The ITPS I’M4FUN Podcast welcomes Richard Zimmerman, President and CEO of the Cedar Fair Entertainment Company. Richard started with Cedar Fair in 1998 and has worked his way up in the company from General Manager of Kings Dominion to Cedar Fair’s President & COO, and is now President & CEO. Richard’s passion is to ensure the Cedar Fair parks offer families an entertainment experience that is unique, engaging, and indelible. On the I’M4FUN Podcast, Richard joins Dennis in discussions centered around the current state of our industry. He shares his insights based on his longstanding experience in park operations and his role in leading a major entertainment-based corporation.
Thanks to everyone for joining us on December 16th when we welcomed Richard Zimmerman, President & CEO of Cedar Fair Entertainment to our I’M4FUN Podcast. It was a dynamic conversation, but we ran out of time to address all questions our live audience posed to Richard. Thank you to Richard for providing follow-up answers to these questions below. For any further questions, please reach out to us at firstname.lastname@example.org.
What kind of stress do you feel Covid has placed on our industry as a whole.......short term and long term?
Richard Zimmerman: We acknowledge Covid has created the biggest disruption in Cedar Fair’s history as a public company, represented by our financial results since we were required to close our parks in March 2020. Over the long term, our parks as well as the broader industry have demonstrated remarkable resiliency after other macro disruptions. Over time we would anticipate a similar recovery post-Covid. In the near term, our objective is to return the business to historical levels of attendance as quickly as possible, 2019 representing a record year for Cedar Fair.
Curious......how do you handle the impact of the sudden changes in governmental orders for openings and closures. For example, after ramping up for the Taste of Merry Farm, if the food was ordered, what do you do with it, and how do you pivot to keep the team motivated and the guests supportive if their reservation is cancelled?
Richard Zimmerman: Cedar Fair maintains an open dialogue with state and local authorities where we operate parks and abide by their requirements. Should scheduling changes be required, we have very experienced professionals locally who manage shifts in their specific operations, including decisions on how to safely handle perishable food products, much of which we have donated to local food banks after park closures. Our park customer service representatives personally assist guests whose plans were affected by park closures, while our 2020 season passholders have had their passes validated through 2021.
You talked a bit about how revenues have been impacted due to Covid. Following up, have there been areas that have been boosted in terms of 2020 in-park spending despite the downturn in attendance for those parks that did open?
Richard Zimmerman: Despite Covid’s adverse impact on park operations and our 2020 attendance, we have been very pleased with the higher levels of in-park spending on food, merchandise, and games. Prior to the pandemic, guest spending within the food and beverage channel led the increase in our in-park per capita levels- a testament to the success of our strategy to offer guests a wide range of culinary choices, including specialty foods which are created by our parks’ executive chefs.
You said the anniversary celebrations for Cedar Point and Knott’s Berry Farm had to be postponed. How do these types of celebrations boost attendance and revenues? Will you celebrate next year?
Richard Zimmerman: In 2020, Cedar Point and Knott’s Berry Farm had planned to offer unique park entertainment and experiences for our guests in celebration of their 150-year and 100-year anniversary celebrations, respectively. Moreover, the celebratory and immersive activities planned are designed to create unique entertainment experiences for guests throughout the season, which we believe provide additional incentives to visit our parks frequently. Given the effect of Covid on the parks’ operations, we made the difficult decision to postpone those anniversary celebrations. We currently anticipate celebrating these milestone anniversaries during the 2021 season.
Guests, especially those of us that are industry enthusiasts, love the historical aspects. Cedar has been bringing back some classic rides.......what is your strategy for this and what has been the guest response?
Richard Zimmerman: We are keenly aware of the important role nostalgia plays in our entertainment portfolio and we look for opportunities to offer it where it makes sense in the park. In addition to classic rides, parks like Cedar Point, Knott’s Berry Farm and Kings Island have renovated parts of the parks’ midways as a throwback to a bygone era. We are pleased that guests enjoy the romanticism of yore and have given us high marks for such updates. We also recognize, however, that guests appreciate innovation and cutting-edge entertainment, such as our addition of the giga coaster Orion at Kings Island, so we are committed to offering a balanced mix of entertainment overall.
As you discussed, much has changed in capital expansion plans because of Covid. With those projects you mentioned that have been delayed or cancelled, how are you working with the manufacturers and vendors. Which delays do you think will be put back on the front burner first?
Richard Zimmerman: Working closely with our third-party providers, we suspended work on all capital projects in mid-March 2020 to reduce our cash burn and preserve liquidity through the Covid disruption. Since then, we have conservatively resumed select capital projects that would impact 2021 park operations. Given the uncertainty that remains around the pandemic, we continue to evaluate our near-term capital investment needs and programs moving forward.
How are you having to adjust your marketing park budgets for 2021 as a result of 2020?
Richard Zimmerman: In terms of marketing – the changes we made in 2020, and the learnings we gained from it, give us confidence that we can take a more aggressive approach to advertising in 2021, without undermining the overall integrity of the program. During 2020, we were forced to significantly reduce our overall marketing spend and lean more heavily on digital advertising and social media to connect with our guests. As we head into 2021, much of the learnings from last year will inform our approach to marketing going forward. That is not to say we are completely abandoning traditional advertising mediums. Rather, we will continue to shift our weighting to more cost-efficient platforms that also provide additional flexibility.
Is Cedar Fair looking to reduce or add properties in the future? And, outside of Cedar Fair, do you think we will see more acquisitions and mergers in the near future or fractionalization of some operating groups?
Richard Zimmerman: Strategic M&A has played a key role in the growth of Cedar Fair over the years. In 2019, we acquired the Schlitterbahn waterpark and resort properties in New Braunfels and Galveston, Texas, and Sawmill Creek Resort and Conference Center near Cedar Point – properties we were thrilled to add to our portfolio. Although M&A activity has played an important role in our historical growth, our goal post-pandemic is to return our current portfolio of properties to pre-pandemic attendance levels and beyond. Commenting on future M&A within the industry would be speculative.
You mentioned your top memories in the industry, but what would you say is the most unique aspect to you of running the Cedar Fair organization?
Richard Zimmerman: The extreme seasonality of our business is often cited as a very unique aspect, but what is most amazing is how our parks attract generations of families and the role the parks play in family traditions – parents bringing their children to the park every year, who themselves return over the years as parents with their own children. We call this “genetic vacation behavior” and it’s an aspect of the business we place great emphasis on. The true value of the entertainment we provide is in the lasting memories those families create while visiting our parks. Seeing how we have a positive impact on people’s lives is what make this business so special.
Feasibility Analysis - Design / Masterplanning - Pre-Opening Operations Planning - Management