Al Weber set up Apex Parks Group in 2014. Its aim was to focus on what it calls the ‘new frontier’ – the highly fragmented space occupied by waterparks, amusement parks and family entertainment centres.
The company’s President and CEO, Al Weber, is well-placed to lead this initiative. He has over 30 years’ experience in the industry, including senior executive roles at Six Flags, Paramount Parks and Palace Entertainment.
He spoke to Blooloop about his background, the inception of Apex Parks Group and its acquisitions including Sahara Sam’s earlier this year and, most recently, Indiana Beach Amusement Resort.
From Operating Rides to Operating Parks
“So I started out in the amusement park business, then went into the theme park business, ” he says. “I became CEO of three companies, then thought it would be good to go back into the space on a smaller scale, become CEO again and see what mischief we could create in that very small fragment of space.”
The Apex opportunity brings Al Weber almost full circle to where he started in the industry.
In his youth, raising money for college, he was a ride operator at Coney Island in Cincinnati. Taft Broadcasting, a local media company that owned Hanna-Barbera Productions, bought that park.
“And they started out to build theme parks. They built Kings Island in Cincinnati and then Kings Dominion in Richmond, Virginia. Then one in Toronto. Then they purchased one in Charlotte. Ultimately we got a management contract to operate and purchase one in Santa Clara, California. So, the first part of my experience is really all out in the field operating two departments and operating a series of parks. I was the general manager of a number of those parks while moving up in the operation.”
After Paramount Studios bought the assets in 1992, Weber became COO (Chief Operating Officer) of the corporation, Paramount Parks, and CEO in 2002.
“I ran the company for about four years and reported to Paramount Studios. Then in 2006, we were asked to report to CBS. The company tried to sell the assets, so I led the divestiture process for Viacom CBS which was the parent company of the Paramount Parks assets and sold the company to Cedar Fair, of course. This was a strategic competitor, in June 2006 for a very, very high multiple. That made Viacom very happy.”
Six Flags, Palace and a Small Fraternity
Six months later, in January 2007, he received a call from MidOcean, a private equity firm he had met in the course of the divestiture process of Paramount Parks. They owned an asset called Palace Entertainment, based in Newport, CA, and asked him to step in as CEO of that company, which he ran for about ten months, turning the business around.
“I got the interest of some offshore folks to buy that company. So, we sold that company through somewhat of a silent auction to a company called Parques Reunidos who owns Palace today. I left Palace after that process was over.”
He then went into consultancy for a period, and became active in the Six Flags bankruptcy process, familiar with them as a competitor of Paramount Parks.
“You kind of operate side by side with these folks. It’s a relatively small fraternity, so you know the people well; know the parks as well.”
The bond-holder needed someone to step in and create a new vision for the company; a new financing plan; a new team. After coming out of the bankruptcy, Weber was hired as an interim CEO for ninety days:
“…until they brought in a market-oriented public company CEO, Jim Reid-Anderson, great guy, from Dade Behring and I became COO of Six Flags for two and a half years.”
Having acted as the architect of the business turnaround at Six Flags, he left them in September 2012 and reconnected with the managing partner of MidOcean Palace, Tyler Zachem, who had started a private equity company.
Three Main Sectors in the Park Space
“In January of 2013, I joined him looking at assets to purchase in the space. We actually thought that the operating space domestically had a number of great opportunities.”
They approached Parques Reunidos, an international entertainment operator based in Madrid, Spain, which operates over 50 parks in almost a dozen countries, and had bought Palace Entertainment, to buy assets they might no longer want.
After a lengthy negotiating process they acquired fourteen parks and a waterpark in Florida.
“It’s a tourist based business. We all kind of do the same thing but the dynamics are different. It’s interesting. If you study the business and know it really well, there are really three main sectors in that whole park space:
Firstly, there are the big destination players: Disney, Universal and so forth. That’s a very mature space in terms of those companies.
And, then there’s the regional theme park space: excluding Asia, there is Six Flags, Cedarfair, Sea World. You can add Merlin and Parques Reunidos to that group. It’s a relatively mature, consolidated space.
But, below that, if you look at mid to small location-based water parks, amusement parks, FECs, it’s tremendously fragmented. In fact, in this investigation we mounted into where we could plant a flag and make our first step in to buy something, there wasn’t a player to buy. That’s why buying the assets from Palace that had been operating successfully before, was our platform to start in that small amusement /waterpark/ FEC space, and to start consolidating what is, at least domestically, very fragmented.”
Different Customers for Different Sectors
The customers are different in each sector, according to Weber. Those visiting the large destination parks are making a significant investment, funding an expensive visit every two, three or five years, and tend to be drawn from the middle/upper income bracket.
Regional parks rely on day visitors who might buy a seasonal pass and make multiple visits, spending hundreds of dollars over the course of a year.
“It’s pretty middle income, with some lower/middle income, clientele. And, the repeat segment of the regional space is very important.”
Then there is the local sector, operating within a smaller geographic sphere, where the middle/low income visitors spend half a day and will spend in the region of $25-$50 a person. Customers are impulsive in terms of visitation, but can be relied upon to visit on average every couple of months.
“So, again, we all do the same thing, ” explains Webber. “We create escape and memories for people, but we do it at different scales of the business.”
(Above: Al Weber now and in his youth working the rides)
Competing for Time
The local space, he says, is essentially more economic-resistant than the big destination sector or the middle-ground regional sector, because the customer outlay is less.
“Small amusement parks; water parks – the economic commitment is less, therefore it’s a better competitive position to be in, especially if there are economic downturns.”
One unique point he likes, particularly concerning the FEC space which, for the most par, t is run on a pay-per-attraction basis, is its flexibility. Because there is no admission price or parking price, the customer can spend as much or as little time and money as they choose.
“Consumers today are way over-programmed. This kind of fits within a person’s scheduling in a more meaningful, easier way. So we really like that segment of the overall space.”
Weber says the real competition is for customers’ time.
“On every scale, getting the right piece of land, the right location at the right price, being able to build something and get a good investment is challenging. In all cases, in a relatively mature market, barriers of entry are meaningful. And in the parks we’ve looked at – all well established for decades so the market is known very well – the biggest matter is always competition for time more than anything else.
“For years, we’ve done research on the different consumer mind-sets. Interestingly there are usually two main factors. People who have money but their schedule is tight and very programmed. And people who have time on their hands, but the economics are more meaningful to them.”
Guest Expectation, Technology and Socialisation
Weber feels that what all sectors do well and that the smaller, local sector does exceptionally well, is to allow people to spend time with each other. He’s clear that the socialisation aspect is crucial to why people come.
“The hardware of the attractions is really secondary to creating the memories and the socialisation, and that’s why people come, so you have to create environments that are very supportive of that, in your sector.”
Are customer expectations changing, in our increasingly high-tech age?
“Often, the technology takes you away from the face-to-face socialisation piece we offer, which is why I think we are still very relevant today. People need to spend time with each other, not just via a technological connection.
Hunger for the New
“But people’s expectation… There’s always a little bit of hunger for something new. It doesn’t have to be high-tech new, just what’s news. Why should I come out today when I just came out last month? What’s different?
“So, the expectation is that you are current and relevant. That’s not necessarily driven by technology, though technology can be a solution.”
He says the single biggest reason people visit a park is because they had a great time the last time they came.
“And, that’s often all the ‘soft’ things: it’s about is it clean, is it safe, is it good value, did they have a great time with their friends? So, their expectations may change from year to year, but if you’ve satisfied the guest expectation; the guest satisfaction piece, you’ll continue to do well in business.”
The Price of ‘Wow’
According to Weber, the major challenge at the mid/small scale business level is deciding ‘the price of ‘wow’.
“Harry Potter was what: $300 million? But, what do you do for half a million dollars? On our scale, what makes sense? So, the price of ‘wow’ is what we think of – what’s new, different.”
Many of the FECs have, for example, added water products. This makes sense if it is done in as creative a manner as possible. Adding water is inexpensive and it creates something new and adds another revenue stream.
“But, maybe as important as that challenge is really understanding your brand and delivering on that brand promise consistently. We presently operate Boomers!, SpeedZone and Big Kahuna: all FEC brands. Each has its own nuance; its own brand promise that the consumer connects with and expects. And brand thinking is not necessarily something that permeates a lot of companies. So to be focused on that creates tremendous opportunity for us.”
The Future for Apex Parks
Weber sees the fragmented nature of the local space as a fantastic opportunity.
“When you move from park to park you gain a lot of knowledge from different regions, different teams and different circumstances. When you run a company with multiple locations the learning curve is accelerated. This is because you have multiple points that you’re getting experience from. If you’re smart about applying that, it’s a way of really growing the space.”
There are a few players in this local space. The acquisition of the fifteen parks from Palace Entertainment gave Apex Parks Group sufficient scale to create a corporate environment that could focus on certain strategies, involving park managers in setting those strategies.
“The Apex Group started as a small player and it ultimately will be THE player in the space.
“The opportunity exists to double, even triple our size in the next years. There hasn’t been a buyer in that space for some time; the space is often capital-starved; not a lot of new-ness has been put in so there are turnaround opportunities in good markets with nice well-positioned parks that we think we can pick up and do our special sauce to; and create something of nice value and improved entertainment products for local markets.”
We like the Waterpark Space
“You know, it’s funny. Sahara Sam’s is a tremendously well-built, great piece of product. Stand-alone, (in terms of inside water-parks and hotel space.) Of course, like any indoor water-park, there’s always a piece of outdoor that gives you added capacity in the summer. Even the Great Wolf Waterparks and the Kalahari Waterparks, the big players, have that.
We liked the waterpark space, we knew the gated space – most of my career has been gated space-oriented – we studied the site, it’s in a tremendous position in the market, and most of our operations today are in warm-weather climates. We’re in Florida. We’re in Texas and in California. So, almost all of ours are outdoors. This indoor idea allows you to operate basically year-round. They’re open when school’s out of session, which gives them about 250-ish days, year-round entertainment for folks in adverse climates: it’s always 84 degrees inside that location; warm water.
A Larger Scale-Point
The park is extremely well-run. We really like Ilya Girlya, CEO of Sahara Sam’s, and his group – they know the space really well; they have a well-deserved reputation for innovation and excellence, and buying Sahara Sam’s has created a larger scale-point for Apex to work from.”
In September, Apex announced their acquisition of Indiana Beach Amusement Resort (shown below). Located on the banks of Lake Shafer in Monticello, Indiana, the 376-acre resort celebrates its 90th anniversary next year. Highlights include one of the top wooden roller coasters and steepest drop steel roller coasters in North America. The complex offers more than 1200 accommodation alternatives, including 42 in-park motel rooms, 114 cabins, cottages & townhomes, over 1180 campsites and 100 boat docks.
Weber describes Indian Beach as ‘a jewel of a resort’ and ‘a fabulous addition for us”:
“The Indiana Beach management team has been really helpful in teaching us about their market and the history of the park. John Collins, the General Manager, is very dedicated to making Indiana Beach great once more and leads a fantastic team. We’re really looking forward to working with them all.”
Buying Apex Parks a ‘no-brainer’
“The thing that made buying Apex almost a no-brainer for us is the fact that we knew the people who were in the business. Many of them worked for me [when he was President and CEO of Palace Entertainment] in 2007.
“It starts with the people. Our view was not to be centrally controlled and corporate. We wanted to create a collaborative environment with strategies that target market opportunities. That’s critical in terms of our success and we’re really pleased we have a strong team here.
“We’ll continue to grow our corporate group as we grow our scale. It’s always important, in our view, to have extremely strong financial business leaders in the field. They understand the strategy and are collaborative in how to run the business forward.”