The business of Cedar Fair (NYSE:FUN) 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 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.
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."