For Southern California theme parks—when it rains, it pours.
Knott’s Berry Farm in Buena Park, one of entertainment firm Cedar Fair LP’s (NYSE: FUN) portfolio of 13 theme parks, is one of the few parent company sites that operate year-round.
A heavy dose of rain this year in California caused the parent company’s first-quarter results to show a steep decline, since a majority of Cedar Fair’s other parks were closed during this period.
Cedar Fair reported net revenue of $85 million on attendance of 1.1 million guests for the first quarter of 2023, which is a 14% drop compared to the beginning of 2022. Last year, the firm saw 1.5 million guests across its properties during the start of the park season.
Chief Executive Richard Zimmerman said the decreases in Cedar Fair’s overall attendance and revenue were due to quite literal headwinds in California.
“Shortfalls are directly attributable to the worst period of weather we’ve experienced in several decades at our California parks,” Zimmerman told analysts this month. “Cold, wet and even snowy days at Knott’s Berry Farm, our park with the most meaningful first-quarter operations, prevented the park from opening at all on seven days.”
Knott’s closures along with California’s Great America in Santa Clara affected 30% of Cedar Fair’s planned operating days during the first quarter—creating a much slower start to the season, Zimmerman said.
According to park data, attendance declined by approximately 440,000 visits at the company’s two Golden State parks.
The good news for the theme park operator: the first quarter only represents around 5% of its full-year results, according to Zimmerman.
Pass Extensions
Another headwind facing the Buena Park site was the number of visitors who made use of their extended season passes from the 2020 and 2021 seasons all throughout last year.
Approximately 140,000 pass visits added to 2022’s attendance figures and sales which led to this quarter’s drop.
Knott’s has one of the higher-priced passes in the system, according to officials.
“Despite this, Cedar Fair is poised to capture the full potential of our upcoming busiest and most profitable days of the year,” Zimmerman said.
Consumer spending remained strong throughout the quarter, the executive added.
“We’ve seen no slowdown in what they want to spend and what they want to spend on,” Zimmerman told analysts. The most popular consumer the company has identified are mothers with young children.
“Once they get there, [we’ll] give them plenty of opportunity to enjoy what they’ve told us they’re willing to spend money on,” he said.
Cedar Fair currently has a market cap of $2.2 billion.
New Additions
Knott’s will reopen the newly renovated Fiesta Village at the end of this month. The themed area is meant to reveal a more Hispanic culture influence with new walking zones, new dining options and redesigned décor.
The park also renovated the seven attractions in the area which will reopen in May too, except for the renamed MonteZooma: The Forbidden Fortress roller coaster due to construction delays.
The 322-room Knott’s Berry Farm Hotel will wrap up current renovations and open as the renamed Knott’s Hotel this fall .”
