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Theme parks on a roll
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July 5, 1999: 2:57 p.m. ET
Attendance rising, prices under wraps as economy zooms ahead
By Staff Writer Jamey Keaten
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NEW YORK (CNNfn) - The amusement park business is booming, but you'd never know it by looking at the stock prices of major entertainment companies.
The good-as-a-fairy-tale U.S. economy, with joblessness low and inflation in check, has led to swelling ticket sales as Americans flock to amusement parks. Inflation at the ticket window also has been under control, studies show.
But few top park operators have enjoyed notable stock market gains this year. That includes some brand-name conglomerates: Walt Disney Co. (DIS), Universal Studios owner Seagram Co. (VO), and Anheuser-Busch (BUD), and pure park operators Premier Parks (PKS) and Cedar Fair LP (FUN).
Despite booming attendance, most theme park operators have not experienced a big boost in stock prices this year.
Part of the problem, of course, is that many of these companies aren't only park operators -- Disney's in the movie business; Anheuser-Busch makes beer and snacks and Seagram dabbles in both film and spirits.
Still, with the fundamentals strong and park operators gearing up for the years ahead with a building frenzy, experts say investors are starting to line up at the entry gates -- finally.
"A lot of investors have been calling me up to look for leisure ideas," said Larry Petrella, entertainment analyst at Lehman Brothers.
Premier Parks, for example, which bought Six Flags from CNNfn parent Time Warner (TWX) in 1998, is having a "phenomenal year," Petrella said, with season pass sales up 50 percent and attendance up 20 percent from a year ago.
Premier's shares also are up 6-1/8 this year to 35-1/4 -- a rise of 20 percent but short of the 21 percent gain tallied by the Dow industrials so far this year.
Premier has rolled out the welcome mat for visitors, recently starting a policy of charging half-adult price for kids under 48 inches tall. That was a key reason why the cost of visiting parks is down this year.
The companies themselves are mum about how well they're doing. Premier Chief Financial Officer James Dannhauser said its parks are "experiencing very good growth in both attendance and revenues," citing lower admission costs in part.
Time Warner, for its part, gets the benefit of a licensing accord that allows Premier to use its DC Comics and Looney Tunes trademarks.
And Walt Disney's theme park business is its only magic unit this year, analysts said, experiencing single-digit percentage growth in admissions.
"It's been [Disney's] only strong business really," said Jill Krutick, an analyst at Salomon Smith Barney who has an "outperform" rating on Disney shares.
Added Disney spokesman John Dreyer: "It's certainly a powerful engine for us this year. For Disney, the theme park business is going to be full of magic for years to come."
Indeed, Disney is preparing a big expansion in Southern California with "California Adventure" slated for opening in two years near its Disneyland site, and an expansion at Disneyland Tokyo to open about the same time.
Anheuser-Busch, which operates Busch Gardens and Sea World, is building a high-end animal-lovers' paradise known as "Discovery Cove," near the family amusement megalopolis of Orlando, Fla. Visitors literally will be able to swim with the sharks -- on the opposite side of a plexiglass barrier, anyway.
Premier, Cedar Fair and to a lesser extent Anheuser-Busch run "regional" parks, which draw the bulk of their visitor base from areas nearby. The parks of Disney and Seagram are "destination parks" pulling visitors from farther away.
Source: Six Flags
Park screams, or fireworks, July 4?
Several sites, especially some of those regional parks, see the Independence Day weekend as an indicator for how successful their summer will be.
"We're looking forward to a crackerjack weekend," Fred Jacobs, a spokesman at Busch Entertainment Corp., said. "But you may want to call me Tuesday to see if I'm still smiling."
Jacobs said Busch's attendance records are often set over the July 4 weekend, and its nine parks can tally as much as 3 percent of the 20-million person annual draw over that weekend alone.
Premier -- which runs a whopping 34 parks in the United States, Europe and Mexico -- is relatively immune to those July 4 jitters, its CFO insists.
"It's not that big of a weekend for us. It's only moderately more important for us than a typical summer weekend," said Dannhauser, insisting Six Flags can weather an economic downturn and not get too euphoric when attendance peaks.
The secret to stability, Dannhauser said, is diversifying its product slate, and keeping prices competitive enough to draw visitors. That is a key to keeping the business on track amid the travails of Mother Nature possibly dampening attendance.
Not a free fall, but prices are down
Parks themselves are beginning to chip in their share to ride the wave of interest. A recent study showed that for the first time in five years, the cost of going to a park has declined for a family of four.
Premier's Six Flags has been at the forefront of meeting park-goers half way, providing cut-rate offers designed to lure even more people through their gates.
New cut-rate entry fees for children and falling T-shirt prices have made a trip to the park less costly this year, industry magazine Amusement Business said in a recent survey.
For the first time in the five years since the trade magazine began tracking theme-park entry fees, the average price for a family of four decreased, down by $1.58 this year to $141.32.
While hardly a free fall, the drop came not from lower adult admission prices -- that cost actually went up -- but from lower kids' entry fees and the drop in the cost of souvenirs.
Leading the drop was Premier's move to set the price of admission for kids under 48 inches to one-half the adult rate at its 16 theme parks.
And Busch has a special promotion through an alliance with film maker Fuji that offers entry for a family of four to its SeaWorld park in California for $99, complete with a disposable camera.
Nashville-based Amusement Business compiles the data from the 25 amusement parks each year. Included in the calculation are the admission costs for two adults and two children, one parking charge, four fast-food meals and two kids' souvenir T-shirts. 
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