Looking at theme park performance, the 2022 season was an interesting one for the North American chains. The year started off with every chain claiming to be ready for the year to come. Many anticipated either a return to normal or even to leap to all-new performance levels. For most, mandatory attendance limitations, reservation requirements, social distancing and face masks were now a thing of the past.
Then, things got a little more complicated. New issues rose to cause complications and worry in 2022. Gas prices spiked, the war in Ukraine started, and summer air travel was a mess due to excessive flight cancellations. Plus, inflation caused the prices of general goods to increase to all-new highs.
On top of it all, the job market, which had been begging for people to come back to work, began to indicate that layoffs could lie ahead. In short, family budgets felt suddenly much tighter. And, if the past two years taught the public anything, it’s that long-term planning of trips is a risky proposition. Especially if you are looking into taking a cruise or any kind of international travel.
As such, the year did not go down as expected for anyone. But in many cases, the actions taken in the previous years had a large effect on the bottom line by year’s end. One interesting trend at many of the North American theme park chains was very soft attendance levels during the late spring to mid-summer months. Attendance levels didn’t start to pick up in many cases until late summer and the fall months. This was not true for everyone, however.
2022 theme park performance – Universal
According to the 2022 year-end report from Comcast (CMSCA), the parent company of Universal Studios theme parks, its results were off the charts. Comcast CEO Brian Roberts said:
“We achieved the highest levels of Revenue, Adjusted EBITDA and Adjusted EPS in our history and returned a record $17.7 billion of capital to shareholders.”
It seems all divisions of the company were firing on all cylinders. Growth and profits were reported by the broadband and wireless divisions and over 20 million subscribers had signed up for the new Peacock streaming service. Also, Universal Studios ranked second in worldwide box-office numbers.
As for the Universal theme parks division, the report lists an adjusted EBITDA increase of $1.4 billion to $2.7 billion. This is its highest on record and reflects a performance increase at every Universal theme park over the 2021 numbers.
Annual attendance was also said to have increased over 2021, though no specific numbers were shared. That said, in Universal’s Q2 2022 mid-year report, the company did confirm that attendance levels at the halfway point in 2022 were already above what the same theme parks saw in Q2 2019, pre-pandemic.
2022 theme park performance – Disney
Due to timing issues of its financial year that differ from everyone else, the closest Walt Disney Company (DIS) report would be its Q1 2023 report released in January, though mixed with some year-end stats released three months prior.
Over the previous 12 months, the Walt Disney Company has been through some interesting times. This included the release of CEO Bob Chapek, who was temporarily replaced by a returning Bob Iger. A time clock has been set to find a new replacement CEO to take the helm in the future.
Meanwhile, Disney has been engaged in a political battle for the landscape of its Florida resort. Issues between the company and the Florida Governor caused actions to be put in motion to revoke Disney’s control over a special tax district. This was originally formed for the theme park resort property back in Walt Disney’s era.
Reservations are here to stay at Disney
Overall, Disney reports say the company ended its 2022 year with the intent to cut about 7,000 positions. This is part of a “strategic reorganization” of the company.
A lot of the cuts and restructuring were focused on the entertainment side of the company, not the theme parks. But, after two years of increasing prices under Chapek’s run, the company was now being openly criticized by activist investors as “squeezing” theme park guests in order to generate extra profits for the company to make up for the shortfalls seen in other divisions. According to Nelson Peltz, head of Trian Partners, they felt this was an “unsustainable” practice.
Elsewhere. the company was also under fire from another investor wanting it to sell or spin off the company’s ESPN division.
Disney, as usual, kept all of its theme park attendance numbers close to the vest. Following the Q1 2023 report, Iger also confirmed that Disney would remain the only theme park company to keep requiring guests to make a reservation to visit.
Bob Iger confirmed that the company no longer wanted to trim excessive attendance trends by increasing the cost of admission. He said that he felt limiting park attendance through the reservation system was the best way to offer an improved theme park experience.
As for the numbers it did release, Disney’s reported annual revenue for 2022 was $82.7 billion. This is a 22.7% increase over 2021’s annual revenue of $67.4 billion.
2022 theme park performance – Cedar Fair
Cedar Fair (FUN) 2022 year-end reports do seem to indicate that the company has now recovered quite well compared to its struggles over the previous two years during the pandemic. It reported a record Net Revenue of $1.8 billion in 2022, up from the $1.3 billion achieved in 2021. This also includes record adjusted EBITDA earnings of $552 million for the year. This is up a reported 70% from the year prior.
Even more impressive is that all this was achieved with chain-wide attendance levels said to be slightly below Cedar Fair’s 2019 pre-pandemic levels. That is a reflection of higher guest spending trends. Total theme park attendance in 2022 was reported at 26.9 million guests, down 1 million from 2019.
Meanwhile, Cedar Fair reported that it had reduced a lot of extra costs over the year. It has paid down company debt levels and also managed to bring back quarterly dividend payments to its unit holders after a two-year hiatus. Any softness in attendance levels in the mid-season seemed to dissipate later. Most parks reported strong results during the fall and winter holiday seasons.
2022 theme park performance – SeaWorld
SeaWorld Parks & Entertainment (SEAS) had a lot to be proud of by the end of 2022. Full-year attendance at the chain’s parks was said to be 21.9 million. This shows an increase of 1.7 million guests compared to 2021. Compared to the company’s 2019 pre-pandemic levels, attendance was only down 0.7 million. Attendance issues from the impact of Hurricane Ian and Hurricane Nicole could be mostly to blame.
The chain reported a Q4 record revenue of $390.5 million, net income of $49 million for Q4 and 2022 year-end revenue of $1.7 billion (up over 2021 and 2019). Net income was at a record high of $291.2 million.
Perhaps the most impressive thing is that the chain seems to be finally recovering from the negative “Blackfish” effect. This dogged the company’s performance even before the pandemic. In addition, the strategic switch to heavily invest in adding new rides and waterslides to all of the chain’s parks year after year has helped with the performance turnaround.
This investment plan will continue, with an all-new slate of additions set to open at virtually every park in the chain over the coming weeks.
2022 theme park performance – Six Flags
Lastly, we’re going to look at Six Flags (SIX). Six Flags started off in Q1 2022 by announcing a plan to increase prices with the intent of reducing park attendance. The feeling by new CEO Selim Bassoul was that Six Flags had been giving away the parks through discount and free ticket programs for far too long. This, he felt, caused overcrowding and a lesser guest experience.
Overall, many would agree with this overall concept. However, the company seems to have struggled to find some balance in how to implement this plan of action.
In the Six Flags Q4 and 2022 year-end report, the company reported a Q4 revenue of $280 million. This was a 12% decrease from Q4 2021. Net revenue for Q4 2022 was reported at $13 million, which was actually an improvement over a $2 million loss reported in the same quarter the year before.
Attendance, however, is where things looked the grimmest. Six Flags Q4 2022 attendance is said to be just 4.1 million guests, down 30% from 2021. As previously mentioned, however, this was the intent of the CEO’s plan. Some of the sharper attendance declines in Q4 could also be attributed to the fact that a few parks which had previously been open for winter season Holiday In The Park events were instead left closed entirely.
Changes starting to have an impact
In terms of the entire 2022 year-end results, Six Flags saw total revenue drop 9% to $1.358 billion. It reported a Net Income of $109 million, said to be down 16% from 2021. Chain-wide, attendance was said to be just 20.4 million, down 26% from the 27.7 million guests reported in 2021.
Overall, the Six Flags report showed decreases in Revenue, Net Income, Adjusted EBITDA and Attendance. The only place where 2022’s performance exceeded 2021’s numbers was in terms of guest spending. This saw increases between 18 to 25%, attributed to increased costs for things across the board and the elimination of free and heavily discounted ticket programs.
Six Flags did state that it was taking some steps now to resolve some of these issues for 2023. For instance, it is lowering the price of some season passes, which were raised perhaps too high in late 2022. It has also announced some new for 2023 attractions for select parks over the past couple of months.
As the old saying goes, sometimes you have to fail before you can succeed. Admittedly, Six Flags does seem to be trying to turn things around so far in 2023. Bassoul also did say it would take time for his plan to start to show improvements to the park experience.
While it is still early in the year, we have been seeing some early signs of improvements and interest once again in what the chain has to offer at select parks. I look forward to seeing how the rest of 2023 turns out.
