Theme parks typically experience a surge in business during the summer months. However, this year, unfavorable weather conditions have been consistently hampering park operations, resulting in a decline in visitor traffic across popular parks nationwide. Unfortunately, the threat of Tropical Storm Hilary, bringing heavy rain and potential flooding to California and Nevada, means that the theme park operators may still face challenges ahead.
Macquarie analysts Paul Golding and Emma Liang’s research note highlighted that bad conditions, including excessive rainfall, high temperatures, and smoke from Canadian wildfires, have been significant factors contributing to the decline in attendance for Six Flags Entertainment, SeaWorld Entertainment, and Cedar Fair during the second quarter. During a recent earnings call, Six Flags Entertainment CEO Selim Bassoul revealed that the company experienced a loss of nearly 400,000 in attendance. CFO Gary Mick added that the attendance growth fell short of expectations due to challenging weather conditions, such as unusually high rainfall in the Northeast and a record-breaking heatwave in the South. Mick acknowledged the difficulty of making up for the lost revenue in the first half of the year. Looking ahead, he emphasized the importance of favorable weather conditions to offset the earlier weather-related setbacks. To mitigate the impact of adverse weather on attendance, the company plans to explore options such as adding more indoor and air-conditioned venues and restaurants.
Despite weather challenges, Bassoul remains optimistic about the company’s future prospects, noting promising trends in pass sales and attendance improvements. Cedar Fair CEO Richard Zimmerman highlighted the negative impact of unprecedented rainfall and extreme temperatures on their East Coast and California parks earlier in the season. Zimmerman pointed out that persistent rainfall disrupted demand and sales of 2023 passes, which continue to hinder attendance throughout the year. Cooler-than-normal temperatures also affected attendance at four of the company’s standalone water parks in Texas and other parks due to public health concerns over air quality caused by Canadian wildfires. However, Zimmerman emphasized the resilience of their business model, highlighting the solid performance of parks operating under normal conditions.
SeaWorld CEO Marc Swanson acknowledged the adverse effects of unusual weather patterns, rain, and Canadian wildfires on their markets during the quarter. CFO Jim Forrester reported a 1.7 percent decrease in revenue to $496 million compared to the same period last year, attributing it to a 2 percent decline in attendance. Swanson, however, expressed confidence in their plans for the future, including new initiatives that will strengthen the business and enhance profitability. He assured shareholders of the company’s commitment to driving operational and financial improvements, leading to significant increases in shareholder value.
In conclusion, theme park operators have been facing challenges due to unfavorable weather conditions impacting attendance. However, they remain determined to implement strategies and initiatives to overcome these setbacks and ensure long-term growth and profitability.
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