Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Tourism

Inside Six Flags’ Attempt to Reduce Visitors And Go Upscale

9 months ago

Six Flags, the largest regional theme park operator in U.S., has been attempting a business and guest experience turnaround under its new-ish CEO Selim Bassoul, who took over in Nov last year. And it beginning to see early results — detailed in its latest earnings call — that gives lots of lessons for the crush of visitors/passengers causing all sorts of issues in the larger travel and leisure ecosystem.

Probably one of the most fascinating and interesting earnings calls I have heard in a while, so much on its strategy to upgrade the experience and reduce congestion, and a lot of color on the pricing strategy.

Their latest hearings call transcript is well worth a read to see how its efforts are going, I have extracted liberally below:

“Over the past few months, we have been executing quickly to improve the guest experience, focusing on our largest parks first …

While it is early, we are very pleased with our progress, improving ride throughputs, which has increased our rides per guest per day, a metric that has consistently ranked as the No. 1 determinant of guest satisfaction. In my first 100 days, I was shocked to learn that nearly 30% of the seats on our coasters are empty every time a train leaves the station because groups don’t want to split up. This was clearly inefficient and exacerbated our problem with long ride wait times.

To fix this issue, we have implemented single-rider lanes on our busiest days, allowing guests who are willing to ride solo to move quickly through the line and fill the empty seats.”….

“The increase in admission spending per capita compared to 2021 was driven primarily by higher realized ticket prices for both single-day tickets and the Active Pass Base as well as by higher revenue from memberships beyond the initial 12-month commitment period….Our paid attendance was just under 30 million. We have now deliberately eliminated almost all nonpaid attendance. And year to date, our attendance is trending down approximately 20% from the paid attendance levels achieved in 2019.”….

“On our last call, I talked about our decision to pursue a premiumization strategy, which entails improving the guest experience and charging prices that are in line with the value we deliver our guests. For years, our primary objective was growing attendance. While — yes, while attendance is an important performance metric for our business, it’s only one of many different variables that impact our bottom line.

Going forward, we are changing the way we think about our business. We will no longer prioritize any one individual metric such as attendance, per capita spending or Active Pass Base. Instead, our primary objective will be optimizing profits. Let me repeat.

We made a conscious decision of trading off attendance for yield.”…

“Our new premiumization strategy is a big departure from our historical strategy of selling season passes at low prices in order to up-sell guests from single-day tickets to season passes. Raising price is no easy task for a company that has trained customers for decades to expect big discounts. And there has already been some pushback from guests who are reluctant to pay our higher prices.

But we strongly believe that if we execute on our goal to dramatically improve the guest experience, over time, we will recapture a portion of our lost attendance despite the higher prices.”….

“One, the issue is, today, if you’re going to be spending an hour waiting to get your food in any of our food outlets, you’re not going to order food again. You’re going to say, “I didn’t come to spend an hour here. I have 20 minutes to get into the restrooms, 45 minutes to get into the parking lot, 45 minutes to get through the entrance.” It ruins everything and the spending goes down. We believe there is, at a certain level, a number when we share all our parks, we believe there is a number that we believe is the highest optimum attendance we would like to see across the park in a year to maintain the highest guest experience.

Now that number can vary. Today, if you think about the past few years, we’ve been running roughly at 30 million. A little bit short when you take the freebie tickets, 29.5 million to 30 million attendees a year. It was suffocating our parks.

Our guest score were down. We believe that short of that should be a number that will be more comfortable. And I don’t have that number, but it’s going to be, I believe, at least 10% to 15% short of that number to create that ultimate experience that people want to have. So as I walk the park today, and you saw how quickly our guest experience, I’m not talking only our internal.

I can share it on Facebook, on Yelp, on Tripadvisor, on Google Reviews, all have trended up very quickly because we have limited our attendance in our park by raising the price of the ticket and eliminated the freebies and the discount and the — all dining — all seasons dining meal that brought a certain type of people on our park and clubbed our park and created choking points everywhere. So I believe — we don’t know yet that number exactly what it is, we’re testing it. I think this year is going to tell us. But we have an optimum number where I gave you roughly a little bit where it’s going to be.

And we believe that our customers are willing to pay more for that experience. So give me most probably by a few more quarters, I will be able to tell you roughly what is our optimal attendance we would like to have.”…..

“The pushback has come back from basically three areas specifically. One, we have a big — not a big, I would say, a number of guests had once a monthly plan. Meaning they want to pay monthly and we have eliminated that monthly plan.

And we are rethinking about that. And we want those people to be able to enjoy that park. We like this type of customers. But for whatever reason, our monthly plan, the way it was done before, which is through our membership, it had too many things attached to it; too heavy discounting, meal plans, free parking, no blackout dates, heavy discount on retail, heavy discount on food.

So we stopped it. We grant further whoever is in it, and we said we’re going to stop that. But I think we need to rethink about a monthly plan that is catered to that segment of our guests that would like to continue paying monthly. And we are rethinking about that.

And I think we’re putting plans together to introduce something this summer. So that will most probably take care of that — of those people we lost just because they would rather pay on installments. We will reintroduce that. [Inaudible] solved.

We had a lag. We’ll get — we will recapture a big portion of those people. The second part of our customers are customers who like to come and eat at our park that meal — all seasons dining meal, which is attached with the season pass. That dining meal was highly unprofitable — very unprofitable for us, and it was choking everybody else.

So we had a part of our population that I can name around 10% of our guests like the dining plan. And I can tell you the numbers, it was around $80 for the full year — for the full season. And it’s included lunch and dinner for the full season and free drinks, free meals, free snacks. Very, very expensive to run and choked everything, because those people would come in and they can have several of those.

And sometimes, they will most probably abuse the system, as you’ve seen online. And it created a lot of choking point for those people coming in and regulars who came to eat in our park all day long and then ruined the experience of somebody who came in on a single-day ticket with their family who paid a lot of money to come and paid parking and came in and now they have 45 minutes to an hour waiting to get a meal while those other people are choking the line for $80 for the whole season. So that’s gone. And those people are most probably upset.

I see it on the social media and are upset about that. So if we want to introduce a dining plan, it has to be totally revisited. Third is a number of people who came on a freebie, meaning bring a friend along, and we had a lot of those. In 2019, there were over 3 million free tickets.

I don’t want free tickets. Free tickets people — we know data. Those people don’t spend any money in our parks. They come for free.

They come in, they don’t even buy a bottle of water. So from that perspective, I don’t want to have them choke. And those are the three components of where we’ve seen our attendance go down. Now we address one of them because I think it’s fair to address the monthly plan.

We will most probably rethink whether we introduce a dining plan — a season dining plan or not or nonexclusive. But it’s going to be completely changed from what people expect because I want to avoid the choking points. So from that perspective, we are tweaking where we’re going. But I will tell you the spend per guest have gone up significantly.”….

“I have to congratulate SeaWorld and Cedar Fair for how they have maintained better pricing integrity than us. So even with our new premiumization strategy, we remain around 25% to 30% below them across — on average across every one of ours.

Whether it’s single-day ticket to season pass, they are — we are below them. And I need to most probably get to that gap that I need to close. So we didn’t close all that gap already with our price increase. And we anticipate to close the gap maybe somewhere in — maybe this summer or maybe beginning of next year.”…..

“I think that the premiumization strategy works everywhere. So let’s talk about literally what drives our business. What drives our business is our top six to seven parks. Those six, seven parks have already been out and open, and we’re seeing the premiumization working.

Now when you talk about smaller parks, you might be right, we might have to do a little bit more dynamic pricing. But then we can offset it by a lot of costs down. But think of our business, 70% to 80% of our business is run by our biggest parks. And so far, we have been seeing the premiumization work in our biggest parks.

Now there might be one or two parks where we’re not going to be able to get to where we are exactly. But that’s less of a concern because they are not as big of a driver. But I think premiumization will work everywhere, maybe not to the same extent as it could work in Los Angeles or in New Jersey or in San Antonio, or Dallas. But I would say we are pushing premiumization.

And we’re willing to take the brunt of having lower attendance to create the brand and the willingness to come there. That we’re committed to the strategy. So I think one thing we should not be doing is suddenly stop short after a couple of quarters and start discounting again. So we’re not going to do that.

We’re going to continue saying we are a premium brand. We act like a premium brand. And we’re going to continue across all our parks to do that. There might be some dynamic pricing, but everything is going to go up and the value is going to go up.

And we’re investing in the small park the same way we’re investing in the big park. We’re doing the beautification of all our smaller parks. We’re doing all the work we’re doing in our water parks across board. We’re doing all that restaurant — restroom and restaurant upgrade and food upgrade in all our parks.

So I think we’re going to see people willing to pay more to be in our parks.”

Tourism

Disney Makes Increased Investments in Theme Parks Despite Focus on Streaming

9 months ago

Disney isn’t neglecting its theme parks, considered crucial to the company’s bottom line, despite its increased focus on Disney+ and other streaming efforts during the last two years.

Disney will unveil its newest park expansion at the end of May — the Wonders of Xandar Pavilion at Disney World’s Epcot. The attraction is based on Marvel’s “Guardians of the Galaxy” film and it features the Guardians of the Galaxy roller coaster. The Wonders of Xandar Pavilion follows other recent additions to Disney theme parks, such as Avengers Campus, which opened in June 2021 and the opening of Star Wars Galactic Starcruiser. 

The company is working to complete Tron: Lightcycle Run rollercoaster and is expected to launch the Disney Wish, its newest cruise ship, this summer.

Disney will post its second fiscal quarter results on Wednesday. The company said in February that its domestic theme parks have not seen a significant return from international visitors, who prior to the pandemic, represented roughly 20 percent of its guests. Theme parks typically account for the majority of the revenue of Disney’s park division, which cruises and hotels. Disney’s shares are also down about 30 percent since January.

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