While projections for this summer are optimistic, it appears even the biggest names in waterparks and recreation business are feeling the impact of the economic downturn.
Before the end of the summer, Six Flags Inc. may be forced to file for Chapter 11 under the U.S. Bankruptcy Code. Though the New York company reported revenues of $1 billion in 2008, it also reported a net loss of $207 million, and company stock value fell so low it was delisted by the New York Stock Exchange recently. According to reports, the company is carrying significant debt.
The story is similar at MGM Mirage, based in Las Vegas; Universal Orlando in Florida; Cedar Fair Entertainment Co., Sandusky, Ohio; and Busch Entertainment, currently owned by A-B InBev, headquartered in Leuven, Belgium.
“Even the big players are not immune to the downturn,” said George Van Horn, a senior analyst at IBIS World, a Los Angeles industry intelligence firm
The Magic Kingdom bears that out as well. Last month, Burbank, Calif.-based Walt Disney Co. — which operates Disney’s Typhoon Lagoon and Disney’s Blizzard Beach waterparks, in
Orlando — announced a 46 percent decline in profits for the second quarter of 2009, compared with the same period last year. In March, the entertainment giant laid off nearly 2,000 employees in its theme parks, according to reports.
“We are being extremely realistic about the global economy and the challenges we face,” Robert Iger, Walt Disney Co. CEO, said at the March annual shareholder meeting in Oakland, Calif.
And with industry experts forecasting a continuation of the “staycation” trend this summer, Disney and other destination attraction operators may be forced to cut back even more.
Despite the uncertainty, operators anticipate this summer will be the same as always as far as the guest experience goes.On the back of heavy promotions, news reports stated that Orlando theme parks, including both of Disney’s waterparks, reached capacity during the Easter week.
“Our parent company is looking into some options regarding the restructuring of our debt, but this has no bearing on Six Flags White Water’s day-to-day operations, or any of our parks for that matter,” said Hela Sheath, spokesperson for Six Flags White Water, located in Marietta, Ga.
“It’s business as usual as we are gearing up for another great season at both of our parks.”