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MAZ

Jan 30, 2014
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I have seen a lot of commenting in different threads about how people dislike the park's decisions relating to cutting costs. The latest being the 'reduced' operating hours. Really, I just want to know everybody's own idea of what should be cut and what shouldn't have. Where would you cut costs? Close another restaurant? Level all of the shrubbery and dismiss the landscaping department? Ditch the tram and make em' walk? While these are obviously silly, I want to hear some 'logical' ideas from you guys. Anyone?
 
Dec 23, 2011
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RE: Cutting costs OUR way.

I actually think getting rid of the trams maybe one of the best ways to cut costs. It would be very simple and easy to just have people walk along the tram road to and from the parking lots, heck people already have done it during thunderstorms. The only trams you couldn't cut would be for the overflow parking since there is no safe way to cross Rte. 60.

However, people are lazy and would rather wait in line for 30 minutes to ride a 5 or 10 minute tram ride when if they just walked they could get there faster and be more healthier.
 
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wombat96

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RE: Cutting costs OUR way.

Keep the trams. Little things like trams make the guest feel pampered and give a positive experience at the beginning of the day and even at the end of the day.
 
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Nov 2, 2011
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RE: Cutting costs OUR way.

From the crowds that have been at the park on the days I went, they need to cut nothing. You can't tell me they are not making money. Sure it cost a lot to open the park everyday, and even us passholders who don't have to buy a ticket every time: we spend money in the park. I think its just miss managed funds ever since they went IPO it has been this way. The stockholders are yelling for a bigger piece of the pie. We were better off family ran not big corprate greed run. Just my 2 cents worth.

[punctuation added by Nicole]
 
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MAZ

Jan 30, 2014
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RE: Cutting costs OUR way.

Yeah...I threw that one in there for your amusement Matthew. I ran out of breath reading your post Bama, but I think I understand that 'you would not cut anything, and you used to like the park more than you do now'.. I agree Connor. The tram is needed. But what I'm looking for is a way to cut the cost of the tram without its removal.
 
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Dec 23, 2011
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RE: Cutting costs OUR way.

Connor said:
Keep the trams. Little things like trams make the guest feel pampered and give a positive experience at the beginning of the day and even at the end of the day.

Now you're starting to sound like the park executives.

Actually, a common complaint I hear from people is how long it takes to ride the tram. The lines to get on the trams can get really long and it frustrates people that it is just another line to stand in. Sure some nights it can feel like a luxury, but it really becomes an annoyance especially at the end of the end of the night when it takes forty five minutes to even get near the tram.

Now as far as getting rid of them completely there are two ways they claim it's a good thing. One being it promotes their environment friendly initiative. It reduces the amount of propane and diesel fuels being used. Second, they can claim it as a health initiative to promote more walking to places instead of driving.

Also, as I briefly mentioned, the park has stopped using trams during thunderstorms and people walk out along the tram road and through the parking lots with no problem.

However, it is true that some people feel pampered and I'm sure there would be some backlash, but after a season or two without them, some people would get used to it and really wouldn't mind it. After all, you're going to a theme park. Walking is all you will be doing all day, what is another 10 minutes of it?
 

Zimmy

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RE: Cutting costs OUR way.

If this is a true finance exercise we need to establish our debits and credits.  Now obviously I am not going to build a balance sheet or any other financial document here, we do not have time or numbers.  But we can make some assumptions.

All this below is my best guess based off observation over 34 years and past performance numbers from other parks.  Unfortunately the park sucks at marketing and does not capture any demographically useful data.  When they do ask the public questions, they tend to skew the results by loading the question banks. I do not remember the exact phrasing but last summer it has been reported that the LR question bank included questions that assumed you came to the park because of LR.  

Credits:
1. Ticket sales
2. In park sales of food, goods, services, and upgrades
3. In park advertising
4. Annual pass sales.  (probably the least important in terms of gross rev.)

In park advertising and in park sales are probably the two largest contributors to revenues.  Ticket sales could be, but we do know that the park intentionally runs down ticket sale prices to increase the number of bodies in the park.

Why do most people come to the park?
1. Rides
2. Special events (x-mas town and HOS specifically)
3. Shows (I doubt there are significant numbers of new customers who come for shows, perhaps repeat and season pass)
4. Environment (this may bring people back and encourage them to become pass members)
5. Zoo

Debits:
1. Paying off leases on rides and shows
2. Employee costs
3. Maintenance of rides (parts)
4. Maintenance of park (parts, shrubs, trees and so forth)
5. Legal
6. Advertising
7. Development of shows
8. Development of rides

I should note in most industries, human capital is the single most expensive item.  There are exceptions, in the Airline industry it is fuel for example.  I would expect ride development and lease payments are the two highest here.

Clearly neither list is complete nor are they in any kind of order.

I am assuming we are talking about true austerity measures to make the park profitable again.  Based on the steps they have already taken, near removal of all zoo, reduced hours, and removal of the summer event they are looking for big cuts.

True austerity hurts everyone.  That is the point, so yes landscaping will take a hit, and frankly a big one since it does not do much to add value (I am defining value by monies coming into the park).  But I am getting a head of myself.

Before I get into this, I want everyone to remember a few things about corporate finance and this exercise.
1. This is a year to show profit, no one at a corporate level give 2 bits about retention of making old fans happy, they care about the finance and keeping the doors open.
2. The purpose of corporate finance is to increase shareholder wealth.  (no more, no less)  Anytime you think "That should stay" ask yourself, "what is 'x' doing to improve revenues now?"
3. This is a cold and emotionless science.  "because people like it and it makes them happy" will often have to take a back seat to earned income.
4. It is a basic equation. You have to make cuts, so you make them where it does not hurt income directly. Products that produce the most income receive the least cuts.

So where do we start?
1. You have to pay your loans so you can not cut there.
2. Cut development of new things.  If a show exists and can still function don't make changes unless it reduces cost and the changes themselves do not off set those savings.
3. Cut development of new rides.  Shelve any new concepts that are not under contract.
4. Cut maintenance.  You can not cut maintenance on rides that is asking for higher legal costs, but you can reduce what you do around the park.  Limit the landscaping to a point where it is attractive but not expensive.  Stop any unnecessary upgrades.  If faucets work leave them be, they do not need to be changed out this year.  Same holds for lights and other items.
5. Cut the new restaurant build.
6. Do not paint anything this year unless need not appearance demands it.
7. Shut down rides that are expensive to run and do help the park.  Europe in the Air is a good start.  
8. Finally cut staff and hours.  Start with security, reduce them to as small a unit as is necessary to run the park.  Cut the frequency of shows removing the need for alternate casts.  If a roller coaster can run with few operators do it.  How expensive is Dark Kastle to run?  Do people come to the park for it?
9. move as much admin to corporate as possible. Do you really need a local HR department?  
10. cut the number of trams in operation.  
11. In general assume longer lines = lower costs.  So be it.

I have just begun to scratch the surface, and as you can see it is all ugly.  None of it is here to make the customer happy.  No matter what when you make cuts it won't make the customer happy.  But that is not the point.
 

wombat96

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RE: Cutting costs OUR way.

Party Rocker said:
Now you're starting to sound like the park executives.
I'm reading too many of those Imagineering books. :p Back on topic, getting rid of things like confetti during shows that go six times won't help a lot but still put some money back into the pockets of the park that could be used elsewhere. I have to say it's really tough thinking of things to cut from the budget.
 
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MAZ

Jan 30, 2014
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RE: Cutting costs OUR way.

Zimmy said:
 Based on the steps they have already taken, near removal of all zoo, reduced hours, and removal of the summer event they are looking for big cuts.
50 million dollars worth to be exact.
 
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Zimmy

Nessie is lonely.
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Connor said:
I have to say it's really tough thinking of things to cut from the budget.

This is why you have to approach finance without passion or emotion. Is it easy, hell no, that is why a MBA is a high level and very desirable degree. A good MBA school beats the importance of impartiality, calculation, and a lack of passion into its students from day one.

When I said the "purpose of corporate finance is to increase shareholder wealth." I was not exaggerating.

If you have the correct demographic data running the numbers is the easy part. Execution is the hard part. It is easy on paper to say, "cut 15% workers and do it here, and here" it is hard to say to the worker, "sorry you have lost your job"
 
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MBAs have nearly destroyed art and culture in the Western world. To paraphrase Woody Allen, MBA is a notch below child molester in my book.
 
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In other words, the "bottom line" is not the best way to create a memorable and amazing park experience. I do appreciate that SEAS is probably past that point and well into "grab pieces of wreckage so we don't sink" mode. But releasing an army of bean counters with magnifying glasses is a good way to ruin a theme park.
 

Nicole

Administrator
Jul 22, 2013
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Getting back to the trams...

They are NOT some luxury offering to "pamper" guests. It is simply unreasonable to expect people, especially with small children or seniors, to walk from the non-preferred lots. Furthermore, getting rid of the transportation from the parking lots would most likely deter people from visiting the park, which would hurt their bottom line.
 
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