Results for 10/11

[aussienetman]

At the village parks, attendance increased by to 4.9million (up from 4.5) Village confirmed they sold 825,000 VIP Passes but reported a decrease in sales revenue of 7%. Net profit for VRTP dropped by 25% Ardent parks also had an increase in attendance to 2.7million with a slight increase to revune (3%) People were spending less in park with per capita spending down to $30.90 (it was nearly $50 last year) Thoughts?

[BNErider]

By launching these cheap annual pass promotions, guests can return as many times as they want for no extra charge. They could literally visit everyday for 12 months and not spend a cent extra, yet are purchasing these annual passes for less than what two day passes cost. I think these results show that these passes are not a viable long-term business practice, as an increase in guests without an increase in spending shrinks profit margins, which may bring on cost cutting (which we have seen in the years gone by), eroding the value of a full day's ticket even further. But can the parks revert back now? I mean, who'd pay $60-70 for a day pass, when they could purchase an annual pass for just $30 more. I do think the parks are slowly trying to increase the cost of their annual passes, but I would like to see the cost of a daily ticket lowered to push guests back to purchasing one-day passes. Of course, they'd still need to be cheap enough to entice locals to visit more than once. A yearly pass for $150 still presents great value in my opinion. Of course, these changes can't happen overnight.

Edited August 19, 2011 by ash.1111

[joz]

Thoughts?

Yeah I have thoughts I'll start with the Ardent results because I think it requires the least commentary. Basically you see Ardent record an attendance increase of 30%, but an amazing drop in per cap spending of 20%. On the surface, that looks like DW had a huge year by giving away tickets diminishing revenue. While this is true of the Village parks (more on that later), the true story is that Ardent is including Sky-point in it's results this year but not last. That explains the huge jump in attendance, and the incredibly low per cap spend. Based off the vagueness of their reporting, I think it's fair to assume that DW/WWW would have been flat at best, but more likely down last year. Given the timing of the wet weather, lack of new attractions and fierce competition that isn't a huge surprise. Village is the interesting set of results this year. Attendance is up to 4.9million, which is a record, so I'd suggest right there that the weather wasn't a major factor in the decline in revenue. Total sales revenue declined by $20million, however EBITDA was only $8million lower than last year, and despite the decline, this is their second best result ever. Anecdotally, AOS and PC were flat at best between them, so all of that upswing in attendance is at the theme parks proper; SW, MW, WnW. The obvious thing here is the VIP passes, 825,000 sold, (up on last year), resulting in huge attendance but a decline in revenue. So basically guests aren't spending money in the parks, and it is this which needs addressing. Personally, I'm a fan of picking the low fruit, which in this case is Food and Bev. It's overpriced, bad quality and the outlets are inefficient. Fix these 3 (or any 2) issues and I think they'll be a long way towards fixing their in park spending problem. I also think they are giving away money to domestic tourists, who buy VIP passes when they were going to be visiting all the parks anyway, so making the passes more expensive to interstate/international tourists would be a good move IMHO. Finally, I think the tickets need to be tiered. While they've started doing that a bit this year by giving away more stuff for VIP Gold pass holders (early entry, express entry) I think they missed an opportunity by not taking stuff away from the cheaper tickets, and not trying to use the expensive tickets to drive in park spending. I've discussed this before, and suggested how it might work in a previous post, but just to remind everyone, here is how I think a tiered ticketing system could work:

VIP Pass: No block out dates and 10% discount on f&b and retail, plus one free entry to Halloween and Christmas (pre booking essential) IP Pass: Blocked out over expected busy periods, 10% discount on F&B and retail P Pass: More block out dates than the IP pass, no discounts on in park spending. $99

The biggest benefit to this are you're still going to get the people who only want to buy the cheapest pass available and not spend any money in the parks, but they won't be overwhelming the parks when they're already busy. It would also mean that those cashed up tourists wanting to visit the parks over the holidays would be required to buy the more expensive pass (which is still cheaper than visiting each park, which they were going to do anyway so they'll buy). It would also encourage people to spend money in park, which this years results have shown is what they need to be doing. All these incentives to buy the most expensive pass, and you don't need extra staff to operate the rides for an extra half an hour on the weekend or a dedicated entry turn-style. As for the rest, MW are opening a new major roller coaster. If you're unsure what this means, remember what country you're in when reading this. Jet Rescue and Mick Doohan's Motocoaster are both major roller coasters in Australia, so don't expect a B&M hyper coaster. Expect a good coaster, but smaller than what would be major internationally. Something else caught my eye was in the Village report where they talk about the future growth plan. We know about Wet n Wild Sydney, and the possibility of opening parks in China, but these 4 words appeared amongst them: "New gates - Gold Coast". New gates? We know about the plan for an entertainment precinct at MW, which could conceivably be called a gate, but they're talking about new gateS. Could there be something else in the works that we don't know about? Finally, I'll say something for the overall condition of the parks themselves: The Oxenford parks are looking really good overall. F&B not withstanding, the quality at MW has picked up a lot over the past 2 years. The Fright Nights and White Christmas events are an obvious example of that, but there are many examples; Scooby Doo looks better than it has in many years, the worst thing people can say about HSD these days is that it isn't Police Academy, and there is a 20th birthday parade coming to MW, replacing the current parade, which is one of the better incarnations of the parade as it is, and if they're not willing to spend the money to keep it running properly, they get rid of it altogether rather than leaving it to rot in the public eye. They've also resisted the temptation to do 'pay to cut' systems on their rides, which is a serious reason for people to visit Village instead of the competition. WnW's up-charges aren't the tacky kind, and the park just added 4 Aqualoop slides, which despite having reliability issues (they've closed again to hopefully fix the problem once and for all) shows that Village really understand how to do new attractions. Add in the mix a new show for AOS, the turn around at Paradise Country while still growing the business, and I'd say that despite our initial fears, they definitely 'get it', credit where credit is due. Sea World is still quite a way behind where it was a couple years ago, and while I don't think adding a parade and jet ski show will fix the park, they certainly won't hurt. I won't go into what I think the parks issues are here, (I'll give you a hint though, it's got to do with cost cutting, removing some attractions and butchering others) but I will say they are still investing in the park, and I'm hopeful that in a few years we'll look back on 2009 to 2013 as a 'transition phase' for SW, and the park will come out the other side better for it. In other words from what I've seen at MW, WnW AOS and PC I'll give the benefit of the doubt that they can fix what's happened at SW too. - Joz Edited August 21, 2011 by joz