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Cedar Fair LPÂ (FUN 1.20%)
Q3Â 2019 Earnings Call
Nov 6, 2019, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
You are currently on hold for the Cedar Fair Third Quarter 2018 Conference Call. [Operator Instructions] Good day and welcome to the Cedar Fair Third Quarter 2019 Conference Call. [Operator Instructions]. At this time, I would like to turn the conference over to Michael Russell, Corporate Director, Investor Relations. Please go ahead, sir.
Michael Russell -- Corporate Director, Investor Relations
Thanks, Chloe. Good morning everyone and welcome to our third quarter earnings conference call. I'm Michael Russell, Corporate Director of Investor Relations for Cedar Fair. Earlier this morning, we issued our 2019 third quarter earnings release. A copy of that release is available on our Investor Relations website at ir.cedarfair.com under the News tab. On the call with me this morning are Richard Zimmerman, Cedar Fair-President and CEO, and Brian Witherow, our Executive Vice President and CFO. Before I begin, I need to remind you that comments made during this call will include forward-looking statements within the meaning of the Federal Securities Laws.
These statements may involve risks and uncertainties that could cause actual results to differ from those described in such statements. For a more detailed discussion of these risks, you may refer to the company's filings with the Securities and Exchange Commission. In compliance with the SEC's Regulation FD, this webcast is being made available to the media and the general public as well as analysts and investors. Because the webcast is open to all constituents and prior notification has been widely and unselectively disseminated, all content on this call will be considered fully disclosed. Now I'd like to turn the call over to Cedar Fair CEO, Richard Zimmerman. Richard.
Richard Zimmerman -- Chief Executive Officer
Thank you Michael and good morning everyone. I am very pleased to report that Cedar Fair not only achieved its best ever post Labor Day performance, but our strong results year-to-date have us well on our way to making 2019, the best year in the company's history. Throughout the year, I've spoken to you about the strategies that underlie our new long-range plan and our results to date are proof of the progress and early success of those strategies.
As a matter of course, each year, we work with our Board to update our long-range plan, which establishes our strategic areas of focus and confirms our capital allocation priorities. This annual exercise is invaluable, as it helps to reinforce the importance of 2 primary objectives delivering positive near-term results while also remaining committed to long-term value creation.
Our Halloween events, which kicked off in mid September once again have produced some of our biggest days of the season through this past Sunday, November 3rd, record demand increased year-to-date attendance 4%, net revenues by 6%, in-park per capita spending by 1%, and out-of-park revenue 7%. All reported on a same-park/same-week basis, which excludes any contribution from the 2 newly acquired Schlitterbahn Waterpark in Texas. Most significant in our year-to-date results was our ability to generate solid revenue through higher attendance while continuing to grow in-park per capita spending, reflecting our sound revenue and yield management practices, optimizing attendance and increasing per capita spending have been and will continue to be the key drivers of our ability to generate long-term revenue growth going forward.
The macro environment thus far in 2019 has provided us with an operational tailwind of sorts, unemployment is at record lows. Consumer spending has remained healthy and weather patterns during critical portions of the season, have been favorable compared to last year, especially during the month of July.
With this backdrop, our team superbly executed our long-range plan strategies, including introducing more immersive entertainment offerings. Broadening the appeal of our parks through the successful execution of these initiatives has directly contributed to the record numbers I referenced earlier.
I'm also pleased to say our strategies and the momentum retained throughout this season have translated into an outstanding start for our 2020 season pass sales program. Not only are we well ahead of last year's record pace, but we are also seeing solid increases in the sales of related all-season products such as all-season dining and all-season beverage. This has helped push deferred revenues through the end of October, up approximately $40 million over this same time last year. Brian will provide more details on this later, but it's safe to say the ongoing success of our efforts in the critical season pass channel, gives us confidence that our approach is the right one.
Our limited duration experiential events such as Grand Carnivale, Monster Jam, and a host of regional celebrations like Boysenberry Festival in Knott's Berry Farm created sense of urgency, coaxing guests to visit our parks multiple times throughout the season. In 2019, our event strategy has also proven particularly successful at attracting unique visitors. Many of whom get a first chance to experience highly immersive entertainment at a size and scale, simply unmatched by others.
For the second season in a row, we produced a solid increase in the number of unique visitors to our parks. A critical metric as we look to attract new customers to plug into our CRM database. The quality and scale of our rides and immersive attractions make our parks unique. It is why guests recognize our parks as being among the very best parks in the world. It's also what helps drive our ever expanding season pass programs and our average season pass visitation rate of more than 5 times per passholder. The bottom line, we are very pleased with our record results for the quarter and the first 10 months of the year.
As I stated at the beginning, our record performance to date provides early validation of our long-range plan and demonstrates the strength and upside potential of our business model.
Finally, based on our results to date and our confidence going forward, it is my pleasure to also report that our Board of Directors has increased our quarterly cash distribution to $0.935 per limited partner unit lifting our annual rate to $3.74 more than a 6.5% yield at today's prices.
As we have previously stated, we are committed to the sustainability of our distribution and today's distribution declaration reflects our intent to moderate its growth rate in the near term, while we work to reduce our debt to adjusted EBITDA ratio to inside 4 times, which we believe is very achievable in the near-term.
With that, I would like to turn the call over to Brian to review our financial results in more detail. Brian.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Thanks, Richard, and good morning everyone. As a reminder, due to a shift in this year's fiscal calendar, the third quarter of 2019 had 53 fewer operating days combine across our legacy parks, when compared with the third quarter of 2018, significantly affecting the company's quarter-over-quarter comparisons.
Specifically when comparing results, it's important to keep in mind that the 2019 third quarter began on July 1st and ended on September 29th, while the 2018 third quarter began on June 25th and ended September 23rd. In addition, third quarter results are not comparable between years as the current period includes results from the operations of the 2 Schlitterbahn water parks since their acquisition on July 1, 2019. Because material differences in our fiscal operating results are partly due to the Schlitterbahn acquisition and the 53 fewer legacy park operating days in the period, I will also discuss operating results on a same-park/same-week basis.
I'll begin by briefly discussing our results for the third quarter before moving on to more current revenue and attendance trends. As Richard mentioned at the beginning of the call and as detailed in our earnings release this morning, we delivered an outstanding quarter with meaningful increases across all key performance metrics. For the third quarter of 2019, we reported net revenues of $715 million, up $51 million or 8% from $664 million a year ago. The increase in net revenues was due in large part to the contributions of the Schlitterbahn water parks, as well as organic increases in attendance, in-park per capita spending and out-of-park revenues. These gains were offset by the 53 fewer operating days at our legacy parks in the quarter on a same-park/same-week basis, net revenues in the third quarter were up 7% or $43 million on a 6% or 732,000 visit increase in attendance, a less than 1% or $0.21 lift in-park per capita spending and a 9% or $6 million increase in out-of-park revenues.
As Richard noted, despite the 6% lift in attendance, we were still able to drive higher in-park per capita spending led by mid single-digit increases in per caps on both food and beverage and extra charge items such as Fast Lane. On the admissions front, per capita spending in the third quarter was down 1% on the same-park/same-week basis with the slight decline due to a higher season pass attendance mix this year.
Moving on to the cost front, operating costs and expenses in the third quarter increased 13% or $42 million to $369 million in part due to the addition of the Schlitterbahn parks in the period. On a same-park/same-week basis and excluding $6 million of acquisition related costs, operating costs in the period were up 8% or $28 million reflected in the higher cost is $17 million -- is a $17 million increase in variable operating costs in particular, cost of goods sold and transaction fees directly related to the impact of the 6% lift in same-park attendance during the period. The increase in third quarter operating cost also reflects $14 million of higher labor costs driven by planned wage rate increases and $4 million of incremental costs associated with our new facilities and immersive event.
Meanwhile, adjusted EBITDA, which we believe is a meaningful measure of park level operating results totaled $355 million for the third quarter of 2019, up $17 million or 5% year-over-year on a same-park/same-week basis, adjusted EBITDA for the period was still up $17 million or 5%. The direct result of the record levels of attendance per capita spending and out-of-park revenues during the quarter, offset in part by the higher variable cost and the planned increases in operating costs.
Consistent with our commitment and long-term practice of providing transparency around operating results, let's turn our attention to more recent results that include our increasingly popular Halloween events including Knott's Scary Farm and Knott's Berry Farm was where haunt was first introduced to the industry nearly 50 years ago.
Positive attendance and revenue trends have continued through October, highlighted by record performances at several parks during the month, including the contribution from the Schlitterbahn parks, preliminary net revenues for the 10 months ended November 3rd were $1.37 billion, up 9%. Attendance totaled 25.8 million guests, up 7% in-part per capita spending was $48.73, up 2% and out-of-park revenues totaled $155 million, up 10%. Excluding Schlitterbahn, preliminary same-park net revenues through the first 10 months of the year totaled $1.33 billion, up $71 million or 6% compared with the same 10-month period last year.
The increase in same-park net revenues, reflects a 4% or 1 million visit increase in attendance, a 1% or $0.57 increase in in-park per capita spending and a 7% or $10 million increase in out-of-park revenues. The growth in same-park attendance through the first 10 months of the year is very encouraging, particularly given the slow start to the season, most notably during January and February in Knott's Berry Farm. In spite of that slow start and the debut of Star Wars: Galaxy's Edge at Disneyland, Knott's once again is on pace to deliver its best year ever. As Richard mentioned the increase in attendance also reflects solid growth in the number of unique visitors to our parks. Through the end of October, unique visitation was up 5% on a same-park basis, a critical metric when evaluating the success of our new strategic initiatives, geared at broadening the guest experience. Looking ahead to full year results and the impact of October strong performance on the fourth quarter, while our park teams have done an excellent job of managing operating cost throughout the season, there are a number of incremental items that will put pressure on fourth quarter costs and margins, most notably is the addition of downtime expenses at the Schlitterbahn parks.
During the third quarter, Schlitterbahn contributed $23 million of EBITDA since the July 1st acquisition. However, after off-season four quarter cost that EBITDA contribution will be reduced to $12 million to $14 million for the full year. Also pressuring fourth quarter margins are first year costs associated with the introduction of WinterFest at Canada's Wonderland, start-up costs for the openings of the SpringHill Suites Hotel at care wins and the indoor sports center at Cedar Point and the initial cost to kick off our targeted marketing project in Knott's Berry Farm.
All in all, each one of these projects presents great revenue upside potential over the long-term, but near-term pressure on operating costs. Looking at longer lead indicators, the positive trends remain very strong. At the end of October, deferred revenues were up approximately $40 million or 40% from the same time last year. Of the increase, approximately 85% is associated with the outstanding start to our 2020 advanced sales programs including 2020 season pass sales which are up more than 350,000 units or 50% in the first few months.
Now let me highlight a few additional items on the balance sheet. At the end of the quarter, our balance sheet remains healthy and in sound condition with $258 million of cash on hand and approximately $2.2 billion dollars of debt, a majority of which is fixed through long-term notes or interest rate swaps. Of our debt outstanding, we have no significant maturities before 2024 with our nearest term maturity being our revolver in April of 2022.
At the end of the third quarter, our total leverage ratio stood at 4.2 times debt to adjusted EBITDA or 3.7 times on a net leverage basis. As we said on our last call, our priority is to reduce total leverage back down inside 4 times as quickly as possible. For modeling purposes and from a free cash flow perspective, for the full year, we expect to invest approximately $190 million in capital expenditures excluding our purchase of Great America land and we expect to pay approximately $100 million in cash interest cost And approximately $45 million in cash taxes.
With that, I'll turn the call back over to Richard.
Richard Zimmerman -- Chief Executive Officer
Thanks, Brian. While we're pleased with our results to date, we are equally excited about the final 2 months of the year and the momentum we continue to build heading into 2020.
In the weeks ahead and through the upcoming holiday season, 6 of our parks will be hosting WinterFest events and Knott's Berry Farm will be transforming itself into a Winter Wonderland for the annual Knott's Merry Farm celebration. Our immersive season ending holiday events have proven to be extremely popular with everyone from grandkids to grandparents, while also offering our loyal season passholders another compelling reason to visit our parks. We believe the success of our fourth quarter events, which now account for more than 15% of our annual attendance have served as a catalyst for higher visitation levels as well as a steady growth of our season pass sales program. In the fourth quarter, we continue to make progress on a number of projects that fall under the adjacent property development, a primary tenant of our long-range plan.
Next week, Carowinds' new 130-room SpringHill Suites what debut in Charlotte and will be open for guest check-in shortly thereafter. This is a beautiful property ideal for both business and leisure travelers alike with suites designed a bit larger than the typical hotel room with families in mind. Most importantly, it offers Carowinds' guest a comfortable and convenient option for extending their stays that is within easy walking distance of the park's main entrance.
Meanwhile, we've begun multi-year renovation projects on 3 of our resort properties, including last week at Cedar Point's Indoor Water Park Castaway Bay, the Knott's hotel at Knott's Berry Farm, and the recently acquired Sawmill Creek Resort near Cedar Point.
Once fully renovated, we will have established a new level of quality and guest experience at these resort properties, which collectively represent more than one-third of our current room inventory. We also continue to push forward with permitting and planning efforts around a new Hyatt branded hotel property at our Canada's Wonderland Park in Toronto.
While this project has been slow to get started, we remain very encouraged by the market demand and potential and anticipate the hotel being completed over the next 18 to 24 months. In total, over the next 2 years, we will invest close to $70 million on the renovation of the 3 resort properties and the addition of the Toronto hotel. Once completed, each should contribute meaningfully to the ongoing development of our out-of-park revenue channel which has contributed nicely to our overall revenue growth over the last several years. Operating attractive, yet affordable resort properties, cabins and luxury RV sites in close proximity to our parks creates a convenient option for families and other park going groups to enjoy what we call staycations or glamping.
Accommodations create a stickiness factor for our parks with guests staying on average 2 nights and 3 days, while enjoying our amusement parks and water parks multiple times throughout their stay. Moreover, the availability of accommodations drives advanced purchase commitment inviting guests to book in advance, not only hotel rooms, but park passes as well.
From a business perspective, we like the sticky revenue and EBITDA our resort operations generate as well as their attractive growth prospects over the long haul. In addition to our accommodations projects, Cedar Point's indoor Sports Center is nearing completion, providing plenty of curb appeal and local curiosity.
The Center's design will accommodate a range of amateur sporting events from basketball and volleyball to gymnastics, cheerleading, and wrestling. Early tournament bookings are running slightly ahead of our first year pro forma estimates. And the indoor sport center is scheduled to host its first tournament play in mid-January, following an official ribbon-cutting ceremony earlier in the month.
We anticipate the increased level of tournament activity at Cedar Point Sport Center's indoor and outdoor facilities combined will generate strong demand for incremental room nights at all of our Cedar Point resort properties going forward. Meanwhile, inside our parks, we continue to focus on enhancing the guest experience, and improving guest service levels. Planned additions to accommodate further growth in attendance is critical to executing on our priorities, particularly at several of our larger parks, including our flagship park, Cedar Point. Planned initiatives include improvements to parking and ingress, egress to the parks, additional food and beverage capacity and expanded restrooms, just to name a few.
We also have a compelling lineup of new rides and attractions coming for the 2020 season, building upon the initiatives and strategies that have driven our growth this year. The continued roll out of more immersive events such as Grand Carnivale, combined with new attractions within our amusement parks and water parks and a full-year contribution from the Schlitterbahn parks have us well positioned to deliver another landmark year for Cedar Fair in 2020.
Before we take your questions, I would like to address 2 additional items. First, many of our analysts and investors have inquired about the recent marketplace rumors regarding M&A. Our response has been consistent throughout. As a matter of policy, we don't comment on rumors or speculation in the marketplace particularly around M&A. What I would like to emphasize, however, is my belief that we have continued to create long-term unitholder value through the strength of our business model, our disciplined execution in all areas of our business, and the attractive growth potential of our strategic initiatives. Cedar Fair has always been committed to achieving current year results while at the same time making investments that ensure the long-term success of the company.
And finally, as we prepare to celebrate the 150th anniversary at Cedar Point and the 100th-year at Knott's Berry Farm, we find ourselves not only reflecting on the company's rich history and many accomplishments, but also acknowledging the importance our parks have played in people's lives. Throughout the decades, the entertainment we have provided along our midways has brought happiness to generations of families from around the world.
What is most amazing of all is how powerful the memories are. People tell stories about their trips to our parks at the mere mention of places like Cedar Point or Knott's Berry Farm. We service custodians of these wonderful parks, stewards of our companies cherish legacy and its unique collection of historic brands. As today's leaders of Cedar Fair, we have an obligation to preserve the integrity of these parts for the enjoyment of future generations.
Chloe, that concludes our prepared remarks and we are ready to take questions.
Questions and Answers:
Operator
Thank you. [Operator Instructions]. We will take our first question from Steve Wieczynski from Stifel. Please go ahead.
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
Hi. Good morning, guys.
Richard Zimmerman -- Chief Executive Officer
Morning, Steve.
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
So I guess if we look at your attendance growth this quarter, it was really solid even if we look at for on a like-for-like type basis and I think that's a little bit of a different story than we heard from one of your competitors. I guess the question is there anything we need to think about that drove that attendance growth so much. And I guess what I'm getting at here is were you guys overly promotional in the quarter, if that makes sense.
Richard Zimmerman -- Chief Executive Officer
Steve. Good question. I can tell you that we ran our existing plan in terms of promotions and things. Listen, when we generate, you've heard us talk about optimizing our revenue mix, when we create increased demand we've brought on board a talented revenue management team and we're always looking to optimize our admission revenue.
So I don't think we did anything unusual. We worked our plan. What we saw was great demand particularly around our event strategy. We're very pleased with the 1st year traction we got from things like Monster Jam, Grand Carnivale, while attribution is hard, I will tell you that the event strategy we're in the very early innings. And when we look at that, I think there's a long runway on how we roll these things out and we translate that demand into into season pass channel, where you've heard us talk about the seasons of fund. I think what you saw this year was both a little bit better weather, particularly in July. But what you also saw was the seasons of fund message.
Our ability to give our guests reasons to visit the park during all 4 seasons of the year that really resonated well within our particular markets and we're very pleased with that.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. Steve, this is Brian. I would just add that as we said on the call in our prepared remarks. The fact that the volume lift also came with growing per capita spending was maybe one of the things that we are most pleased with. I did comment that admissions per cap was under a little bit of pressure, a little less than on 1% decline for the quarter, driven by the shift in mix to Richard's point more toward season pass, when we strip that out, we're very pleased with what we're yielding in terms of the non-season pass admissions per capita and so it definitely was not a discount playbook or promotional effort that drove, but I think it was more as Richard said, the broadening of the guest experience and and these initiatives are really resonating with the markets.
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
Okay. Got you. And then second question would be around your -- your well-documented change in your capital spending, plans going forward and I guess the question here is how do you guys envision really being able to take price moving forward, I guess with what we would call less impactful capital spending.
Richard Zimmerman -- Chief Executive Officer
Go ahead, Brian.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. I think as we -- as we said, our shift in capex strategy is not being motivated or the results of any kind of cash flow management concerns or a shift in scope or impact, it really is being driven by our market research and and the fact that we're getting to fully realize the benefits of the investments we've made over the last 6 to 7 years in terms of pricing, we're still going into 2020 with a very similar approach to our pricing playbook as we have the last several years. We don't really while coasters definitely give us a cover around pricing, Richard has always commented on, it's really the value perception and the expanded offerings, the broadening of the experience. These events are giving us just as much cover in terms of pricing, as the coasters have in the past.
Richard Zimmerman -- Chief Executive Officer
While driving urgency at the same time. Most of these events are limited duration and driving that urgency that allows us to create higher demand.
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
Okay. Got you. And then, one quick one real fast, Brian, if I could. I think you said the deferred revenue was up $40 million if I heard you correctly, is there any way to know what that would look like if you stripped out Schlitterbahn.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
The Schlitterbahn impact is essentially null to that number -- as we talked about I think on our last call, Schlitterbahn -- that's one of the areas of opportunity for us. While we have made some -- some changes there, we haven't implemented all of our systems yet, at this point in time to really go heavy after the season pass channel that'll be -- the roll out of those systems and the integration of those systems will be happening during the 2020 season. So while Schlitterbahn is in that number, I would tell you, it's not a material effect. We're still up approximately $40 million and 40% Schlitterbahn.
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
Okay. Great. Thanks guys. Appreciate it.
Richard Zimmerman -- Chief Executive Officer
Thanks, Steve.
Operator
[Operator Instructions] We'll take our next question from Tim Conder from Wells Fargo Securities. Please go ahead.
Tim Conder
Thank you. Brian or Richard, whoever wants to take this here, just wanted to revisit the season pass outlook here at Schlitterbahn and I think maybe, Brian, you alluded to this here in response to the Steve's question, but just wanted to check that on a -- more on a unit basis. And then, as it relates to Star Wars, the California fires, you seem to allude in your preamble that Star Wars really it hasn't seen an impact and we really haven't seen anything like that historically either, but you just -- just to reaffirm that and any comments on the California fires, if you're seeing any impact from that.
Richard Zimmerman -- Chief Executive Officer
Tim, I'll take your second question first. Good morning. Great question. In terms of impact, I'll go back to our prepared remarks. Knott's is off to its best season start ever, so we're well on our way to a record year. I will also tell you there Halloween Haunt was a record Halloween Haunt. So we continue to see great strong traction, as we have in the past several years when other large-scale attractions have -- have come online, so we see continuing demand in that marketplace and we're really pleased with where Knott's is at. Brian.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. Tim, in terms of season pass, we remain as we said on the call, extremely pleased with the start to season pass sales both at the Legacy Parks and at the Schlitterbahn Parks, while the opportunity really lies in the future for us at the Schlitterbahn Parks, we did make some changes coming out of '19 for the 2020 season there, where we've introduced a a payment plan. We are seeing similar percentage lifts in the Schlitterbahn, year-to-date sales, but it's a much, much smaller base. I think our real impact, our ability to impact that base and drive season pass more aggressively, as I said earlier, will be beginning with the '21 season when we have all of our, our systems, our ticketing systems, our e-commerce platforms, etc. installed. This -- as I mentioned on the call that being up north of 350,000 units year-to-date on the 2020 sales programs that is also without Schlitterbahn in there. So the core for the Legacy Parks are really are performing very well, early on.
Tim Conder
Okay. Okay. No. Great. And then, gentlemen again you've laid out -- we're starting to see some lifts from the new programs you spent quite a bit of time on that at the Analyst Day, back in August. Can you just maybe remind us again, should we see a little bit more in '20 and then obviously more in '21, but just remind us again sort of the cadence here that we should see that EBITDA flow through accelerate given the fact that your capex is going to be, I guess more muted as a way to say it and then you're going to be spending a little bit more on the immersive events, but just again how that interplay goes and that translation and then the cadence of the flow through drop down to EBITDA.
Richard Zimmerman -- Chief Executive Officer
Tim, really good question. We did touch on it on the Analyst Day. I'll go back to when we think about new events, which are evergreen, which come back year after year. I think the best example, we probably have is WinterFest and we said at the beginning, that WinterFest would take 3 to 5 years to fully mature, we're well on track at those that are open multiple year. So we're pleased about where we are. But all these take a little while to seed in the marketplace. I'm actually quite encouraged by the first year traction I've seen us get on the events. So we've talked about how we're looking at everything from net promoter scores to in the case of Grand Carnivale, which is a night time event, the attendance that comes in late afternoon to early evening, we've seen the markets react in a significant way and that's what these events are all about. I think In terms of your question -- in terms of financial, when we talk about getting to maturity, you'll see higher flow through, you'll see more impact, as you get deeper into the run of all these events, I think Halloween is probably the ultimate example we have, that's 2 to 3 decades. In the case of Knott's, almost 5 decades of experience and we keep, as I just mentioned before, keep posting record numbers in Halloween, so it keeps growing.
So I think it's a very long runway and I think I'll go back to point that Brian made in his remarks. We're listening to the consumer research, as we format these events, as we talk about that, as we think about the components we design in, and we keep finding the more we listen to our customer, the more they respond. So, I hope that answered your question.
Tim Conder
Yes. Thank you very much, Richard and gentlemen, congrats on the year-to-date performance.
Richard Zimmerman -- Chief Executive Officer
Thanks, Tim.
Operator
We will take our next question from James Hardiman from Wedbush Securities. Please go ahead.
James Hardiman -- Wedbush Securities -- Analyst
Good morning. Thanks for taking my questions. Obviously, a really good quarter, but I really wanted to focus on the post quarter commentary, I guess -- first question, did you say that the early season pass sales were up 50%, I know it's early, but that might have been one of the most bullish things I've heard you guys say in a decade plus covering you. And then secondly -- and how is that possible? I guess is ultimately a question there.
And then secondly -- maybe the second most bullish thing I've seen is, there were reports in October that Cedar Fair, I'm sorry Cedar Point was closed for a period of time, because it was full, which I didn't know if humanly possible. So what happened there? Is it a good thing? And then maybe comment on the whole gold past phenomenon at Cedar Point and not and how to think about that going forward?
Richard Zimmerman -- Chief Executive Officer
So, Let me take your second question. Three questions. Second one first. I can say that Cedar Point never closed, I want to clarify the park did not close, the park remained open on that particular Saturday, where we drove really high demand and listen, we saw high demand every -- every Saturday in October, both at Cedar Point and all our other parks. But working with the City of Sandusky, we had a lot of people trying to get here, all at the same time. We see that in other markets as well, where some of our events only start when the sun goes down.
So we see a large demand of people trying to get into our parks in October Saturdays, again based upon the popular Halloween. So the park never close, plenty of in-park capacity, lots of people here having a good time, for a brief period, access was shutdown, so we could sort through the traffic issues, but then we opened the the causeway in the and people came in. In terms of the bullishness and not bullishness, listen we are I can affirm we are up over 50% on our season pass sales year-to-date. You've heard us talk for many years about advanced purchase commitment. You've heard us talk about formatting the season pass program, so we can drive urgency earlier and we continue to see more and more sales earlier in our sales cycle, we think it's a positive thing. It also speaks to -- as Brian touched on and you heard us touch on in August, broadening the guest appeal, opening ourselves up to a wider audience because we have more things for more people to do. We think that's one of the critical key is going forward and we're really happy with the early traction.
Gold pass has been a significant lift at Cedar Point in particular, but as it was last year when we entered, so we introduced that for the first time this year, we introduced the gold pass at Canada's Wonderland last year. That program of having 3 tiers a regular, a gold pass, and a platinum is working extremely well. So we think our -- I call it fine-tuning our playbook and when we fine-tune our playbook, we mine, all the -- all the potential out of all of our markets that we operate in. And the other thing that I would -- just one more thing to add, we're seeing the strength across virtually all of our side. So it's not -- as we've talked about, we're not seeing strength just isolated in one region or one part, we're seeing strength across the chain and I think that speaks to our strategies and how they're resonating.
James Hardiman -- Wedbush Securities -- Analyst
That's all really helpful and maybe just to clarify, the 50% early season pass growth doesn't seem like a number that's sustainable. I'm assuming that there is some shift in timing there such that you're convincing some sub-segment to just buy those things earlier, what do you think is a reasonable growth expectation for season pass this year and should I think about some sort of offsetting per cap headwinds as we look to 2020?
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Hey, James. It's Brian. So first off, yes, I mean you read the law of small and big numbers right. The 50% is off is based on your early sales of season passes and by at this point in time, we might only be 20% or so through the full program. So I think you're your comments about being able to maintain that percentage is a very fair one. With that said, as Richard said, we're seeing strength across all of the properties, the lion's share of the year-over-year increase at north of 350,000 is being driven by the performance of gold at Cedar Point. So I'll separate the separate the parks into in the CP and the non-CP parks, the lift we're seeing at the non-Cedar point parks in their pass programs Much like we've seen in the last couple of years is probably 3 quarters of that what we see -- at least if it plays out like within the last couple of years is pull forward. We're getting consumers to make the decision and the commitment to buy a season pass in the fall or as we get into the WinterFest event here in November and December and so that's a good thing. Right. From the standpoint of it avoids disruption that might -- disruption events that might cause them to make a different decision in the spring.
At Cedar Point, our early data is telling us of the lift there and it is an extremely big lift. It's about a 7 to 1 new passholder versus a renewal. And so, we're getting a big lift in new passholders, now that will ultimately be a migration potentially from single day tickets. But again, getting that commitment upfront buying the most expensive ticket in the park, which is what a season pass represents is a very good thing. And so, I don't want to put a cap on where this can get to but what I can tell you is our marketing teams led by Kelley Semmelroth, our CMO and and her and her group are going to keep their foot on the accelerator. We're going to continue to try and sell as many passes as we can. And so, we're off to a very good start. In terms of pressure on per caps, there is no doubt that having more season passes outstanding in particular at a park like Cedar Point is going to mathematically put pressure on the admissions per cap at the parks and at that park in particular, but again at the end of the day, we don't take per caps of the bank and we sure do like having a lot more season passes outstanding and so we'll take that as a trade-off.
James Hardiman -- Wedbush Securities -- Analyst
Great color guys and great performance. Thanks.
Richard Zimmerman -- Chief Executive Officer
Thanks, James.
Operator
[Operator Instructions]. We will take our next question from Brett Andress from KeyBanc Capital Markets. Please go ahead.
Brett Andress -- KeyBanc Capital Markets -- Analyst
Hey. Good morning. Congrats on a great quarter.
Richard Zimmerman -- Chief Executive Officer
Thanks, Brett.
Brett Andress -- KeyBanc Capital Markets -- Analyst
And thank you for the clarity, earlier on October, can you maybe help put that October strength into numbers for us, that's one. And then following up on that, I mean, it does sound like some operating cost pressure in 4Q, is there any way you can elaborate or size that up for our models this quarter?
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. Sure Brett. It's Brian. So let me let me tackle the attendance first. Given that we put out the Labor Day numbers, you can start to sort of work your way back, so I'll give you a couple of data points, you can work your way back to see sort of post Labor Day, how the results have been, and if you do that math, you'll see it Over the 9-week period, it's been a very strong performance with attendance being up close to 13% or 14% and and revenues, pushing 10% lift. Month of October, those numbers are pretty comparable, which speaks to the strength as Richard said earlier for Haunt and these percentages and numbers are all that -- that I'm speaking to are all on a same-park basis, stripping out any benefit or impact from Schlitterbahn. In the month of October, we're looking at about a 15% lift in attendance and close to a 12% lift in revenues, so you do the math, you can see this probably -- there is a little bit of pressure in there on per caps, but that's understandable, based on the season pass mix continuing to push north.
Richard Zimmerman -- Chief Executive Officer
And Brett, one other point to make, we're talking about October, let's remember we're up against a record October last year, so we're really pleased with the movement that we've seen.
Brett Andress -- KeyBanc Capital Markets -- Analyst
Yeah. Thank you. I'd rather have you guys do the math than me. And then, Brian, just following up on the operating costs in 4Q, just if you could elaborate on that?
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. So much like we even started to see it creeping in a little bit to Q3, because some of these things we -- we start activating some of this stuff after the parks go out of daily operations right post Labor Day. As I said in my prepared remarks, the introduction of some new facilities like the Carowinds hotel, like the indoor sports complex at Cedar Point or new initiatives like the advertising, the targeted advertising. Right now, most of that being focused at Knott's Berry Farm, those things are going to put a little bit of pressure on fourth quarter costs. Some of -- some of that will -- the timing of how quickly we can activate some of that will ultimately impact the magnitude, but there is no doubt between those items like that and then the introduction or the inclusion, maybe I should say of Schlitterbahn off-season carrying cost November-December are going to put pressure on our fourth quarter operating costs and margins.
Brett Andress -- KeyBanc Capital Markets -- Analyst
Got it. And then just my last one here, I was hoping if you could elaborate on the pass perks program. Obviously, the full roll out next year, but I guess what kind of incremental impact on either spend or visit, did you see in the pilot program this season?
Richard Zimmerman -- Chief Executive Officer
Yeah, Brett. So, good question. Definitely something that we're very excited about, but we piloted at 4 parks this year introduced early to mid June testing a variety of different approaches and strategies around loyalty trying To see what resonated with the consumer, what motivated behavior, maybe got the guests to come out to the park on a day that they normally wouldn't have. So a lot of good learnings, what we found was, just to give you a little inside baseball, one of the most motivating offerings was anything it seem to include a food and beverage offer, that always seem to get the consumer to move. We were also very pleased with the -- what we would call the click-through or the activation rate on the offers. And so all of those learnings are going to go into the process for the broader roll out in 2020. As we said earlier, we still intend to roll this out across the system, sands the Schlitterbahn Parks, it might be a little bit of a phased roll out, given the fact that apart like Knott's Berry Farm is open year round and really doesn't matter, we don't have to make an opening day for them because there is no real opening day. So, but we will roll out for 2020 and we're very encouraged. I'm sure there will be incremental learnings as we go along, but there is no doubt that we think we've got something here that has the potential to really not only drive more value for the season passholder, but motivate them to visit more often.
Brett Andress -- KeyBanc Capital Markets -- Analyst
Thank you very much.
Richard Zimmerman -- Chief Executive Officer
Thanks, Brett.
Operator
We will take our next question from Paul Golding from Macquarie Capital. Please go ahead.
Paul Golding -- Macquarie Capital -- Analyst
Thanks so much. Congrats on a great quarter.
Richard Zimmerman -- Chief Executive Officer
Thanks, Paul.
Paul Golding -- Macquarie Capital -- Analyst
I just had a couple of questions around anything you can -- you can share on churn. Is there any incremental churn on season pass now that you've been -- you have this pricing structure and product structure in there for a bit or is it just being overwhelmed by the new season pass acquisitions or is it stable and the second part of my question is around the cost space, particularly around labor and how we should think about labor cost and labor management going forward after this step up and planned cost here. Thanks so much.
Richard Zimmerman -- Chief Executive Officer
Thanks, Paul. Good questions. Let me take the first one, I'll let Brian take the second. No. We keep seeing renewal rates trend higher. They've trended higher over the last several years and as we continue to provide more value, and I'll go back to the seasons of fund message more reasons to visit more often. We continue to see higher renewal rates a year-over-year. So we certainly saw that in 2019 and we anticipate seeing that in 2020. Brian.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. Just one last thought on season pass, I think in just connecting the dots to the previous question around pass perks, our loyalty program. We really believe that the loyalty program and some of the aspects of it will continue to help, what Richard alluded to in terms of the improving renewal or retention rates around season pass. In terms of cost base, as we've talked about in prior quarters and in prior years, labor, particularly seasonal labor continues to be a big area of cost pressure. Last year, we as -- if you recall, at this time, I was talking to you about the pressures on rates that were in the high single-digit 8% to 9% and we're managing a lot of labor hours out of the system to try and keep that down to mid-single digits, which we were effective at. This year, the rate pressure has been more around 5% and so, I think we're benefiting from a number of the market adjustments that we took in 2018 and so ours are are down slightly to essentially flat and we're keeping our overall costs right around that 5%. I think that's pretty fair to just our at least our expectation is we're going to plan for that, we'd rather plan for the worst and hope for the best and try and manage to a better number.
But I think it's reasonable to expect that seasonal labor costs are going to see probably around that mid-single digit that 5% kind of pressure for the foreseeable future. It's why initiatives like our workforce management initiative, the roll out of the new [Indecipherable] platform is so important. We've been testing that running that sort of parallel and doing a lot of testing here in 2019 season. We will be in heavy implementation mode over the fourth quarter and early part of next year, as we roll that out across the system, and so I think the real benefits of that initiative in terms of our ability to manage hours better, more efficiently manage seasonal labor hours is going to really start bearing fruits more in 2021, but I'm sure we'll get some winnings in 2020 as part of the roll out -- it's just not at a full return quite in the first year.
Paul Golding -- Macquarie Capital -- Analyst
Great. Thanks so much for the color. I appreciate it.
Richard Zimmerman -- Chief Executive Officer
Thanks, Paul.
Operator
Our next question comes from Chris Prykull from Goldman Sachs. Please go ahead.
Christopher Prykull -- Goldman Sachs -- Analyst
Good morning, guys. Thanks so much for taking the questions.
Richard Zimmerman -- Chief Executive Officer
Hey, Chris. Thanks, Chris.
Christopher Prykull -- Goldman Sachs -- Analyst
I think you said earlier that you expect roughly $12 million to $14 million EBITDA contribution from Schlitterbahn this year. Can you maybe just quantify the expected synergies and how you're thinking about the ramp of that into 2020 and 2021. And then secondarily, but related just how much capital you think you'll need to put into that business?
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah, Chris. It's Brian. So on Schlitterbahn, as we said when we made the acquisition, we really are excited about the long-term potential for the property. We think it's got upside in terms of where we can take the attendance and revenues, but there is also efficiencies to be -- to be mined on the, on the Cost side that will push toward better margins long-term. I think in -- so the integration I would say is going well, not a lot that we could do to impact the 2019 season given we bought it on July 1st, it was really more a matter of run their playbook and as I said earlier in our prepared remarks and on some earlier questions, hard for us to make a lot of changes or all of the changes that we want to in just one-off season. So a lot of our systems' implementation, which will drive the revenue synergies, those are going to be -- those systems are going to be built up and implemented during the 2020 calendar year, so we'll be ready for 2021. So I think in terms of revenue synergies, probably a little bit longer to get to those than the cost synergies, ultimately we're not looking for it was never about what Schlitterbahn could bring to the table for us in 2020, but more where we can take to 2022-2023.
And so I think we have modest expectations for 2020. We definitely expect to see some growth and we're already seeing very early signs of some of that impact as I mentioned just driving better season pass sales and the teams are already down there given those water parks wrapped up there there core season in early to mid-September. We've already begun a lot of the off-season work, both in terms of capital and non-capital. Some of the work that we're doing and that speaks to why we're seeing Schlitterbahn go from $23 million of EBITDA contribution in the third quarter to maybe something in the low to mid-teens by the end of the year. Some of the work that we're going to be doing just isn't capitalizable under our accounting policies and so that's going to weigh on us a little bit in terms of the '19 and the 2020 numbers, but it will make for a much better product long-term.
Christopher Prykull -- Goldman Sachs -- Analyst
Great. That's helpful. And then, you touched on this in a variety of questions earlier, but just curious, why do you think your results of this year or year-to-date have just been so robust relative to peers and maybe even relative to sort of the broader leisure backdrop and even relative to the prior two years results for yourselves, like what -- has anything changed in the backdrop, weather, related to the consumer, related to competition, or is it really just better execution on your part?
Richard Zimmerman -- Chief Executive Officer
Chris, I think it's a great question. You know, as we look at our business, you go back to the foundation which is the consumer is very healthy. Right now, the macro drop -- backdrop as I said in my remarks say that the consumer is in a good place and historically anytime we've seen sustained movement in the average hour -- and increases in the average hourly rate, that's usually been pretty good for our business, but I think if you look back over the last couple of years and I'll be more specific to us than the rest of the industry, look back over the last couple of years, we did a number of things that it had a number of both initiatives and attractions that we had at our parks that resonated really well, but '18 when I look at '18, it was really the anomaly in terms of weather, we clearly have gotten better weather this year, but Bigger than that, we've really seen our strategy start to really increase our penetration in all our markets. So I think it's our execution of our strategies, but I also think it's listening to our customers and it's on a daily basis. I've got to go back to our management teams, really paying attention to the fundamentals and making sure we're delivering on the quality of the guest experience, that is our consistent takeaway.
Christopher Prykull -- Goldman Sachs -- Analyst
Got it. That's helpful. And then maybe if I could just squeeze one more in, maybe more modeling related question, Brian. It looks like SG&A growth has been up pretty materially, year-over-year, year-to-date and then in the third quarter, which I assume some of that's M&A related, but what's the -- and maybe some of it's really the operating day shift to, but what's the right way to think about that line item going forward -- what's a more normalized growth rate?
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Yeah. It's a fair question, Chris. I think if we try and strip out at least the the costs that are in SG&A related to the acquisitions, whether it be Schlitterbahn or Sawmill or even the land that Great America, you're looking at, I think I saw this in your note, you're looking at maybe close to a 12% increase in SG&A costs, about 3% to 4% of that -- and that's in the 9-month numbers, right, that are in the release we'll be in the queue.
You're looking at about 3% to 4% of that is related to the incremental SG&A at Schlitterbahn as well as the extra week, so we have to keeping into account that the 9 months of -- in 2019 ended 09/29 versus 09/23 last year.
So that, incremental week and Schlitterbahn account for about 3% to 4% of that, so that pulls you down maybe closer to that 8% and then there are a number of items that are just wholly incremental, transaction fees associated with and I called it out in my prepared remarks as one of the key variable cost that that when you sell more tickets and you have more people in your parks spending money and using credit cards, things like transaction -- online transaction fees, credit card fees, all of those things go up, put that together with the huge lift in season pass sales for 2020 and you're looking at a little north of a 2% lift in our transaction fee cost, which all sit in that side of SG&A, the selling side.
Advertising costs are up a couple of percentage points in there and labor cost that sit in SG&A, so full-time labor, just 2% to 3% staying sort of with inflation, you work at all down, I think when you look at, at the core, you probably strip out those types of items and you're probably back more into that 3.5% to 4% kind of range, which is maybe the base but I I can't say that's what I would necessarily model, because to the extent we keep selling more tickets and selling more season passes, we're going to keep seeing more pressure on those costs and trade-off will take every day of the week.
Christopher Prykull -- Goldman Sachs -- Analyst
Great. That was really helpful. And good luck over the holidays.
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Thanks, Chris.
Richard Zimmerman -- Chief Executive Officer
Thank you.
Operator
It appears there are no further questions and that ends our question-and-answer session for today. I'd like to turn the conference back over to you for any closing remarks. Thank you.
Richard Zimmerman -- Chief Executive Officer
Thanks, Chloe. To close, I want to again emphasize that we are delivering on all key metrics, attendance, per cap, unique individuals, revenue, EBITDA, and deferred revenue have all met or exceeded our expectations this year. This is the credit to the hard work that every member of our team delivers on a daily basis. Beyond our current performance success, the broader industry fundamentals remain attractive. The barriers to entry are real, the industry has proven to be resilient through economic downturns and consumers continue to prioritize experiences over possession.
The bottom line, Cedar Fair is well positioned heading into 2020 and beyond. Michael.
Michael Russell -- Corporate Director, Investor Relations
Thanks, Richard. Thanks, everyone for joining us and I invite you to call the Investor Relations Department with any questions you might have 419-627-2233. We look forward to reporting our full-year results on our next earnings call in February of 2020. That concludes our call today, Chloe. Thank you.
Operator
[Operator Closing Remarks].
Duration: 60 minutes
Call participants:
Michael Russell -- Corporate Director, Investor Relations
Richard Zimmerman -- Chief Executive Officer
Brian C. Witherow -- Executive Vice President, Chief Financial Officer
Steven Moyer Wieczynski -- Stifel, Nicolaus & Company -- Incorporated, Research Division-MD of Equity Research and Gaming & Leisure Research Analyst
Tim Conder
James Hardiman -- Wedbush Securities -- Analyst
Brett Andress -- KeyBanc Capital Markets -- Analyst
Paul Golding -- Macquarie Capital -- Analyst
Christopher Prykull -- Goldman Sachs -- Analyst
