Attendance and revenue dipped slightly at Cedar Fair's theme parks in 2023 compared to the year before, despite a strong fourth quarter for the amusement park chain.
Cedar Fair - which owns Knott's Berry Farm, Cedar Point, Canada's Wonderland, Kings Island, and other parks across North America - reported attendance of 26.7 million guests in 2023, down slightly from 26.9 million guests in 2022. Revenue was also down in 2023, to $1.80 billion compared with $1.82 billion in 2022. In-park per capita spending was down 1% for the year, to $61.05, partially offset by a 5% increase in out-of-park revenues, to a record $223 million.
However, Cedar Fair also reported a record 5.8 million guests in the final four months of 2023, an increase of 9% over the same period in 2022. However, in-park guest spending also declined, to $58.61 per person, due to a shift in attendance to guests on lower-priced tickets.
The company also reported a loss of $10 million for the quarter, driven by $17 million of transaction costs related to the proposed merger with Six Flags. For the year, Cedar Fair reported net income of $125 million, down from $308 million in 2022, when the company sold the land at California's Great America.
"Since announcing the proposed merger transaction in early November, we have been pleased by the strong support we have heard from unitholders and others in the investor community," Cedar Fair CEO Richard Zimmerman said. "We look forward to completing our combination with Six Flags and delivering on the compelling value creation opportunities ahead, which we believe are greater than what either company can achieve independently. Cedar Fair and Six Flags continue to work constructively with the DOJ in its review of the merger and continue to expect it will be completed in the first half of 2024. We look forward to capitalizing on the opportunities ahead for the combined company."
"I’m encouraged by the pace of our long-lead indicators heading into the 2024 season, particularly sales of season passes and related all-season, add-on products," Zimmerman said. "With unit sales of season passes through January up approximately 20% versus last year, we expect season pass sales to serve as a tailwind for attendance and revenues all season long."
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This is a perfect example of why parks are fun to be a fan/enthusiast but terrible to invest in. This is a 40 year old company, that most people agree generally is decently ran, that randomly lost $10 million in a year just by operating its business. I know it says the costs related to merging with Six Flags impacted earnings, but c'mon...
I think one of the causes of this was the really, really, hot summer, and I hope that parks have a plan for this because it won't be getting any cooler. It would be interesting to see how much more they are making from extending the operating season into winter.
@ the_man4: You probably just read the article fast, but Cedar Fair did not lose $10 million for the year. "The company also reported a loss of $10 million for the quarter, driven by $17 million of transaction costs related to the proposed merger with Six Flags. For the year, Cedar Fair reported net income of $125 million, down from $308 million in 2022, when the company sold the land at California's Great America."
@ Russell: I agree with every word that you typed. It certainly appears that the "revenge travel" demand has been satiated. Without capex investments, 2025 and beyond could experience a real malaise across the sector with a merged SF and CF perhaps experiencing disproportionate percentage of the declines. I fear the merged company will take a while to figure out what they intend to do with some of the park inventory because not all of the parks will survive in the merged company as some will undoubtedly be sold or perhaps even closed. It's hard to make investments in assets you aren't sure you will own in a a few years. I am sure that Cedar Point will milk the relaunch of TTD, but there isn't a ton to get excited about within the chain (or really many of the major parks). Universal's attention is focused on their third gate, WDW and DL are relaunching their own refurbished rides as the "big addition" for 2024.
Kabletown must be a bit concerned about opening up a multi-billion dollar destination park during a time of flat demand in a struggling, overbuilt Orlando area market. The park should do gangbusters business out of the gate, but will they be able to maintain attendance without pricey annual investments? And will the company be able to avoid cannibalizing attendance at the company's existing parks? It may have been a better idea to bulk up the existing parks and charge guests more for 5 day stays rather than attempting to extend those stays to a full week.
“delivering on the compelling value creation opportunities ahead” is some serious high quality PR jargon for the corporate earnings announcement bingo card.
@MLB - I think it really comes down to how the combined Six Flags/Cedar Fair view their current combined assets. You would think they would have already performed that analysis before closing the deal, and would have a road map in mind, though there's been little indication of that beyond speculation from outside observers - you can see the writing on the wall for a number of parks that were underappreciated by their parent company, but one man's trash is another man's treasure.
Given the current climate, I think the combined company needs to move fast. If they're going to consolidate, those decisions need to be made pretty quickly(4-6 months), or you're going to end up with a bunch of angry customers wanting to know why they're investing in season passes for parks that won't operate beyond the end of this year. Again, that's where some of the language coming from this report is concerning, because it is not very customer focused. Six Flags/Cedar Fair cannot take their existing customers for granted, and understand that their passholder base is going do nothing but shrink if they randomly close parks and change terms.
It's been eerily quiet from both companies - this is coming from a long time pass holder/member of both chains - and I wonder if the transition team responsible for merging these two companies knows what they're doing.
2023 was simply not a good year for Cedar Fair. Not only did the chain have a third year in a row of less capital investment than they've traditionally been known for, but they also had a lot of those new attractions open unseasonably late and/or perform poorly in addition to a number of high profile closures during peak periods. Add in the higher ticket and season pass costs, and it's not surprising to me that attendance suffered.
Fortunately, the outlook for 2024 does appear to be a bit better, both because they've got stronger capital projects and because they've restructured their passes to make visiting more affordable. With the merger pending, I do think it's too early to forecast the future of either company, but based on my experiences throughout 2023 and looking at what everyone has in store for next year, I'm definitely feeling a bit more positive toward Cedar Fair than any of the other regional park chains at this point.
@AJ - I'm not nearly as optimistic about 2024 as you. While the capital investment into the parks is higher than 2023, it's still not where I think it should be to reverse the trends from last year and the overall dip in demand across the industry. So far, here's what's coming to Cedar Fair (not Six Flags) parks in 2024...
KBF/KI - Revamped kids' areas (and Knott's hotel)
CP - TT2
Dorney Park - Iron Menace
Canada's Wonderland - Waterpark enhancements
KD, Carowinds, Michigan Adventure, WoF, Great America, and Valleyfair - NOTHING
TT2 and Iron Menace are pretty big expenditures, but the rest of the "new for 2024" lineup is pretty weak with over half the chain getting absolutely nothing this year. If Cedar Fair is counting on their 2024 capital expenditures to promote growth, they better get on their knees and start praying, because they'll need a divine intervention for those 5 main investments to make any sort of dent in the current trends, not only in this chain, but in general theme park demand nationwide.
I would agree that it's too early to tell what impact the merger will have on the combined chain, but I think that it's natural for merged companies with so much overlap to have tons of redundancies that will result in wasted costs and an eventual dilution of demand. If Cedar Fair/Six Flags doesn't have a strong plan to quickly address the issues that will immediately face the combined company, they're destined to lose significant profit in 2024 that's going to be tough to make up.
I view the merger as both companies getting what they wanted: Cedar Fair got huge successful parks in the Chicagoland and Northeast Megalopolis markets and Six Flags got more competent leadership. I would be surprised if there were any major changes to anything to with Richard Zimmerman running things, he seems more to be a very measured and "don't rock the boat" type leader than a transformational leader.
It will be interesting to see the dynamic of Zimmerman running the company and Bassoul being executive chairman of the board. Personally, i'm not a big fan of eithers tenures. It's hard to know what Zimmermans plans are, as he never does interviews, and the few he has done in the past are like one minute and he looks like he wants to beat the interviewer up. Bassoul on the other hand comes across as a complete tool and listening to him talk gives me headache. He also clearly has no idea what he's doing as evidenced by the ridiculous changes in the season passes multiple times a season every year he has been there, and somehow SF operations are just as bad if not worse than ever (which is saying a lot). TBH it wouldn't surprise me if these two end up hating each other and not getting along.
Russell, it should be noted that of the parks not getting something for 2024, three had a capital project last year (Carowinds, Great America, and WoF) and two have already begun construction on a 2025 project (KD and Valleyfair). I would also consider both the KBF and KI projects to be pretty major in scale and roughly equivalent to two or three of the 2023 projects in magnitude (in fact, it wouldn't surprise me if these, especially at Knott's, are higher budget than the coaster projects). However, I agree with you that it's probably not enough to save the company. My optimism comes less from the new for 2024 attraction slate but more from the fact that the new rides appear to mostly be ready to go at the start of the season rather than the June openings we got last year, uptime should be better this year with a proper offseason at parks, a couple headliners that missed last season will be operational, and lower pass prices combined with seasonal events should drive more visits from locals.
Why does anyone, other than teens, want to go to these parks that are poorly maintained and rely heavily on roller coasters ? It’s not exactly cheap, the atmosphere is awful and the food is cardboard. Me thinks the drain awaits for many of these parks
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Yet another clear indication of tapering demand following 2022, which is more than likely caused by "revenge travel" following the pandemic-impacted years of 2020 and 2021. Couple that with few compelling new additions across the chain (and many other theme parks around the country), and you've got the perfect recipe for a flattening of demand.
Theme parks will need to start getting their act together to rev up their development pipelines, or they are going to see these slight declines turn into malaise by 2025-26. With the increasing prices for EVERYTHING, theme parks have to continue to look to provide new, unique, and value-based offerings to get guests to spend their continually shrinking disposable income on their products.
I'm concerned by some of the language here from Cedar Fair that make them sound more and more like Six Flags and their "investor-first" mentality. Ultimately, this combined chain is still in the hospitality and entertainment industry that needs to put customers first above all else if they want any chance to grow and thrive in what is going to be a very tight and competitive market in the next decade.