This decade has been a roller coaster for theme parks, but most of them seem to be rising back up. However, one company is on the decent: Six Flags.
At the end of 2022, Six Flags saw revenue fall 9% compared to 2021. Mind you, 2021 was still dealing with closures, capacity limitations, and mask mandates (which could impact sales of concessions). These regulations would gradually relax, but still, 2022 saw revenue fall.
It seems inconceivable that such a popular attraction could fail on such a grand level, but there’s a funny thing — Six Flags wanted this to happen. Parks sought to reduce wait times, attract high-spending guests, and discourage penny-pinchers from entering.
Well, one thing work: Many people have opted not to return to Six Flags, but the guest experience hasn’t changed enough to attract the high spenders. It seems Six Flags has lost its identity, and if it doesn’t make some drastic changes, the brand could lose its parks.
The downfall
There’s no doubt that the pandemic took its toll on theme parks, but most have been recovering. Disney parks earned 73%more in 2022 than in 2021 and Universal saw a 50% increase over the same time period. Meanwhile, Six Flag saw revenue decline by 9%.
The turning point seems to have occurred during the pandemic era — but it’s not what you think. In late 2021, Selim Bassoul was named CEO.
What was his goal? Upon entering the position, Bassoul wanted to do a 360° by resetting the company’s culture and focusing on guests who are willing to pay for a premium experience. Certainly, it makes sense to try to attract big spenders, but what does “premium” look like at a theme park known to advertise itself with a dancing old man?
Well… nothing, really. Bassoul outright stated that he wanted to bring fewer guests into parks. This seems counterintuitive, but the idea of reducing wait times to increase spending (so people wouldn’t be stuck in huge lines) does have some merit to it.
Rather than focusing on rides, the main attraction, parks introduced theme nights like Oktoberfest, Fright Fest, or Holidays in the Park. These might squeeze a few extra dollars out of guests, but most people want rides — one hasn’t Bassoul didn’t emphasize too much. There were some thrills introduced in 2022 (like Magic Mountain’s WONDER WOMAN Flight of Courage), but Bassoul openly stated that rides wouldn’t be a top priority.
The twists, the turns, and the numbers
If you’ve made it this far, you know that Six Flags’ strategy hasn’t been working out so well.
But, it did do one thing right. In 2022 spending rose by 22% to $63.93. This compares to 2021, when the average Six Flags guest spent $52.40 during a visit — and that was 23.7% higher than spending in 2019.
In 2021, entrance fees accounted for 53% of the brand’s total revenue, and it remained nearly flat at 54% in 2022. Given the increase in overall spending, the average cost of entry also went up. It soared 25% in 2022 to $35.99 (up from $28.73 in 2021). This was due to intentional price increases and an effort to attract more single-day entries. Season pass holders and memberships accounted for 54% of park entries in 2022, down from 63% in 2021.
This is a good thing, because single-day visitors are believed to spend more. The brand also made an effort to move away from heavily discounted single-day entry promotions which would encourage budget-conscious guests to show up at reduced prices. And it worked: In-park spending, like food and souvenirs, jumped 18% to $27.94 in 2022 from $23.67 in 2021.
But, these numbers are all positive, so why is Six Flags losing money? It’s because attendance is dropping faster than revenue is rising. In 2021, Six Flags’ total attendance was 27.7 million, but that fell by 26% to 20.4 million.
Sure, guests are starting to spend more, but it’s not enough to make up for the decline. Now, Six Flags is stuck in a conundrum. It can backtrack and try to increase attendance. Or, it can push forward with its new strategy and hope the outcome changes.
The bumpy road ahead
After 2022, it seems like Six Flags is going to say on a similar track. In the middle of the year, as quarterly reports were showing that parks were performing poorly, Bassoul said he wanted to raise prices and bring fewer guests into the parks. Why? Because Six Flags is not a cheap daycare.
The brand’s 2022 annual report, places an emphasis on guest experience, seasonal events, pricing, and organizational culture. Six Flags’ biggest attractions — the rides — are seemingly absent from its 2023 objectives.
This isn’t all bad, because tech advances are becoming a priority, and this can enhance the guest experience. Likely, this is because the parks were behind the curve with tech integration when the pandemic struck. It forced the brand to introduce mobile food ordering to its app in 2020, and this year, contactless pay (like Apple Pay or Google Pay) is set to be added to parks.
However, implementation of this may take longer than expected due to the business’ “organizational culture.” Last year, the company laid off nearly 25% of its full-time staff, many of whom are in management roles. So the brand’s emphasis on “autonomy” and “agility” isn’t out of respect for employees. It’s a necessity because fewer people are making decisions and taking action.
If Six Flags’ goal was to stop being a cheap daycare, it seems to be working. But they haven’t become an expensive family destination, or a place for young, money-spending adults — at least not yet. Likely, this is because thrill seekers aren’t finding reasons to head to parks. There aren’t many new rides to get them excited, so if Six Flags is making them scream, it’s due to price hikes.
Is the ride over?
This summer, we’re bound to see if guests really return to the parks. Ticket prices have jumped, events are in full swing, and pandemic-related restrictions are nearly non-existent.
Fortunately, the company entered the season with a glimmer of hope. Q1 2023 saw total revenue increase by 3% compared to Q1 2022. Total spending per guest went up 7%, mostly driven by the average cost of entry jumping by 10%. And there’s even more good news (by Six Flags’ standard, anyway): The number of guests decreased by 5% or roughly 1 million people.
It makes sense that people would reject these price hikes because Six Flags was never meant to be a premium destination. It’s not Disney or Universal, and families are less likely to vacation just to experience Six Flags. The company operates 23 theme parks in the US, and it’s built its reputation as a destination for thrill-seekers. The business established itself by focusing on more: more roller coasters, more parks, more flags, more fun. Now, it just seems to be after more money.
If the parks don’t focus on their rides, guests are going to be confused — even the ones who have money to spend. Seasonal celebrations are nice, but few of them offer a major incentive to spend money for park entry. Kids may enjoy egg hunts or trick-or-treating, but communities host these events for free. Rides are the premium attraction, and without refreshes, they’re going to feel stale.
This isn’t to say there will be no new rides this year. Six Flags is introducing a selection of new rides and attractions, but there isn’t anything too massive. The Fiesta Texas, Over Georgia, and St. Louis parks will get family-friendly coasters, and other parks will see water attractions debut. Beyond that, it’s mostly seasonal celebrations and character interactions.
Now, guests have fewer reasons to return. Six Flags may not want to be a park where teenagers hang out during school breaks, but at least that got people through the gates. The current trends aren’t going to bring in sustainable revenue. I have no doubt that the parks will eventually realize that big thrills and big crowds are core to their identities. It’s just a matter of when Six Flags makes this discovery. If they lose too much momentum, they may not have the opportunity to rise again.
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