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Finance: Cedar Fair lowers revenue projections |
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Posted at 6:50 AM EDT (1050 GMT)
 Sep. 9th, 2006 --
Cedar Fair L. P. lowered its 2006 earnings forecast due to falling attendance and other factors.
Cedar Fair has announced that they have lowered their full-year revenue expectation of between $835 million to $855 million to their new estimation of $815 to 835 million. This estimate includes the newly acquired Paramount Park operations.
According to the company, the expected EBITDA (earnings before interest, taxes, depreciation and amortization) is to be between $285 million to $305 million.
The company also reported that attendance at its park through the Labor Day weekend had decreased 1 percent to 10.4 million guests from 10.5 million a year. The company blames tough economic situations for the lowered attendance.
Cedar Fair also announced plans for the addition of a new roller coaster at Cedar Point. Related story: Cedar Point announces Maverick For further information, visit Crain's Cleveland Business.
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Hank
Joined: Aug 2001
Posts: 850
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Here is the story from the Toledo Blade...
Article published Saturday, September 9, 2006
Price cuts fail to aid some Cedar Fair parks
By JON CHAVEZ
BLADE BUSINESS WRITER
Cedar Fair LP, which cut gate admission prices at several of its amusement parks this year, said yesterday that combined attendance through Labor Day at the same parks it owned last year dropped by 100,000 visits or 1 percent.
Even though attendance dropped, a spokesman said the Sandusky amusement park company was happy with its price cuts but hadn't decided what its prices will be in 2007.
"We feel it really worked well. It didn't increase attendance as we hoped, but we were only down 100,000 visits," said Stacy Frole, Cedar Fair director of investor relations.
"With the economy, gasoline prices … we think it actually helped our attendance. We definitely feel it was the right decision this year."
But Cedar Fair, which owns Cedar Point, 11 other amusement parks, and five water parks, also reported that average in-park spending by guests and revenue at its off-site hotels and restaurants were flat. Besides lower admission prices, the company cut some food prices.
The company expects full-year revenue of $815 million to $835 million, down from a July forecast of $835 million to $855 million. Last year, the firm had $569 million in revenue, before it bought Paramount Parks Inc. sites in June.
"We tried a number of new marketing initiatives during the season, some of which worked well," Richard Kinzel, Cedar Fair chairman, president, and chief executive, said in a statement.
Industry watchers this year focused keenly on the pricing structure. While Cedar Fair was lowering tickets by $5 at Cedar Point and Knott's Berry Farm, rival Paramount kept prices steady and competitors Six Flags Inc. and Disney Inc. raised prices.
Gary Slade, publisher of industry newsletter Amusement Today, said Cedar Fair officials believe their price cuts helped.
"When I spoke to them they said they were still happy with their decision," he said. "I would anticipate that they would carry that program through for next year."
However, Dennis Speigel, president of International Theme Park Services Inc. in Cincinnati, said Cedar Point cannot keep its prices low, especially after spending $21 million for a new roller coaster to open in the spring.
"You can't put a coaster of that magnitude in and not raise prices. You want to see a bump in attendance of 3 percent or 4 percent when you put in that kind of attraction, and when you spend that kind of capital, you've got to promote it. That takes money."
I knew it would just be a matter of time until the well started to dry up. I don't care what any politician says, there's an awful lot of poor people in this country who used to have enough cash to go the parks - they simply can't afford it all anymore.
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| 9/9/2006 7:09 AM |
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I love DW
Joined: Jun 2006
Posts: 1964
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How is Cedar Fair's parks dropping in attendance when alot of other parks are getting more and more visitors if it's tough economic situations? Why does this not effect some of the other parks like Dollywood and Holiday World.
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| 9/9/2006 3:35 PM |
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CoasterDJ
Joined: Mar 2004
Posts: 573
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Maybe those parks - and I am just out in the blue here - dont rely quite as heavily on travelers from outside it's immediate area as much...so they dont feel the pinch quite as tightly as others do. Just a possibility.
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| 9/9/2006 4:40 PM |
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coastrfreak2000
Joined: Jan 2006
Posts: 794
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^Yeah, Cedar Point's location has alot to do with it. For example, PCW always has crowds due to it's location in a region of over 3 million people.
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| 9/9/2006 6:35 PM |
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