits. I was a long time passholder who was forced into a membership to get those benefits. I am also a stockholder in Disney, Six Flags and Cedar Fair. I have an annual pass at WDW and membership at Six Flags so I know the difference between the parks. Financially Six Flags is doing much better than Cedar Fair. They could do better and if they could get someone in charge of Great Adventure who cares about customers and growing their market. Great Advenure could dramatically increase its attendance and profits. The future of themeparks will depend on older adults still wanting to go to the parks and that means shows, safari and dark rides. There is lots of capacity in the parks during weekdays they could go after. Disney figured this out when they extended their Festivals to 7 days a week. It is the adult market that keeps Epcot's attendance up. Just think of how many adults there are with free time Monday through Friday in the Ocean County NJ area.

February 15, 2019 at 11:09 AM

I somehow got drawn into a FB group called Great Adventure Connoisseurs and it's obvious from the comments that many of these folks purchased memberships. They seem to be happy with their choices but personally, I'd drop dead before I purchased a membership. I oppose it on principle and get everything I need from Six Flags with a season pass that cost me $85. Considering the fact that I visit Six Flags Great Adventure, Six Flags Over Texas, Six Flags Fiesta Texas and Six Flags New England every year and this pass gets me into all of these parks, I see no reason to get a membership for a few extra perks and a lot of extra $.

February 17, 2019 at 11:12 PM

I could type out a long post explaining how stupid this is societally speaking, but I think Warren Buffet explains it best in simplest terms:
"When the tide goes out you can tell who was skinny dipping."

Trust me the membership crowd will get what's coming to them eventually lol.

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