Please ensure Javascript is enabled for purposes of website accessibility

How Might Theme Parks Change Post COVID-19? Cedar Fair Has Some Ideas

By Demitri Kalogeropoulos - May 10, 2020 at 8:02AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Expect to see much more cleaning and disinfecting, for one.

The business of Cedar Fair (FUN 1.19%) was trending higher in the months preceding the COVID-19 pandemic closures. Knott's Berry Farm notched a record start to the year through early March, which helped push overall attendance higher by 19%.

The social-distancing closures then swamped that positive momentum and led to 388,000 fewer park visits in late March, the company said in its first-quarter earnings report.

The good news is that season pass sales have been strong all year. But those visitors can expect a different experience once the parks reopen.

A rollercoaster rolling downhill.

Image source: Getty Images.

A good start

The first quarter is usually a low point for Cedar Fair's business anyway, with all parks besides Knott's Berry Farm closed through the winter season. Yet attendance was still up 149,000 through mid-March, management said in a conference call with Wall Street analysts, and revenue was up $8 million.

The increase extended the positive momentum Cedar Fair gained in 2019, which set records for attendance and in-park spending, among other metrics. The company also enjoyed surging demand for season passes, which jumped 30% through the first quarter and pushed deferred revenue up to $195 million.

That metric suggests that demand for parks hasn't disappeared due to COVID-19 worries. "Our parks offer what our friends and families have been missing most while being stuck at home," CEO Richard Zimmerman said, "the opportunity to finally bring some excitement into their lives again."

A different day

Cedar Fair is ready to open its parks within two to three weeks of getting the go-ahead from regulators. But there will be some big changes to the experience. Cleaning and disinfecting will be "consistently applied and pervasively visible," executives said, with common surfaces like tables and handrails likely being constantly treated.

Sanitizing and hand-cleaning stations will be easily accessible for guests and employees. There will be new rules on social distancing inside restaurants, in common areas, and on rides, too. The parks will likely operate at reduced occupancy.

Technology should help by promoting mobile payments and managing park attendance peaks. Cedar Fair is optimistic about the idea of virtual queuing, which might help eliminate a major social-distancing challenge. The regional theme park giant is also working on a new health and safety training program that's specific to COVID-19. Employees will be checked for any potential symptoms each day.

What's ahead?

No one knows how consumer demand will look for the parks once they reopen. Cedar Fair is polling some of its most loyal customers to get an idea about what they'll be looking for in a visit at a time when the COVID-19 threat hasn't been completely erased. There could be significant pent-up demand for park entertainment experiences after weeks and weeks of extra stay-at-home time.

The company's challenge is to add aggressive safety measures without sacrificing the excitement that draws guests to a park like Knott's Berry Farm. "It will certainly be different," Zimmerman said, "but it will still be fun and have memory-making at its core."

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends Cedar Fair. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cedar Fair, L.P. Stock Quote
Cedar Fair, L.P.
$44.22 (1.19%) $0.52

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.