Attendance, Revenue Drop at Six Flags

August 11, 2022, 10:51 AM · The Six Flags theme parks reported that its income dropped 36% in the second quarter of 2022, driven by a 22% decline in attendance during the three month period ending July 3, compared with the same period one year earlier.

The drop defies industry trends toward higher attendance this year when compared with the spring of 2021, when many communities were just emerging from pandemic lockdowns and many parks were operating under capacity restrictions which have since been lifted.

Six Flags reported cumulative attendance of 6.7 million visitors in Q2 2022, down from 8.5 million in the same quarter in 2021. At the same time, guest spending increased year over year, up 23% to an average of $63.87 per visitor. That increase was driven by a 27% increase in admission spending per capita, as Six Flags transitioned from open-ended memberships to fixed-length seasonal passes and more daily ticket sales.

"This is a transitional year for Six Flags, as we reset the foundations of our business model to focus on delivering a premium guest experience, while at the same time, correcting for decades of heavy price discounting," Six Flags President and CEO Selim Bassoul said. "Our guest satisfaction scores are well above 2021 and our guest spending per capita has increased more than fifty percent versus pre-pandemic levels. We believe our initial progress validates the potential of our new strategy, and provides a very healthy earnings base from which we can grow."

The company reported $435 million in total revenue for the quarter, down 5% from the previous year. Net income was $45 million, down from $71 million in Q2 2021, with an Adjusted EBITDA of $155 million for the current quarter, down 9% from the prior year.

Nevertheless, Six Flags - like Cedar Fair and SeaWorld - is continuing with a share-buyback plan, spending $96.8 million to buy back 3.5 million shares of its common stock. Six Flags plans to spend an additional $134.9 million on buybacks in the months ahead. Companies engage in stock buybacks to boost the stock price to the benefit of shareholders, including senior management.

However, it ain't working. As of posting, Six Flags shares are down 23% from the previous day's close, following today's financial report. Today's share price is down nearly 58% from Six Flags' 2022 high, posted in February.

Update: Here is the Six Flags investors call transcript, featuring plenty more from Bassoul.

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Replies (13)

August 11, 2022 at 10:58 AM

This is a tough spot: they pissed off their core customers by raising prices, pissed off Wall Street by losing money in a quarter that everyone else did well, the CEO seems to have pissed off his employees with his personality and layoffs, and on top of that they still have a reputation as trashy/poorly ran parks. The sad thing is Wall Street is going to look at this and think the strategy they had before: offering an experience even worse than Spirit Airlines and putting ads up everywhere is the profitable way to go, and asking a little more for season passes while giving a better experience doesn’t work. They will totally forget that strategy was imploding and led to the company going bankrupt and may again further down the line.

On the surface I don’t think a 5% decline in revenue is that big of a deal, afterall a lot of those people in previous years were bring a friend for free/half price, and season pass prices were totally ridiculous (I bought an SFOG AP a few years ago that included parking for $50). SF has been a sh*tshow for over two decades now so its going to take years, not months, to regain reputation with the public. Look at Hyundai for example, they make great cars for the money but many people still think of them as chintzy low quality k-cars that fall apart with low mileage. It took them 5 years of being at the top of their game to start to sway opinions and even then older generations still think they are crap. The fact that revenue is down while they try to fix their image isn’t surprising or alarming to me.

The problem I see is that they are not actually fixing their image, with the higher prices the parks poor maintenance and operations make them seem like even more of a ripoff and the mass layoffs are just going to compound the issue long term.

Also the telltale sign of a dysfunctional company is when they are hiring external CEOs, and in Six Flags case not only do they keep hiring CEOs from different companies, they are all from totally different industries. Mark Shapiro was a TV programming guy, Jim Reid Anderson and John Duffey were health care supplier guys, Mike Spanos a junk food guy, and now Selim Bassoul was in kitchen equipment manufacturing. So what exactly qualified these people to run this huge chain of theme parks?

This is a tough industry especially for seasonal parks which are guaranteed to lose money for more than half of the year (and often even for swaths while they are open due to bad weather or other unforeseen circumstances). These guys they keep hiring don’t know anything about the history, trends, where the bodies are buried, who the good and bad suppliers/vendors are, how to spread the money out throughout the year, why things happen the way they do, etc. In order to be setup for success as a CEO of a theme park company it takes decades of experience working in the business to learn all of these things.

I don’t hate any of these people personally, but it takes more than just saying common sense to successfully run a business. I sincerely hope whoever SF hires next is someone that could best be described as an “inside outsider,” someone who grew up with the company (or at least the industry) but disagrees with the way it’s ran and has the knowledge and skills to fix it.

August 11, 2022 at 11:35 AM

When people complain about how Disney is driving guests away with magic key shell games, mobile ordering, cutting MMH; etc., so often the response is: "Well, the parks are packed, so people must be fine with it!"

Not quite. Disney has built up generations of goodwill, to the point where people like me almost instinctively plan Disney trips. I'm going there this fall despite being royally ticked off at many of the moneygrubbing changes they've made.

But I'm not going two or three times this year, like I would have in the past. And if Disney keeps going down this "rich people only" path, I might not go next year at all.

I raise that because the end result is what Six Flags is experiencing now. When I was a kid my family had Six Flags season passes, we loved it. But over the years as it's gotten dirtier, less guest-friendly, more dangerous and just all-around less pleasant, we stopped going. Today I wouldn't set foot in a Six Flags. And what is Six Flags to do? How can they ever convince me to start visiting again?

Goodwill is a very fickle thing. Corporations have it until they don't, and when it goes, things can spiral down quickly.

I say to Six Flags: good riddance. They took what used to be family-friendly, affordable parks and ruined them.

August 11, 2022 at 11:50 AM

Disney gets a ton of international visitors...while Six Flags has a huge demo of teens. If prices are raised, that's one demo that isn't going to break the bank to go.

August 11, 2022 at 12:27 PM

When I first moved into the LA area from Florida I always wanted to go to Magic Mountain. Then everyone out here all told me the same thing. It's aimed at teens and it's not well kept, and basically totally unfamily friendly. I never went.
I used to visit Disneyland regularly here but honestly, they've priced me out of visiting again. You do not get your money's worth.

August 11, 2022 at 1:16 PM

Magic Mountain can be delightful on the right day - during winter with cool temps, partial cloud cover, and school in session. Whatever the newest restaurant is usually is sneaky good for its first season or so, too. And ride ops are usually (but not always) better than Knott's. But Magic Mountain on a bad day, with brutal summer heat, crowds and inconsistent ops, is something that will make you swear off the park for a long, long time.

August 11, 2022 at 2:38 PM

Not the greatest numbers for sure, they shouldn't be that low this year compared to last year. Guest spending is up, but why is it up is the question? Everyone is spending more money everywhere this year whether they like it or not, and what is the metadata behind the attendance drop? Who's not coming as much as they were? If it's large amounts of unsupervised teenagers with their babysitter of a season pass who aren't coming as much, then it's not a bad thing. If it's families and others that spend lots of money pulling back, then not a good thing.

After all this time, the problems at Six Flags seem to be the same old ones they've always had, operations and guest experience. The economic good times of the past 8 years or so in America (save 2020) along with the cheap money that was available are no longer here to provide cover for these flaws. They are going to find themselves right back where they were when they went broke if they don't finally go straight to the heart of the problem and fix it.

August 11, 2022 at 3:28 PM

I think it's exactly what Robert said — and that problem is largely one I've experienced chain wide. So, how much risk are you willing to take for a bunch of good to great roller coasters (depending on the park)? And in a crowded market like Southern California, why would you even take that risk if you have so many other, and better, options? Maybe you'll go once every few years to check out the new coasters — but more than that? Why?

In fairness, I feel this way about Knott's, too, albeit to a lesser extent. I go to Knott's once a year for Scary Farm ... and I go on the coasters then. But while things are slightly better from a structural standpoint (they are less likely to say, "we're only running one train on all our coasters today. Deal with it." The park is still run like a K-Mart. Why would I go there when I could just spend more money and go to Universal Studios or Disneyland and not have to deal with the risk of a mediocre day?

These chains have solutions to these problems but they are not particularly interested in taking them.

August 11, 2022 at 5:37 PM

If there ever was a park chain that was getting worse press than Disney, Six Flags is it. Even so, it is amazing that their profits are down in a quarter that every other major chain is reporting record profits.

August 11, 2022 at 9:02 PM

Unfortunately, I don’t think SF management has a clue what’s going on or how to fix it. We’ve visited 4 different SF theme parks so far this year, and they’ve all been bordering on empty (12 days). The only SF park that’s been remotely crowded for us has been Hurricane Harbor Arlington.

I really think SF has lost touch with their core audience and has been trying to make money without spending any. Many of their new attractions have been delayed, giving few core customers a reason to visit, and the same old problems have persisted, so even if you don’t need a new ride to prompt a visit, there’s very little reason to go.

August 12, 2022 at 1:59 PM

Bassoul said that the company thinks it lost 1-2 million visitors just from dropping the all-you-can-eat cheap dining plan.

August 12, 2022 at 11:07 PM

I’m not surprised and as somebody noted above, it’s usually a park filled with teenagers. I though there has been a rise of rowdy kids and fights occurring at these parks?

August 12, 2022 at 11:20 PM

As someone who had many family members work for the company: Six Flags wasn’t making any money with the Dining Plan. Everyone took advantage of the plan to the point that many venues were reporting negative sales. So with or without it, Six Flags would have still lost money. Plus, targeting only teens would have backfired at some point because, more so than Knott’s, it was just a dumping ground for teens to be babysat by other teens who worked at the park.

August 14, 2022 at 10:44 AM

i grew up going to SFOT in the 60's and 70's...they really were trying to emulate the disney model back then. i remember visiting in '82 when the cliffhanger first opened and realized they were on the thrill ride hunt. then time warner happened and the parks have never been the same.

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