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Amusement parks put hopes in ‘staycations’

Regional attractions are historically ‘recession-resistant,’ spokeswoman says.

Kings Island banking on new roller coaster
Kings Island trip planner At kicentral.com
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Photos: Photos: New coaster 'Diamondback'

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By Tom Beyerlein, Staff Writer Updated 1:39 AM Friday, April 10, 2009

The amusement park business is having its ups and downs, but the parent company of Kings Island and Cedar Point says it’s well-positioned to ride out the recession.

Cedar Fair LP of Sandusky, whose New York Stock Exchange ticker symbol is FUN, joined the big leagues of amusement companies in 2006 when it bought Kings Island and four other Paramount parks for $1.24 billion cash. It also assumed massive debt, which is weighing down its balance sheet.

Its stock closed at $10.23 Thursday, April 9, down from a 52-week high of $25 in May 2008.

Cedar Fair cut its dividend nearly in half last month and announced it will try to sell its Worlds of Fun park in Kansas City and Valleyfair in Shakopee, Minn., to reduce the debt before it matures in 2012.

But Kings Island is rolling out a new roller coaster, and Cedar Fair spokeswoman Stacy Frole said the company doesn’t plan any significant staff cuts this year. Kings Island employs 150 full-time and more than 4,000 seasonal workers.

“Historically, we’ve been recession-resistant,” Frole said. One reason is that, aside from Cedar Point, the company’s 11 amusement parks are regional attractions that draw patrons from a 150-mile radius, she said. This allows customers to avoid airfare, lodging and major gasoline costs, and enjoy a day’s entertainment for around $40, Frole said.

“I don’t think the public will notice Cedar Fair’s debt” when visiting its parks, said Dennis Speigel of Cincinnati, president of the consulting group International Theme Park Services Inc.

The big destination parks in southern California and Orlando, Fla., are “off significantly and their future bookings aren’t looking up at this point in time,” Speigel said. But regional parks should fare better if gasoline prices remain moderate, he said.

Theme parks did decent business during spring break, and the movie business in the first quarter of 2009 was up 13 percent over the same period in 2008, Speigel said. “People are staying in close, but they’re still going out and they’re still spending.”

He said Kings Island’s new Diamondback coaster should help. “It’s a good time to have a ride of that nature and stature introduced. (Amusement parks) live on repeat business and repeat business lives on product introduction.”

Still, said Speigel, “It’s a mature industry now. We’re not seeing the growth at the front gate that we saw 20 years ago.”

Because of the 2012 debt maturity date, Cedar Fair is in a better position than Six Flags, which announced that it must restructure its debt by September or go bankrupt. Frole said all the parks are profitable, but the company hopes to sell two of them in a “proactive” move because of the uncertainty of the credit market.

Contact this reporter at (937) 225-2264 or tbeyerlein@DaytonDailyNews.com.

“People are staying in close, but they’re still going out and they’re still spending.”

Dennis Speigel

President, International Theme Park Services Inc.

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