COVID-19 & Coasters: Coronavirus Impacts on the Amusement Industry

[BGWnut]

In other news, I just read something that probably should have been obvious but didn't really register in my mind till I saw someone talking about it:

Schools all over are cancelling field trips and all other away-from-school activities left and right. Many of the regional parks rely on attendance from things like band and cheerleading meets to make opening on certain days make financial sense. Last year there were Fridays at BGW during the spring where I swear it felt like there were 20 normal guests sharing a park with thousands upon thousands of school kids. Without that attendance... Ouch.

So BGW doesn't sell those tickets to the school. They sell them to companies that organize those events and BGW is just a portion of the trip. Those tickets were already paid for months ago and it's unlikely that BGW would refund them a significant amount of that money. If anything it might just mean that in the fall those companies might not need to re-up and buy more like they currently do. Typically they buy an amount that they anticipate will be all year and then buy a much smaller group in the fall.

 

[mountaineers]

As much as it saddens me BGW should postpone opening day at this point.

This. Once public gatherings are starting to be banned (i don't think in Va yet but not far off in the future) BGW really has no leg to stand on to remain open. Plus they may face backlash from local residents for not doing whats right for the health of the residents. I know tourism is huge for the local economy but flattening the curve will save lives. One thing that flattening the curve also does is drag out the length of the epidemic. I've Unfortunately seen projections of this lasting through the end of summer. Best case scenario is less than 2% of the population is infected at any one time.

 

[BGW Family]

On top of NC's State of Emergency notice, all major colleges in the Raleigh area are moving to on-line classes with campuses being closed. Target, Kroger, Walmart and Publix have announced restricting hand sanitizer and other “virus-related items”. Limits are 1 to 6 per person depending on retailer. The State of Emergency helps protect from price gouging, too.

I found this article interesting.
How long does coronavirus live on...

 

[GrandpaD]

The Spring influx of thousands of school kids is "Spectrum" and "Musicale" band competitions. It's organizer is in Richmond. There are a lot of buses bringing school kids in each weekend. The latter had 15 dates! That's a lot of lost revenue. What @BGWnut says may be true regarding refunds in a normal situation, but because of the pandemic, they might work out something for this firm they've worked with for a good many years.

 

[Beachokie]

As much as it saddens me BGW should postpone opening day at this point.

100%

 

[warfelg]

The Spring influx of thousands of school kids is "Spectrum" and "Musicale" band competitions. It's organizer is in Richmond. There are a lot of buses bringing school kids in each weekend. The latter had 15 dates! That's a lot of lost revenue. What @BGWnut says may be true regarding refunds in a normal situation, but because of the pandemic, they might work out something for this firm they've worked with for a good many years.

My former High School (Hempfield High School in Lancaster, PA) is still planning on making it's trip down here. I volunteer each time they come as a "local guide" for anyone, and in the park I act as an "unknown chaperone". Meaning I help them in making reservations, knowing where to go, and in the park, because kids don't know me, I text back to school administrators anyone with a Hempfield shirt doing something they shouldn't be doing.

They haven't cancelled yet, but I do know that they're coming up with a "Plan B" with other local high schools. So far their plan is to just not come down, but to do a mid-summer 3-day weekend trip for anyone signed up and do a KD and Busch Gardens day for Hempfield Students with a historical day in Richmond.

 

[UncleDuncan]

After reading the news this morning, I think the conversation is going to turn from if business shuts down to when business shuts down. Not a bold prediction but I would guess we're days away. First schools. Then government. Then non essential services (amusement included). If I had to guess, within 10 days.

 

[warfelg]

After reading the news this morning, I think the conversation is going to turn from if business shuts down to when business shuts down. Not a bold prediction but I would guess we're days away. First schools. Then government. Then non essential services (amusement included). If I had to guess, within 10 days.

Without a pay protection in place I think that's very hard to do. There's small businesses that might never recover if they lose a week of income. There's people that could end up evicted if they can't have an income. There's cars that can be repossessed, utilities shut off, insurance lost.

I think in the amusement industry, there's going to have to basically be an industry wide agreement on how to present Q1/2 numbers to help each other understand the impact of COVID-19. And I think the smartest thing they could do, is have SEAS, CF, SIX, and try to loop DIS and UNI into this; and present your numbers together rather than on their own like they used to.

 

[Jonesta6]

Sounds like a movie plot...

 

[rswashdc]

Without a pay protection in place I think that's very hard to do. There's small businesses that might never recover if they lose a week of income. There's people that could end up evicted if they can't have an income. There's cars that can be repossessed, utilities shut off, insurance lost.

I think in the amusement industry, there's going to have to basically be an industry wide agreement on how to present Q1/2 numbers to help each other understand the impact of COVID-19. And I think the smartest thing they could do, is have SEAS, CF, SIX, and try to loop DIS and UNI into this; and present your numbers together rather than on their own like they used to.

The parks problem is going to go beyond a few weeks lost revenue to the potential for a complete shift in revenue overall. This isn't a couple weeks problem and could easily be a new normal until a decent vaccine is in place. Even afterwards, travel and leisure could see a 20-40% reduction in demand from the economic fallout. Can SEAS, CF, SIX, etc. survive that and make debt payments. SEAS would worry me with their recent capital investments. Those investments almost certainly were based on a good economy and not a severe downturn.

 

[warfelg]

The parks problem is going to go beyond a few weeks lost revenue to the potential for a complete shift in revenue overall. This isn't a couple weeks problem and could easily be a new normal until a decent vaccine is in place. Even afterwards, travel and leisure could see a 20-40% reduction in demand from the economic fallout. Can SEAS, CF, SIX, etc. survive that and make debt payments. SEAS would worry me with their recent capital investments. Those investments almost certainly were based on a good economy and not a severe downturn.

Totally agree, which is why I believe that they need to get together as parks, and with ride manufacturers and come up with a plan, and announce as an industry.

 

[VonDerrick]

I think in the amusement industry, there's going to have to basically be an industry wide agreement on how to present Q1/2 numbers to help each other understand the impact of COVID-19. And I think the smartest thing they could do, is have SEAS, CF, SIX, and try to loop DIS and UNI into this; and present your numbers together rather than on their own like they used to.

This sounds pretty ridiculous ... investors aren't clueless to recent events. Investors know that stuff is happening, what they expect is for these companies to make a hopefully accurate prediction of how bad the losses will be and what the game plan will be to bounce back and recoup any losses.

 

[warfelg]

This sounds pretty ridiculous ... investors aren't clueless to recent events. Investors know that stuff is happening, what they expect is for these companies to make a hopefully accurate prediction of how bad the losses will be and what the game plan will be to bounce back and recoup any losses.

Why is it ridiculous to suggest that an industry come together and discuss how they plan to come through this crisis with as much mitigation to loss as possible. Its exactly what the Detroit Automotive industry did during their crash.

Not everything is about investors. How do they make the public feel safe coming out? How do they make sure there's an 'industry standard' to preventing spread of anything? How do they counter the much more visible sports league shutting down? Or flights to some countries being restricted? States that are impacting individual parks more than others?

Communication in an industry even as competitors in a situation like this is important.

 

[..…]

Having just spent the last 10 minutes sifting through Facebook-and-Twitter-level political trolling in the Coronavirus threads (wasn't there just a long discussion about how trolling is unacceptable?) hoping to find a discussion on what I believed was purpose of this forum (the amusement industry, not opinions on the healthcare industry), it doesn't look like BGW has made any statements about the impact of the virus on opening weekend at this point. Has anyone heard anything about precautions they're taking, and whether they'll even be open this weekend?

 

[Jonesta6]

It's a counterintuitive thought process, but you're onto something - I remember long ago in a different career seeing something about how being friends with your competition is better for business than being enemies. I think in that case it had to do with public perception of that given industry - car dealerships.

 

[UncleDuncan]

Without a pay protection in place I think that's very hard to do. There's small businesses that might never recover if they lose a week of income. There's people that could end up evicted if they can't have an income. There's cars that can be repossessed, utilities shut off, insurance lost.

I think in the amusement industry, there's going to have to basically be an industry wide agreement on how to present Q1/2 numbers to help each other understand the impact of COVID-19. And I think the smartest thing they could do, is have SEAS, CF, SIX, and try to loop DIS and UNI into this; and present your numbers together rather than on their own like they used to.

Not arguing that point - my heart sinks when I think about the impending fallout. But the cards are what they are and we are not going to be able to operate normally, even under limited conditions. The risk is just going to be too great.


Also, sort of related, even if business kept their doors open it won't matter if everyone either stays at home because they're sick or they fear getting sick. So there's that too.

 

[warfelg]

Not arguing that point - my heart sinks when I think about the impending fallout. But the cards are what they are and we are not going to be able to operate normally, even under limited conditions. The risk is just going to be too great.


Also, sort of related, even if everyone kept their doors open it won't matter if everyone either stays at home because they're sick or they fear getting sick. So there's that too.

Since we’re in the amusement industry version of the thread I’ll keep it on that and some ways to help:
1- Tax breaks for doing certain things is number one.
2- Again this is industry wide, but pay all full time employees, do a stipend for part time. (Luckily most parks haven’t opened yet up here).
3- Prorate rent for leases of outside vendors that don’t come in for illness reasons.
4- Offer refunds on prepurchased tickets to make people ok with not coming.

But this is something one park can’t do alone. It needs to be done industry wide. Like any parks with character meet and greets should stop them right now. Any rides with VR/3D elements should stop using them.

 

[VonDerrick]

Why is it ridiculous to suggest that an industry come together and discuss how they plan to come through this crisis with as much mitigation to loss as possible. Its exactly what the Detroit Automotive industry did during their crash.

Not everything is about investors. How do they make the public feel safe coming out? How do they make sure there's an 'industry standard' to preventing spread of anything? How do they counter the much more visible sports league shutting down? Or flights to some countries being restricted? States that are impacting individual parks more than others?

Communication in an industry even as competitors in a situation like this is important.

I don't have the time or effort . . .

 

[rswashdc]

Since we’re in the amusement industry version of the thread I’ll keep it on that and some ways to help:
1- Tax breaks for doing certain things is number one.
2- Again this is industry wide, but pay all full time employees, do a stipend for part time. (Luckily most parks haven’t opened yet up here).
3- Prorate rent for leases of outside vendors that don’t come in for illness reasons.
4- Offer refunds on prepurchased tickets to make people ok with not coming.

But this is something one park can’t do alone. It needs to be done industry wide. Like any parks with character meet and greets should stop them right now. Any rides with VR/3D elements should stop using them.

Most the parks don't have enough cash on hand to do this for long. Without revenue, the parks will become insolvent at some point and tax breaks don't help on that side of the cash flow. If this is a 3-6 month issue, solvency becomes a real issue.

Looking at the limited reopening of Shanghai Disney isn't promising for what is even feasible for a park to do in this pandemic. That limited opening can't be bringing much revenue in and isn't sustainable.

 

[warfelg]

Most the parks don't have enough cash on hand to do this for long. Without revenue, the parks will become insolvent at some point and tax breaks don't help on that side of the cash flow. If this is a 3-6 month issue, solvency becomes a real issue.

Looking at the limited reopening of Shanghai Disney isn't promising for what is even feasible for a park to do in this pandemic. That limited opening can't be bringing much revenue in and isn't sustainable.

Hence why park chains should come together to figure out what to do as an industry rather than have everyone do something different.