It seemed like such an endearing ad. Launching its first national campaign in seven years, Six Flags (NYSE: PKS ) had everyone bopping along to the Vengaboys' "We Like to Party" as a seemingly lethargic bus driver broke out in nimble dance moves.
With disposable income starting to show up in the country's pockets and higher gas prices threatening to call off cross-country treks, the regional park operator's feel-good marketing should have been just the ticket to win over the locals to its chain of regional amusement parks.
But Mr. Six and the clever "It's Playtime" campaign seem to have missed the bus. Last night, the company reported that turnstile traffic fell by 4% through the first six months of the year. While per-capita guest spending was on the rise, in sum it had chain revenues coming in 1% lower.
The company indicates that it was doing well through mid-June, which is a pretty hollow endorsement when one considers that most of its parks aren't even open during the first few months of the calendar year. Summer is when Six Flags makes the bulk of its loot, and dangling poor comps through the critical latter part of June would have been grim if the company hadn't also reported that July is faring much better. Thankfully, it is, though everything from bad weather to national security fears can clear out the parking lots in a hurry, too.
Running a theme park isn't easy. Ever wonder why Hershey (NYSE: HSY ) doesn't own Hersheypark in Pennsylvania? It's a challenge. Just ask Disney (NYSE: DIS ) , Cedar Fair (NYSE: FUN ) , or any of the conglomerates with park operations such as Viacom (NYSE: VIA ) , General Electric (NYSE: GE ) , and Anheuser-Busch (NYSE: BUD ) .
Six Flags had to know that it was taking a chance this year. Rather than spend on major thrill rides to draw guests, it went with a smaller budget aimed at winning back the consumer's satisfaction. So it should come as no surprise to see the refreshingly welcome sign of patrons happy to spend more money at the parks against the sobering backdrop of sluggish attendance.
It took Six Flags awhile to set aside its quest for global domination. Only a few years ago, the company was looking to have a regional park near every major metropolitan market in the country. It's been humbled since then. Earlier this year, it realized that it couldn't compete against Cedar Fair's flagship park so it cashed out of Worlds of Adventure (now Geauga Lake, under Cedar Fair ownership). And while I live in the populous market of Miami, Fla., my nearest Six Flags is just over 650 miles away.
So getting back to its customer service basics, as the company is attempting to do this year, is a good start. An ambitious capital spending program to get those turnstiles clicking again in 2005 to enjoy the fruits of its feel-good 2004 would be an even better ending.
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Longtime Fool contributor Rick Munarriz did go to Magic Mountain for a couple of days last month. Mr. Six was everywhere and that catchy Vengaboys track was heard often. His portfolio fancies thrills. He owns shares of Disney and Viacom as well as units in Cedar Fair.