Doing things the Cedar Fair way

SANDUSKY Officials in the amusement park industry ride a fine line when attracting guests.
Annie Zelm
May 24, 2010

SANDUSKY

Officials in the amusement park industry ride a fine line when attracting guests.

Entice too few season pass holders, and attendance could drop substantially. But bring in too many regulars, and guests no longer have a reason to stay for the day, making them far less likely to spend their money once they're at the park.

This is the Catch-22 scenario Cedar Fair officials are grappling with in the aftermath of an acquisition.

Each of the five Paramount Parks locations carried its own distinct history and a well-established set of policies when Cedar Fair purchased them as a $1.24 billion package in 2006. In the entertainment industry lexicon, there's an official name for the remedy to this dilemma -- "right sizing."

For the publicly-traded partnership, it's a trial-and-error process, Cedar Fair spokeswoman Stacy Frole said.

"What we found is with the acquisition, season pass holders made up 10 percent of overall visits for the legacy parks (including Cedar Point), while for Paramount, it was about 40 percent," she said. "We believe there should be more focus on bringing people in for the day."

Last year, Cedar Fair officials were initially aggressive in approaching the transition. They took away some of the benefits of season passes, such as the ability to buy a pass in August and be admitted to the park for free throughout the following year.

"We had expected a decrease (in attendance), but it was more than we expected," Frole said. "We feel we've learned from those mistakes, and looking at the data, somewhere in between (10 and 40 percent) is the right area."

Toward the end of last season, Cedar Fair officials brought back some of the perks, including free admission to Halloween events with the purchase of a pass and free parking with the Platinum pass -- both of which Frole said were well-received.

Cedar Fair also made an effort to reduce the number of complimentary tickets, which sometimes led to overcrowding at some of the Paramount Parks, she said.

And although an empty parking lot is never a good sign in the amusement industry, officials are cautious that too much emphasis on quantity can sometimes compromise quality. In other words, they might take a hit in attendance in a given year, but as long as per-capita spending is up, they're still making a profit in the end.

International Theme Park Services President Dennis Speigel said season passes have come into prominence over the past 20-25 years, but during the past five years, the desire to plateau their sales exists among officials across the board.

Speigel, whose company provides planning and consulting services to amusement parks worldwide, said no magic formula exists to determine the right number for a particular park, but setting a target depends on several factors. Some parks, such as Cedar Point, are considered "destination" parks, attracting fewer season pass holders but more visitors willing to travel a further distance for a day of fun.

Parks like southern Ohio's Kings Island, however, tend to have more of a local legacy.

This makes them more dependent on season pass holders -- which is why Speigel believes Kings Island saw attendance drop by about 2 million last year when Cedar Fair "pulled the season pass rug out from under them."

"The Cedar Point people misread the market," Speigel said. "Season pass holders spend less in the park because they know how to visit and know how to conserve, but they still spend money on drinks, snacks and food," he said. "It's really a consideration for the park in terms of how much capacity it has, how much wear and tear you want to put on your park, and how important that additional revenue is.

"You don't want season pass service to become a baby-sitting service, but you do want to make sure (guests) come out a minimum of three to four times.

Many parks try to create a sense of consumer impulse by offering season passes at a lower rate initially, then nudging up the price as the season draws near. Others, including Cedar Fair, offer deferred payment -- allowing people to purchase passes just in time for the holiday season without paying for them until March.

Kings Island spokesman Don Helbig said visitors to his park seem to be more receptive to the values added to season passes this year, which has helped revenue.

"In the past, parking could only come with season pass renewals, and now we offer it with our Platinum pass ($150 for one adult)," he said. "In past years, it was just the five Paramount parks people could visit with a Platinum pass, and now it's all 18 of the Cedar Fair parks."

The deal also holds true for residents who purchase the premium pass offered at Cedar Point, which also includes free parking for each location.

Helbig said officials also tried to bring back value to Gold passes by allowing pass holders to bring a friend to the park for $9.99 after the park eliminated a day allowing them to bring a friend for free.

At Carowinds, the park straddling the Carolinas, spokesman Scott Anderson said officials try to target as many guests as possible in both categories.

"This year, the fact that we lowered the season pass prices (by approximately $10 each) was a direct effort to increase sales of season pass holders," he said. "Our pricing in terms of food and merchandise has remained the same, as well as gate prices for general admission, which went up by a dollar."

Speigel, who has studied amusement park ticket sales for more than 30 years, said setting market prices for a particular park is a process that takes years to develop and therefore cannot be reversed overnight.

"The important thing to remember is that each park is what it is," he said, "and what works at one park may not work for another."