This past week, The Walt Disney Company held its Q3 2022 earnings call and released its earnings report for the quarter. Among other statistics, the company reported that revenue increased by over 50% and demand for the Disney parks is still exceeding the available park pass reservations. But it looks like not every theme park had a great quarter.
The Six Flags Entertainment Corp. also reported on this past quarter recently, with less-than-stellar results. From the report, it sounds like the main problem came from an adjusted strategy that worked a little too well.
According to The Wall Street Journal, Six Flags Entertainment Corp. reported that attendance at the theme parks fell by 22% this past quarter. That leaves park attendance at 35% below 2019 levels and 10% to 15% below what the company was hoping for. Chief Executive Selim Bassoul said, “Our execution needs to improve” when it comes to park attendance.
By contrast, many other theme parks have reported improved attendance. Disney has said that demand for their parks “has not abated at all.” In fact, sales from the Parks, Experiences and Products Divison of the company increased to $7.4 billion this year, which is up 70% from last year.
Cedar Fair LP reported that attendance is only 8% below 2019 levels, and SeaWorld Entertainment Inc. reported attendance as 3.1% below 2019. That leaves Six Flags with the worst gap between pre-pandemic attendance and current attendance.
But attendance wasn’t the only problem. Six Flags also reported that revenue is down 5% and their profits fell by over one-third. The Wall Street Journal said that Six Flags was expected to report $518.5 million in revenue, but they only reported $435.4 million.
So what’s the reason for this drop in attendance, revenue, and profits? It may be the new strategy that Six Flags is trying out. CEO Selim Bassoul has been working on “a turnaround effort that includes raising prices, attracting a more premium customer base and improving guest experiences by reducing overall attendance” (Wall Street Journal). In other words, the parks have been raising prices on purpose to reduce the number of guests in the parks and attract guests who are willing to spend more money. So far it looks like their plan to reduce attendance has worked a little TOO well.
However, the plan to attract guests who spend more money is also starting to work. Six Flags reported that guest spending increased by 23%, with the average visitor spending $63.87 in a day. This statistic (per capita spending) is up over 50% from pre-pandemic levels.
Six Flags appears to be sticking to this strategy. Bassoul said that the board is “willing to pay a short-term price for a long-term benefit.” That short-term price is hefty, though. Six Flags’ stock is down about 50% so far this year, and shares fell 18%.
Disney has hinted that price increases could be coming to the parks again soon — we’ll have to wait and see if that affects park attendance at all. Keep following AllEars for more of the latest theme park news!
Join the AllEars.net Newsletter to stay on top of ALL the breaking Disney News! You'll also get access to AllEars tips, reviews, trivia, and MORE! Click here to Subscribe!
Have you been to Six Flags recently? Let us know in the comments.