Category Archives: Behind the Scenes

Second Sunday with Richard Kinzel: Cedar Fair CEO says market will thaw

From the Sandusky Register

SANDUSKY

As amusement park companies go, Cedar Fair is the industry’s juggernaut — it owns 11 amusement parks and six water parks throughout the U.S. and Canada.

Even in Sandusky, home of Cedar Point amusement park, news coverage in recent months has concentrated on Cedar Fair as it mulled an acquisition by New York private equity firm Apollo Global Management.

The deal fell through, leaving Cedar Fair to battle the recession and debt problems.

Which leaves everyone wondering: How is Cedar Point doing?

When Richard “Dick” Kinzel, 69, president, CEO and chairman of Cedar Fair sat down for a “Second Sunday” interview after months of requests, the Register concentrated questions on the local amusement park — Cedar Point, rated “the best amusement park in the world” for 12 years in a row by Amusement Today.

Q: How does Cedar Point fit in your mind in the Cedar Fair empire? Do you still see Cedar Point as the crown jewel, or realistically, is the attention shifting to those parks in the southern U.S., where you have a growing population?

A: No, Cedar Point is our crown jewel and always will be. This is our biggest entity. We have 1,400 hotel rooms. We have four hotels here. Two marinas. We have the largest amusement park in the world here — 17 roller coasters, over 70 rides.

Our top season was 1994. We did 3.6 million (annual visitors). Now we do about 3 million.

We can be a profitable company if we manage our expenses. If we can manage our expenses, and keep our hotels full and give the customer good value, this will always be our crown jewel.

No other park has what we have — Lake Erie, the beach, 1905, Knute Rockne, John Phillips Sousa, the history, the tradition. People have been coming here for years.

Our worst enemy that I worry about is ourselves. We have to keep the quality that people expect to be here.

Q: How disappointing is it to you that Shoot the Rapids opened late? Do you feel the availability of a new ride plays a lot in people’s decisions on coming out, or is it more of a minor blip?

A: It’s a major blip. It was a minor blip until we got to Memorial Day weekend. At that point, the weather’s a little chilly, and a flume ride didn’t have that much appeal. But certainly, once it got delayed and then it got delayed again, that was a major disappointment. As you know, we’ve had some problems with it, from electrical (since the ride launched June 26).

This is not new technology. We’ve had flumes at Cedar Point since 1964. The engineering was done wrong in Germany. We’re trying to correct it. And I got e-mail today from our manufacturer, Intamin, that the problem has been corrected. Hopefully it’s done now, and it’s going to be running correctly the rest of the summer.

Q: What problems have you had?

A: Some of the things we had to compromise with. We intended to have the height restriction at 42 inches. And we raised that to 46 inches. We intended to have more capacity. We had a 10-passenger boat. And because of the problems with the boat, we had to make that an eight-passenger boat. That cuts 20 percent of your capacity. And we’ve had electrical problems.

It certainly has not been because our maintenance department or our people have not worked 24-7 to get this thing in operation. Basically, it’s an engineering problem the manufacturer has had. They’ve assured us they’re going to get it worked out.

It’s very disappointing. You spend $11 million on something; you’re only open 140 days. It’s only been open nine days, and we’ve had a lot of down time.

Q: How has the rise in indoor water parks such as Kalahari and Great Wolf affected you? Is it an overall plus?

A: You know, I think it is. Certainly it hurt Castaway Bay. Because (Kalahari owner) Todd (Nelson) did a really good job with that. They’ve got everything you want in an indoor water park. We’re sort of more of a boutique facility. What we can offer is what they can’t offer — we have early entry into the park and coupons to get into the park and things like that.

They’ve certainly hurt us as far as our occupancy goes (at Castaway Bay). But on the other hand, if people come to stay in Kalahari, they’re certainly going to visit the best amusement park in the world. Along with going to the water park, they’ll still go to Cedar Point.

We welcome all competition in Sandusky. If we can get them into Sandusky, we feel pretty certain our entertainment package is such that they’ll come to Cedar Point.

Q: This is one of my few Cedar Fair questions: Where do you stand on the effort to refinance debt? Is that still on hold until the markets settle down?

A: It really is. Peter Crage and I, our chief financial officer, we hit the road three weeks ago. We were told by our bankers at that time, there was money. The bond markets had loosened up. The money was very reasonable. I’m not exaggerating. The minute we got in to start the road show, within 20 seconds, it was on a Thursday, they told us that the markets had crashed. At that (time), if you remember, Korea, and Israel, and the oil spill was hitting its peak. The markets just went berserk on us. What our advisers are telling us is just to wait, just be patient. We still have until 2012, so we still have time …. We can be patient and we will be patient, because every interest point is a lot of money.

Q: What is Cedar Point’s most successful ride ever? I don’t mean tallest or fastest or scariest — what’s the ride that was such a huge success that you guys said, “Boy, we’re sure glad we put that ride in.”

A: Probably the Magnum XL 200, in 1989, when we put the first 200-foot coaster in. The other one was in 1976, when we put the Corkscrew, the first coaster that did a helix and the 360.

The one that people really talk about is that first 200 foot. Nobody had really done that before …. The Magnum is the one that really made Cedar Point the coaster capital of the world.

When you go back to 1976 when we put the Corkscrew in, that changed the whole dynamics of the amusement park industry.

Q: How does Cedar Point decide what its next new ride is going to be?

A: We visit other parks. We see what’s new in the industry. We talk to other manufacturers. We try to get a feel for what people like, what they don’t like.

All the parks are different. Cedar Point, for example, we mix a family ride in for every other time or every third time. We go for a thrill ride probably two out of three rides. We put a thrill ride in, that really turns the turnstiles.

Q: So I guess the recession sort of slowed down that thrill-ride timetable. What can you tell us about next year’s thrill ride, and when is it likely to be announced?

A: Just backing up a little bit, the flume ride (Shoot the Rapids) was really due to be introduced last year, but the economy turned. Remember that in November of 2008 the banks crashed. We had a pretty good feeling it was going to be a bad year … so we put that off for a year.

It’s going to be a great ride. All thrill rides aren’t coasters. It’s going to be something that I think the teen market is really going to like.

We really plan on announcing that in the middle of August. That’s when we have our season passes for next year. Not especially Cedar Point, but in other parks, the season pass business is so big, we try to get a jump.

Keeping Cedar Point pretty

From toledoblade.com

SANDUSKY — Vertical thrills abound at Cedar Point, but Tom Roberts is about the green, not the scream.

His task is creating visual comfort to soften these 364 acres of mostly asphalt, concrete, and steel for the 3 million people who visit each year.

“If it were not there, you would notice. It’s always in the peripheral vision of people,” says Mr. Roberts, the landscaping supervisor and a 1969 Bowsher High School graduate. “It’s almost like being an entertainer. Every day you have an audience and you want to leave them thinking, ‘Wow! Is that Cedar Point beautiful!'”

Framing the image of the 1870-vintage park are trees and bushes of all sizes and bloom times, tens of thousands of annuals being planted into June, hundreds of flower-packed pots, hanging baskets, and dozens of varieties of ornamental grasses. There’s the 32-foot-by-50-foot American flag planted last week with red and white begonias and blue ageratums. The hybrid tea roses that were here when he was hired to pull weeds 37 years ago have been replaced by nearly 500 of the fairly new Knock Out variety, easy-care, repeat bloomers that resist diseases such as blackspot.

He knows that creating shade is essential. So is green screening and defensive flora, such as hedges that deter people from traipsing through flower beds.

“The more you can make it people-proof, the better off you are,” says Mr. Roberts, 59. “It’s quite a garden when you see it as a garden and not just a big old amusement park.”

In jeans and work boots, he’s on his phone and two-way radio, climbing in and out of his truck to talk with contractors who exterminate pests and tend to the big trees. He calls a staffer about a protruding hose near the paddle-wheel boat ride, and later, about a small sinkhole at Cedar Point Marina.

In front of Bay Harbor restaurant, famous for sunset watching, a rocky swale that accepts water runoff is beautifully arranged with Japanese blood grass, adagio grass, a gnarled weeping birch, hostas, Japanese maples, dwarf blue spruce, and spirea; a few were transplanted from elsewhere in the park.

“Some of the plants get moved like furniture,” he says.

A boater who keeps his float at the marina, Mr. Roberts eyeballs lake conditions whenever possible. “Whitecaps,” he notes one day earlier this month. “Prevailing winds from the southwest.”

He was hired as seasonal help in 1973, a year after another Toledo native, the park’s longtime CEO, Richard Kinzel, came to work in food operations. Mr. Roberts had just earned an education degree at Bowling Green State University, but classroom jobs were scarce. Six years later, he was running the department.

“I really took to it,” he says. “Grass has been good to me.”

The year-round staff of seven is augmented by 14 people hired March through Labor Day. “I’m just the ringmaster.”

A crew of six mow grass from 5 to 9 a.m. daily, four to six others plant and maintain flowers, and three water from midnight to 8:30 a.m. and during the day as needed. When the park opens, most of the landscaping staff heads for other parts of the property.

Each time a new ride is built, landscaping is installed. When the marina was renovated, lawns and plants went in. There’s a pair of hotel grounds to look after: the Breakers and Sandcastle, and an RV campground.

More than 100 new cottages and cabins constructed at Lighthouse Point in 2001 and 2004 required substantial landscaping between each of the dwellings, as well as perennials and grasses around a new rocky pond.

“Whenever you put something in, you have to know the ramifications of caring for it. Everything requires some effort if you want it to look nice.”

Take blue lyme grass. Planted in several places, it can tolerate strong winds and sand, but it’s invasive and creeps under the train’s tracks to the chagrin of the engineer.

Mother Nature provides Mr. Roberts’ greatest challenges, ranging from the occasional ferocious storm whipping off Lake Erie to the sand that blows constantly into grass and beds. “We shovel it out, scoop it, whatever it takes.”

Geese make messes and eat new grass. Rabbits are voracious munchers too.

“Everything we do here the homeowner can do,” he says. “If somebody takes the initiative, they can learn a lot.”

Fall and winter, the permanent staff rakes tons of leaves, prunes, and shovels snow from locations where the 250-year-round employees work.

In the do-whatcha-gotta-do category, he realized with dismay one day that a substantial section of a hedge on the midway was dead and it was too late to order a replacement.

“So we spray-painted the hedge green. It was so dense, I’ll bet not one out of a thousand people realized it was a dead hedge.”