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How to Build a Theme Park

By Rick Munarriz – Updated Nov 15, 2016 at 6:20PM

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The future of the amusement park chains is brighter than you think.

I'm back.

I'm not suggesting that you either missed me or even knew that I was away. It's just that I spent the past two weeks going through six states and a pair of Canadian provinces, hitting a half-dozen amusement parks and four indoor waterparks along the way, and I've got a little industry perspective to share.

It's the kind of clarity one can expect after riding some of the world's fastest and longest coasters, coupled with the good nights of rest between hitting parks that have taken top honors for being the cleanest, friendliest, most kid-friendly, and best overall parks in the country.

The moment we got home, my 12-year-old son fired up his computer to play Roller Coaster Tycoon. I'll be doing the same, only here with my keyboard and you as my guinea pig.

Erecting the perfect Frankenpark
The six regional parks we hit were Hersheypark, Great Adventure, Great Escape, Cedar Point, Kings Island, and Holiday World. Six Flags (NYSE:SIX) owns Great Adventure and Great Escape. Cedar Fair (NYSE:FUN) owns Cedar Point and will soon own Kings Island. Holiday World is family-owned, and Hersheypark, despite a clear connection with the Hershey (NYSE:HSY) brand, is not actually owned by the chocolate king.

Strictly for kicks, it would be great to take the best traits of each of those gated attractions to create the mother of all amusement parks. In an ideal world, every park would be anchored with a free and freestanding attraction like Hershey's Chocolate World. More than just a source of feel-good ambassadorship, it's a catchall hub that creates a traditional beginning or end to a day at the park without clogging up the operations on the other side of the turnstile. There would be merchandising opportunities before and after the park closes, and it would also create a standalone gold mine for character breakfasts, dinners, and late-night dessert clinchers.

Once inside the park itself, it's easy to see why Holiday World gets the perpetual nod for being the cleanest and friendliest park in the country. Some may argue that it's the well-trained employees that see the example set by the park owners putting in the long hours and sweeping up the park. Some may counter that it's the park's generous policies of providing free soft drinks throughout the park, as well as free sunscreen and innertubes inside its free water park. Since it's arguably the fastest-growing amusement park in the country, my theory is that all of these things add up to create the happiest park guests in the industry, and it's that contagious cycle that keeps the park clean and the guest relations area free of surliness.

Time to ride? Cedar Point and Great Adventure have some of the greatest thrill rides on the planet, so you may as well borrow from them if you don't want the teens to weigh in with their vetoing power.

I would take it one step further and borrow from the rhetoric of the loading platform emcees at some of the Cedar Point coasters. Blessed with the luxury of having ridden hundreds of different coasters over the years, I have grown used to silent stations and tired of the stale "Welcome back, riders -- how was that ride?" spiel. That's why I can appreciate the slant at Cedar Point, where a little pride and personality bleed into the experience. It's even more entertaining on some of the smaller coasters, where the interactive zingers are self-effacing. "It goes without saying that the Gemini is the greatest coaster at Cedar Point," went an announcer at the ride that is dwarfed by five larger coasters at the peninsular park. "That's why nobody says it." Even the more ordinary flat-ride crews spike the punch of personality. "If you go on Ocean Motion later, tell them that the Monster crew is the best." When park employees seem to be having fun, it rubs off on the patrons.

Then we have the young'ns to tend to. Spending a few days at Cedar Point and Kings Island in the middle of last week gave me a glimpse into what Cedar Fair can become if it connects the right dots. At Kings Island, the coaster lines were mostly sparse and the crowds gravitated toward Nickelodeon Universe. At Cedar Point, my youngest son and I had Camp Snoopy and Kiddy Kingdom practically to ourselves as everyone else was hitting the coasters.

It's easy to see why Cedar Point has won the Golden Ticket as the top overall park for eight straight years. The rides are great. The secluded location loaded with on-site resorts hugging the Lake Erie coastline is perfect, save for the bugs this time of year. It's also obvious why Kings Island has been a perpetual Golden Ticket winner under the best kid's area category. I love Charles Schulz as much as the next beagle-loving kid at heart does, but enhancing Paramount's Nickelodeon license into Cedar Fair's existing parks will be huge for the chain if it goes that route.

So, can I get that in a regional park? Take the massive Kings Island kiddie area, the Cedar Point and Great Adventure coasters, the rustic charm of Great Escape's throwback attractions, and the Hersheypark pre- and post-turnstile treats, and have them all land squarely into the clean smiles and generosity of Santa Claus, Ind., where Holiday World rests?

No?

I'm glad I had a rental car with me, then.

The future of amusement parks
If I can't build the perfect park, will the direction that the leading players are heading in please me? Maybe. Cedar Fair and Six Flags seem to be going in different directions. Cedar Point will be getting a new coaster next year, and it's bound to be a beauty. This comes just as Six Flags is scaling back its thrill-ride roots to win back young families with tamer additions and costumed character interaction.

Even though regional parks play to local markets where they are sometimes the only game in town, Cedar Fair and Six Flags seem to be playing a chess game as each one is zigging when the other is zagging. Six Flags is unloading parks, so Cedar Fair is buying parks. Cedar Fair is lowering prices, so Six Flags is raising them and upping the entertainment value of a day at the park.

Don't wait up for an endgame. Ultimately, the chains will embrace the inevitable reality that the consumer is crafting a more custom-tailored life. It's not radio. It's iPod playlists. It's not one-way television content. It's the interactive Internet. Can there really be any other reason for the recent popularity of rides that challenge riders? Both Holiday World and Hersheypark opened shooting-gallery dark rides this season. Later this month, General Electric's (NYSE:GE) Islands of Adventure will open a new attraction -- its first new ride since the summer after the park opened -- where guests will be treated to different aerial trolley experiences as they circle around Seuss Landing.

I still see the future getting even more customized. I predict that it won't be long before a day at the park can grow even more individualized, with social theater connecting the patrons through technology. It's really just a matter of time before those cheesy on-board digital snapshots are tied to social networking and photo-sharing sites where parks can regulate the user experience beyond the turnstile clicks and virally reach out to more potential parkgoers.

This is why I have no problem investing in several amusement-park chains. Between Disney (NYSE:DIS), Great Wolf Resorts (NASDAQ:WOLF), and Cedar Fair, I realize that my portfolio may be slanted toward wet and dry attractions. Just don't go calling it stodgy. It may seem like a sleepy, fickle business, but there will come a day when rainy days won't doom a park's production and when chains will continue to cash in on their guests long after the seasonal parks have unplugged the rides at the end of the operating season.

You don't need to build the perfect park. You just need to embrace the notion that a company capable of keeping an audience captive -- an attractive audience with disposable income and demographics to die for -- is going to be more important in the future.

I'm back.

From the future.

Cedar Fair was recommended to Motley Fool Income Investor newsletter service subscribers last year. Disney is a David Gardner selection in Motley Fool Stock Advisor . Great Wolf is a former Rule Breakers pick. Take the newsletter that best fits your investing style for a30-day free spin.

Longtime Fool contributor Rick Munarriz enjoys taking his family on coaster treks over the summer. He owns units in Cedar Fair, as well as shares of Disney and Great Wolf Resorts. T he Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$98.12 (-1.39%) $-1.38
General Electric Company Stock Quote
General Electric Company
GE
$64.35 (-0.19%) $0.12
Cedar Fair, L.P. Stock Quote
Cedar Fair, L.P.
FUN
$40.08 (-0.99%) $0.40
Six Flags Entertainment Corporation Stock Quote
Six Flags Entertainment Corporation
SIX
$18.20 (-1.78%) $0.33
The Hershey Company Stock Quote
The Hershey Company
HSY
$223.78 (-0.07%) $0.16
Great Wolf Resorts, Inc. Stock Quote
Great Wolf Resorts, Inc.
WOLF.DL

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

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