Cedar Point is doubling its starting pay and offering sign-on bonuses as it looks to staff up the park for its 2021 season. At the same time, the park announced that it will be closed on Tuesdays and Wednesdays for the first four weeks in June as it looks to lessen the load on its current workforce.
Located an hour west of Cleveland, Cedar Point doesn't have a huge local population to help staff the park. As a result, Cedar Point long has relied upon college students and international workers to come to Sandusky, Ohio for the summer to work at the park. That typically makes the first weeks of the park's season in May a bit tough for smooth operations, as many workers have yet to arrive. But this year, with international borders mostly closed and a surge of openings nationwide allowing workers to be picky about the jobs they choose, it's been especially tough for Cedar Point to fill available positions.
As I wrote earlier this month, the unusual labor market right now is all about timing. With countless employers looking to staff up at once as the nation opens up from pandemic closures, workers have plenty of choices.
"The employers who are filling positions right now are the ones who are paying not just way above minimum wage, but offering pay way above their competitors'," I wrote. "They are offering flexible full-time hours, generous benefits and - most important - a positive, supportive and even nurturing work environment."
Cedar Point is trying to meet that standard with an aggressive wage increase.
"We've added more than 300 full-time, year-round positions - with benefits - to our food & beverage team, we've introduced a $500 seasonal sign-on bonus for associates and we're now increasing the 2021 seasonal and part-time wage for all positions to $20/hr, a 100% increase over 2020 wage rates," the park announced on its social media accounts today. And it's playing up quality of life issues, too.
"Associates enjoy the one-of-a-kind 'office' of Cedar Point as their workplace, complimentary tickets for family and friends, special events throughout the summer, the chance to forge friendships and learn new skills that extend beyond a summer job, all in effort to carry out Cedar Point's mission of making people happy," the park said.
To preserve a positive work environment, Cedar Point is planning to reduce its operating calendar in the month ahead, so that its current employees are not spread too thin trying to cover too many shifts.
"While we've ramped up these recruiting efforts, we continue to adjust our operating calendar based on the availability of seasonal labor. As a result, Cedar Point and Cedar Point Shores Waterpark will be closed select days in June."
Checking the calendar, the park is now listed as being closed on Tuesdays and Wednesdays for the first four weeks in June. Traditionally, Cedar Point operates daily in June and July, as families from throughout the Midwest roadtrip to the park for their summer vacations. But the last thing that any well-run destination wants to offer guests is a bad experience. So Cedar Point is making the tough call that it's better to cut hours than to cut service as it looks to entice more workers to the park.
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/\ Bingo, the fact that no international people have come to the country for an entire year has made not only made it so CP can't get them, but the fact that no other hospitality businesses around the country has been able to get people has created a compound effect. Everyone is competing for the same small pool and its pushing the supply and demand curve to an extreme.
That being said this is huge news for a lot of reasons. For the entire history of the industry it has been minimum wage or slightly over, for them to go to from $8 to $20 in just a couple years is absolutely nuts. Think of what it is doing to their margins. And not only that but they probably didn't get much season pass revenue this year because so many of them are carryovers from last year. I can just imagine the finance person sitting at the computer with sweat all over his shirt trying to figure out how to make this work and having to go to the CEO and be like "sir...our margins are down 50% this year and with us being closed two days a week our revenues are also way down from the pre-pandemic levels.
And not only that but the short term desperation will also wreak havoc on their long term business plan. Are they going to stay at $20 next year? Are they prepared to alter their business plan that much as a permanent thing?
I've never seen a big company just lower pay for an entire swath of its workers (maybe other than companies that were bailed out by the government and had to like GM). So they might just be stuck with $20 being the new starting rate forever. Maybe they factored that into their decision that kind of pay is just the new normal. 2020 was the craziest year in the history of the industry, but 2021 is easily the second craziest. I have never seen anything like this even in 2001 and 2008.
I will give them credit though in the other topic I suggested that they close sections of the park and limit capacity, I definitely was not expecting them to do this.
I am curious what kind of repercussions this is going to have for the park and the company as a whole. I was planning to visit on June 22nd & 23rd as part of a big trip I'm doing next month and spent four hours today reworking things. We're now only going for one day (June 20th), and some people who weren't meeting up until after that date will miss the park completely. I have other friends who are upset because their schedules are a lot less flexible and they now can't visit, including some who were planning their first trip to the park. Judging by the reaction online, I'm sure my friends and I aren't the only ones in this boat. It would have been far smarter for the park to publish a limited schedule to start and then add days later, because if a destination is known for reducing operating days with only a couple weeks notice, it could scare a lot of people from outside the region off from planning a trip there.
it's worth noting the word "margin" is a stand-in for "profit." perhaps an increase in wages will decrease profits (probably!) and perhaps it will lead to an overall loss (doubt it!) but might wanna think about why anybody other than a cedar fair shareholder cares!
This unprecedented $20/hour wage rate is only for seasonal and part-time workers and only for 2021. CP will likely go back to its previous rate (or something close to it) in 2022.
I've always had issues with the fact that the folks operating the rides might be making minimum wage or slightly above it. Yes, for a lot of these positions, these are seasonal jobs, but when it comes to ride safety (and food safety for that matter), I would prefer that the owners of the parks try to get better than average workers by offering better than average wages. Hopefully, we won't see a rise in accidents due to the shutdowns from the pandemic and the current need to just put a body into the spot because there's a shortage of workers.
As Robert and many of you have noted, this problem is not limited to just Cedar Point. Judging by the current shortage of food service workers (some restaurants in my area are restricting hours and closing additional days during the week), I wonder if the other seasonal parks are going to have to implement measures in hiring and operations like Cedar Point has done.
@Jacob - "Margin" (which is actually different from "profit" on an accounting ledger) is absolutely necessary to ensure profitability and long term viability of a corporation. A large company like Cedar Fair does use profit to distribute to shareholders, but margin is needed to invest into future improvements and to shift to other aspects of the operation that may need to cover losses (i.e. debt service, taxes, employee benefits, etc...). From a business perspective, shareholders and managers hold companies to a year over year comparison along with meeting expectations, which means as long as a company can beat the previous year's earnings and their own internal projections, they will be considered successful. Considering how little revenue was generated from theme parks last year, showing a year over year increase would not be too hard, which means that beating projections would be the only standard managers have to meet or exceed. That leaves parks in a bind where they need to do whatever it takes to meet the revenue projections made at the beginning of the year, and will do whatever it takes to make that happen, even if that means trimming "margins" to do it.
Cedar Point is definitely taking a calculated risk here, and even if they do intend to bring temporary and seasonal wages back down to pre-pandemic levels next year, they will have the same staffing issues next year, even if international workers are able to return to the workforce. Once the cat is out of the bag, it's hard to get it back in, and that goes across the board for all business (and governments) forcing wage increases for minimum wage and lower wage workers. Companies can get by in the short term with higher labor costs, but at some point those reduced margins start impacting other areas of the operation. In the theme park world, the only way to offset increase wage costs would be to increase per cap spending. The ways parks increase per cap spending is to create new programs/systems that encourage guests to spend more while they're in theme parks or to increase the cost of admission.
Prices are likely to stay stable this season as parks "hide" margin losses through write offs carrying over from 2021, but once baseline spending and revenue numbers are established as "post-pandemic normal", parks will hit the accounting reset button that will then force managers to start balancing their books.
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From the sounds of it, Cedar Point has been running on a shoestring staff the past few weeks. Rides have been closed or alternated operations throughout the day, and lines have been extremely long. Taking the unprecedented move of cutting operational days during the summer (peak season) signals rocky roads ahead.
I think the lack of international workers is really hitting Cedar Point hard. There just aren't a lot of people that live in the immediate Sandusky area, and nobody wants to drive 1-2 hours each way to work in Northern Ohio when there are other jobs with similar pay and benefits available (even with these wage increases and bonuses). Cedar Point needs those "captive" international workers that stay on-site in the dorms and can be counted on to work 40-60 hours a week because they have nowhere else to go. There just aren't enough local kids in the area to fill those spots or willing to commit to the hours that the international workers put in. Maybe Cedar Point should entice domestic workers with a "summer camp", where locals get to live in the dorms and work the same hours and jobs that the international workers do.
Cedar Point is cursed by its location, but is not alone in hurting without their international employee base. This might not be the best summer to trek up to America's Roller Coast.