Business is typically booming at theme parks over the summer. This year, the weather has consistently put a damper on operations.
As a result, it’s driving down traffic at popular theme parks around the country. Unfortunately, with Tropical Storm Hilary bringing heavy rain and the possibility of significant flooding to California and Nevada, these theme park operators might not be out of the woods just yet.
Bad conditions, from excessive rainfall, high temperatures and smoke deriving from the Canadian wildfires, was a “clear driver of traffic weakness” for Six Flags Entertainment, SeaWorld Entertainment and Cedar Fair during the second quarter, according to research note from Macquarie analysts Paul Golding and Emma Liang.
During a recent earnings call, Six Flags Entertainment CEO Selim Bassoul said the company lost “almost 400,000 in attendance.”
CFO Gary Mick added that the company’s attendance growth fell short of expectations due to challenging weather, which consisted of “unusually high rainfall in the Northeast, combined with a record heat wave in the South.”
Mick further noted that it’s “hard to make up for the lost revenue in the first half.” In fact, moving forward, Mick said the company needs “to have fairly good weather … to collect what was hampered by the weather in the first half.”
The company, according to Mick, has plans to look at adding more indoor venues, more air-conditioned venues and more air-conditioned restaurants.
Bassoul also noted that the company is still seeing “promising trends despite weather challenges.” Pass sales are strong, and attendance trends are improving, he said.
Cedar Fair CEO Richard Zimmerman said unprecedented rainfall and extreme temperatures had plagued its East Coast parks as well as California parks earlier in the season.
“The persistent rainfall meaningfully disrupted demand over the first half of the year as well as sales of 2023 passes, which will continue to be a headwind on attendance over the balance of the year,” Zimmerman said.
The chief executive also noted that cooler-than-normal temperatures had a major impact on attendance at four of the company’s stand-alone water parks in Texas, including Cedar Point Shores, Knott’s Soak City and our two Schlitterbahn water parks.
He also said attendance was hurt at Canada’s Wonderland and several of other U.S. parks due to “public health concerns over poor air quality caused by the ongoing Canadian wildfires.”
Still, the company noted that “while demand challenges have been persistent in certain key markets, most notably in California, our solid performance at parks operating under normal conditions underscores the resilience of our business model,” he added.
|SIX||SIX FLAGS ENTERTAINMENT CORP.||21.47||-0.28||-1.29%|
|SEAS||SEAWORLD ENTERTAINMENT INC||48.49||-1.38||-2.77%|
SeaWorld CEO Marc Swanson said the combination of unusually hot and cold weather, rain and the fallout from Canadian wildfires “impacted most of our markets during the quarter.”
CFO Jim Forrester said revenue in the quarter fell 1.7% to $496 million when compared to the same period a year ago, which he attributes to the “decrease in attendance of 2%.”
That said, Swanson reported that the company is “planning new initiatives for the balance of this year and next year that will make us an even stronger, more profitable and more resilient business.”
“We have high confidence in the plans we are executing on today and for the future and in our ability to deliver substantial operational and financial improvements that will lead to meaningful increases in shareholder value,” he said.