If it's May, it must be amusement park season. Most of the regional establishments kick off their 2005 operating year this month, though it won't be until July and early August that their turnstiles really start to fly. The most popular of the parks, such as the Six Flags (NYSE: PKS) and Cedar Fair (NYSE: FUN) properties, may draw in excess of 3 million guests in any given year, with almost all that traffic coming between May and October.
The parks have been doing their part to milk more out of their properties. In November, Cedar Fair transformed one of its resorts just off the Cedar Point peninsula into an indoor waterpark resort. Later this year, Six Flags will also open a 200-suite lodge with an indoor waterpark adjacent to its Great Escape amusement park in Lake George, New York.
And, as we reported earlier this month, Viacom (NYSE: VIA) has struck a partnership with Great Wolf Resorts (Nasdaq: WOLF) to open an indoor waterpark resort at its Paramount's Kings Island destination. Yes, that kooky hospitality industry trend that started out in the Wisconsin Dells has graduated to the amusement park chains. Indoor water parks are everywhere.
The emphasis on producing more active off-seasons has paid off as Cedar Fair and Six Flags have been able to grow revenues during the typically sleepy December and March quarters. Cedar Fair's top line grew by 12% and 7%, respectively, while Six Flags has seen its revenues advance by 11% and 21% over the same two periods.
That's important. While major corporations like General Electric's (NYSE: GE) Universal, Viacom, and Anheuser-Busch (NYSE: BUD) also operate amusement parks -- many of which are in Florida and California where the parks are open all year long -- Cedar Fair and Six Flags live and die exclusively at the gate. They don't have financial services, cable networks, or brewskis to balance out the seasonal turbulence.
That's why the operators will spend the next few months hoping for kind weather as well as a respite in gas prices. While soaring fuel costs aren't likely to keep the locals away, the parks would clearly prefer more disposable income in patrons' pockets.
So while solstice watchers may point out that summer is officially a month away, the amusement park operators know better. Summer's here.