Cedar Fair stands ready to spend big money on a new roller coaster for 2013 at Cedar Point that will change the park landscape.
Code-named “CP Alt.Winged,” the coaster will have the “longest drop, run the fastest and be the longest ride” of its kind, Cedar Fair CEO Matt Ouimet wrote in Feb. 15 memo to Cedar Fair’s board of directors.
The total projected cost of the project is $25 million, a price that includes removing the park’s Space Spiral and Disaster Transport rides and restructuring the park entrance.
Ouimet was unavailable for comment Tuesday.
Lee Alexakos, corporate vice president of marketing, declined to confirm the information in the memo.
“We have not announced any plans for 2013 but we did announce a $25 million investment,” Alexakos said. “This will be one of the largest capital expenditures ever.”
Alexakos said that with any ride or attraction Cedar Point undertakes, the company is always looking to set records.
The Swiss-based Bolliger & Mabillard Consulting Engineers is set to design the new ride, which was described in the memo as having a “Front Gate Statement— a roller coaster that flies overhead, rolls and flies back— highly visible above guests entering the park.”
The firm designed Cedar Point’s Raptor.
A winged coaster is designed to suspend riders on wings to the sides of the rails so there is no track above or below the guest.
Engineering schematics show a proposed coaster with gravity defying twists, curves and rolls.
“Rob Decker (Cedar Fair VP of planning and design) and others have done a great job of creating a compelling, economically attractive new coaster for Cedar Point,” Ouimet wrote. “We believe this particular ride design with this particular manufacturer balances the desire for marketable innovation and risk associated with early adaptations of prototypes.”
Bolliger & Mabillard designed the first winged coaster for installation in Italy at a park known as Gardaland. The Six Flags Great American park outside of Chicago also has one of the company’s winged coasters, called X-Flight.
The new ride at Cedar Point could promise to be a work horse available to guests at almost any time they are in the park.
“Rob talked to operators of the first one in Italy and found no unanticipated negatives and very high ride reliability (less than 1 percent operational downtime).
Design plans show the new ride with a 170-foot tall lift that will fly overhead of park guests entering the park. It will have the longest track and longest ride time of any coaster of its style as it flies overhead, rolls and then fly back.
The huge roller coaster will dominate the front gate and the track will travel over a large parking area at the park.
“We have several coasters that cover parking lots,” Ouimet wrote. “Not necessarily ideal, but certainly acceptable given tight site constraints and the amount of land such attractions require.”
Disaster Transport and the Space Spiral both would have to come down if the site plan currently under consideration is chosen.
Part of the $25 million investment will also include renovations and upgrades at the park entrance from the parking lot.
Cedar Point general manger John Hildebrandt was not available for comment on Tuesday.
John Hildebrandt can’t just walk Cedar Point’s midway.
He stops and greets people, he talks to employees and he picks up other people’s trash — something he does a lot.
“I carry two of these with me all the time,” Hildebrandt said as he pulled out two hand wipes from his pocket. “We keep the park immaculate for the guests. That is our promise.”
Hildebrandt picks up cigarette butts, drink containers and other trash to throw out at the nearest trash bin.
Hildebrandt is vice president and general manager at Cedar Point. He is the man who is responsible for the daily operations of the park. And he likes a clean park.
During the park-operating season Hildebrandt starts his day before he walks into the park. He said he reads reports of what has happened in the park the night before. As he drives up the causeway, as he walks the park, he is looking for anything out of place, anything not right.
As Hildebrandt walks around the park he listens to how employees interact with guests. He walks up to ride platforms and listens to see if ride operators are following the script of greeting guests and discussing the ride’s safety procedures.
As new CEO Matt Ouimet has said: It is Hildebrandt’s park.
And on the park’s 143th opening day, Hildebrandt arrived before the park opened and was there until after it closed.
“It is tradition that on opening day and on closing day I am here from morning to close,” Hildebrandt said.
SANDUSKY — Walking along Cedar Point amusement park’s Midway and arriving at a spot where a new light-lasers-and-fireworks show will entertain guests this June, Matt Ouimet, Cedar Fair LP’s ebullient new chief executive officer, can no longer contain himself.
“Isn’t that a great view?” he says, gazing across a plaza where a large video screen has been removed to reveal the towering Millennium Force roller coaster bathed in the sunlight of a cloudless blue sky.
“We really should be open today. What a great day,” said Mr. Ouimet, not bothering to conceal his pride in Cedar Point, which this day is devoid of people other than a handful of workers painting, repairing, and primping the grand old amusement park for its May 12 opening.
The excitement in Mr. Ouimet’s voice is audible, the bounce in his step visible, and the twinkle in the eye of the former Disney Co. executive perceptible.
Although he spent 17 years as a trusted Disney lieutenant running its historic Disneyland theme park and popular cruise line, it is clear that in Sandusky, the 54-year-old Mr. Ouimet knows he finally is captain of his own ship: Cedar Fair, the nation’s third-largest amusement park chain with 11 parks, including the flagship Cedar Point, plus six water parks and five hotels.
Mr. Ouimet, who also spent short stints running Starwood Hotels & Resorts Worldwide and Corinthian Colleges, was chosen last June to be president of Cedar Fair and heir-apparent to longtime company executive Dick Kinzel. When Mr. Kinzel retired on Jan. 1 after 25 years with Cedar Fair, Mr. Ouimet gained the CEO title and the keys to the candy store, so to speak.
The new CEO’s acumen as an amusement park executive is well documented — he developed and implemented a comprehensive strategic plan leading to a significantly improved and sustained performance for Disneyland’s 50th anniversary in 2005. And the Cedar Fair board clearly found in Mr. Ouimet a kindred replacement for Mr. Kinzel, whose fondness for walking the midway and riding the roller coasters revealed him to be both a top executive and a big kid at heart.
Mr. Ouimet acknowledged that if a staff meeting were to drag on too long, he isn’t above calling a halt and taking the participants into the park to ride a coaster, something he did one day last summer.
Above all, the new CEO said that he’s honored to be Cedar Fair’s new custodian and plans to take the company’s parks in directions they may not have gone before to enhance their value not just for customers, but also investors.
“A person once told me that there’s a difference between revering history and respecting history. Respecting history reminds you to look at what’s really important and learn from it,” Mr. Ouimet said. “Revering it means you never change anything, and if you don’t make change … we won’t be here in 20 or 30 years.
“And so I think that’s the delicate balance. When you’ve got such a loyal audience, you know you’re always going to have somebody disappointed that the ride they rode as a 5-year-old is no longer here,” Mr. Ouimet said. “But I hope they’re equally excited or more excited about what replaced it. I think that’s one of the hardest parts of my job is to try to figure out where change is good and where legacy is good.”
Though a confirmed Disney disciple — he still slips up and calls employees “cast members” about half the time — Mr. Ouimet said he has no plans to Disney-fy Cedar Fair.
Instead, he said, he plans to use lessons he learned from the premier theme-park firm wherever applicable at the Sandusky-based chain.
“It’s funny, but when I was considering this job I went back to the history here — there’s some wonderful books on it — and what you realize is there’s a lot of parallels,” Mr. Ouimet said. “I think the other thing that’s common here is the value system of the people who visit us and the people who work here,” he said.
“Disney was really founded on Midwestern values, and I think that, clearly in the Cedar Fair portfolio, that’s part of the DNA both for our guests and for our employees. That’s maybe why I feel as comfortable as I do here,” he said.
Last week Mr. Ouimet was having a hard time staying at his desk, the warm weather and sprucing up of Cedar Point beckoning him into the park like a siren’s song.
“So the good news is the weather was, I’m told, unseasonably warm. Clearly we’ve been able to get ahead of our maintenance and cosmetics and annual maintenance scheduled,” he said. “So the Millennium Force is almost fully painted, the Blue Streak is almost done, the Giant Wheel is almost done.”
However, special lighting for the park’s new nighttime show, “Luminosity: Ignite the Night,” is proving more complex than he imagined.
“That will be a little bit of crunch time, but that show doesn’t launch until the beginning of June, so I’ve got a little bit more time to work at night. But obviously when I open the park in May I don’t want the consumer to see a lot of construction,” Mr. Ouimet said.
At Disneyland, Mr. Ouimet and other Disney execs always were aware of Cedar Fair and its southern California venue, Knott’s Berry Farm. Disney never viewed Knott’s as a true competitor, Mr. Ouimet said, but it was always jealous of the Sandusky company’s ability to turn high profits.
“I studied Cedar Fair on and off for 20 years. They were known — and I give Dick Kinzel the credit for this — as great operators. … We studied them and marveled at the quality of the product they could deliver and still deliver the margins they delivered, because that was, candidly, where my focus was,” Mr. Ouimet said. “How could they do this and still deliver the returns they did to their investors?”
Mr. Ouimet admits he “never fully cracked the code.”
Now in control of Knott’s, Mr. Ouimet admits it would be nice if Disney executives looked his way and wonder how he does it. “I hope my former colleagues feel a little pressure. I know that they’re paying a little more attention,” he said.
If Disney officials are paying attention they might recognize a similar philosophy, a “kind of emotional sentiment” that Mr. Ouimet plans to emphasize at Cedar Fair.
“We are successful here if I can get you to come with your family and friends and laugh and smile. I’ve created value for you and value for my shareholders,” Mr. Ouimet said. “And whether it be Cedar Point, Knott’s, Kings Island, or Kings Dominion, that’s really our mission.”
Mr. Ouimet is convinced laughs and smiles go best with friends and family. And while Cedar Fair parks have been good at providing thrills, a friend and family connection may have been somewhat overlooked.
In response, it will launch a new marketing campaign, “Thrills Connect,” to show people that they can go to a Cedar Fair park, never get on a coaster, but still have a great day with family.
“We want to remind people that time with family, time with friends is precious. This is the place to spend it,” Mr. Ouimet said.
Over time, Mr. Ouimet said he plans to build more rides that families, from a young child to a grandmother, can enjoy together.
“I think that we’re known for thrill rides. I think we will always be known for thrill rides. But there clearly is an opportunity to expand the offering for children,” Mr. Ouimet said. “So you’ll see us over time try to make sure we’re adding enough for the young families. Because if I can get you to come at that age …you start your relationship with us earlier, you stay with us longer. I’m absolutely convinced of it.”
Several Cedar Fair’s parks have room to add family rides, but Cedar Point, built on a peninsula, has always been land-challenged. But Mr. Ouimet said the problem isn’t huge. There are underutilized areas, and employee dormitories on the grounds could be relocated off the peninsula, he said.
Mr. Ouimet said the most under-used attraction at Cedar Point is its beach — which was the focus of the park when it was founded in 1906.
“You can come here and not even know we have a beach. So one of the things we’re going to encourage people to do is make more use of the beach, because it’s nice,” said Mr. Ouimet, adding that he plans to add cabanas, tents, chairs, and other recreational services this summer to lure more visitors to the Cedar Point beach.
Mr. Ouimet could have started his tenure as CEO slowly, but he seemed determined to hit the ground running when his hiring was announced last June. The company, which had record revenues of $1.028 billion, profits of $72.2 million, and a record attendance of 23.4 million in 2011, had already announced last year a new $1 million attraction, Dinosaurs Alive!, for 2012 at its flagship Cedar Point park. The attraction, which made its debut last year at Kings Island near Cincinnati, is being duplicated at three other parks.
But Mr. Ouimet wanted customers to have more.
He ordered the creation of Luminosity, a mix of lights, lasers, fireworks, music, and dancing that reportedly will cost $6 million and, he hopes, entice people to stay longer in the park. If the show performs as expected, it will be duplicated next year at other parks.
He also asked for and got two new Peanuts characters — Woodstock and Franklin — to delight children at the park’s Camp Snoopy area, and he will have a Snoopy show to fill the Luminosity stage in the daytime.
The former Disney executive also turned his focus on three other items he hopes will make a difference: food, marketing, and ecommerce.
Cedar Point used to be known for its delicious french fries, but the recipe was labor-intensive. So several years ago it abandoned its popular recipe in favor of quicker service.
“[Operations vice president] Phil Bender, who runs about half of our parks for us, is now bringing back the original recipe at all the parks. …It will take us longer, but they should taste really, really good,” Mr. Ouimet said.
“The food in the parks, to some degree, has been an afterthought. So this year we’re going to have in our major burger places all fresh burgers, never frozen,” he said. “So with those, the french fries, and we’ve got some other little surprises that we’re going to do for the food, we’re trying to make that part of it a little better.”
Marketing, in Mr. Ouimet’s view, wasn’t a Cedar Fair strength. So he created a chief marketing officer position and filled it with Kelly Semmelroth, a former Disney colleague.
“I needed someone like Kelly, who can take what I would call modern marketing techniques. She is very much into CRM — customer relationship marketing — which is, ‘How much do I understand my consumers?’ ‘How do I capture their information?’ ‘How do I communicate with them in the digital era?’ ”
If the individual parks gathered that information it would have produced 11 databases, Mr. Ouimet said. But Ms. Semmelroth can centralize data to find economies of scale, yet still allow each park the independence to do what is needed for their markets, he added.
An area where Mr. Ouimet already has made progress is ecommerce. Previously, each park had its own Web site and methods of ticket sales. But late last year the new CEO standardized the Web sites so they can offer discounts on tickets and other premium services.
“From a system technology standpoint, the rides were as technologically advanced as anything you’ll see in the industry. From a back of the house standpoint, we were probably behind the curve,” Mr. Ouimet said of Cedar Fair’s previous technological efforts.
The growth of smart phones and other devices has necessitated new ways to reach customers, he said.
“The way I see it today is, before you grab your car keys to go on a road trip to Cedar Point, you grab your keyboard to see what you’re going to do and what tickets you’re going to buy,” he said. “So clearly, today when somebody sees our commercial on television, I guarantee you the vast majority are going to the Web site, and I needed that Web site to be able to be of value to the consumer.”
In return, Cedar Fair can communicate with its guests in ways it couldn’t before, the CEO added.
“I can now talk to every kid instantly, and I think that’s how you balance out the technology side. I guarantee you we’ll come up with things we haven’t even thought of yet using technology for people to enjoy the parks better, to stay in touch with each other.”
Cedar Fair LP said Thursday it expects a record dividend in 2013 and foresees higher revenues because of new initiatives that include a fresh ad campaign, more e-commerce via updated Web sites, a nighttime light show at Cedar Point to get customers to stay longer, and “fast lane” programs at all 11 parks that let customers pay extra to bypass long lines on popular rides.
“We believe there are substantial growth opportunities available to us,” Matt Ouimet, Cedar Fair’s new chief executive officer, told Wall Street analysts in New York during his first investor presentation since replacing the company’s longtime leader, Dick Kinzel, this month.
During the two-hour presentation, Mr. Ouimet, 53, a former executive with the Disney Co. who was chosen in June to replace Mr. Kinzel, outlined his vision for the Sandusky-based amusement park company, a plan he called “New Fun” — a word play on the company’s FUN ticker symbol on the New York Stock Exchange.
Financially, Mr. Ouimet said Cedar Fair’s primary goal is attractive returns for its shareholders. He said the company will continue its $1.60-a-share dividend this year, but expects a record dividend “of more than $2” a share in 2013. On Thursday, Cedar Fair’s stock closed up 60 cents a share at $24.53.
With a debt load still at $1.56 billion and 2011 revenues expected to be at $1.03 billion when the company reports its earnings Feb. 21, Cedar Fair said it expects modest sales growth in 2012. But the company ended 2011 with $35 million in free cash flow and it expects to increase its free cash flow by $50 million beginning in 2013 because of interest reduction on its outstanding debt, Brian Witherow, the company’s chief financial officer, said. By 2016, Cedar Fair expects to show a compounded annual growth rate of 4 percent, with its adjusted earnings before interest, taxes, depreciation, and amortization, or ebitda, reaching $450 million.
Mr. Witherow said 2011 adjusted ebitda earnings are expected to be $375 million.
Mr. Ouimet said Cedar Fair’s expected higher dividends will hinge on earnings growth. The company expects to achieve growth through a number of moves, some already implemented and others announced Thursday by the CEO.
In November, Cedar Fair hired a new ad agency, Cramer-Krasselt of Chicago, to handle its strategic planning, branding, advertising, media buying, and other duties for its 10 U.S. amusement parks. Mr. Ouimet said the agency created a new ad campaign based on multigenerational memories of the company’s parks with the goal of getting customers to come to the parks as a family.
Cedar Fair also is updating its parks’ Web sites to accommodate more e-commerce and drive customers, Mr. Ouimet said. On Wednesday, Cedar Point debuted its new Web site and unveiled a two-price ticket strategy — a one-day adult ticket for $44.99 if bought online, and $51.99 if bought at the gate.
“We want to train the consumer to know the best ticket value is on our Web site,” the CEO said.
Another change recently implemented is allowing Cedar Point and other parks to offer season passes paid for on an installment plan of four equal payments.
Mr. Ouimet said the installment plan could be “one of the most impactful changes the industry could make” and eventually embed visits to a Cedar Fair park into a customer’s routine by giving them time to budget for it, essentially paying a portion each month like a cable TV bill.
“For us, such a model would improve cash flow, reduce annual insurance, reduce our marketing costs for seasonal passes, particularly where we spend a good chunk of our marketing money, and most probably increase the seasonal pass holders’ spending when they do visit,” he said.
The CEO said he is implementing several small changes at the company’s parks, including never-frozen fresh hamburgers at all its hamburger stands, and early entry programs for guests staying at Cedar Fair resorts or its resort partners.
In the future, Cedar Fair will continue testing new ideas at one park and, if successful, deploying them at its other parks the next year.
Based on a test last season, the company will implement “Fast Lane” — a program tested in July and August at Kings Island park near Cincinnati — at all of its amusement parks this season.
Fast Lane charges customers $50 over the admission price for the privilege of jumping to the front of the line for every popular ride. Each park will limit the number of Fast Lane passes sold each day so as not to disrupt customers who do not buy Fast Lane.
Mr. Ouimet said that for the half-season Fast Lane was used at Kings Island, it generated close to $1 million in revenue.
This season Cedar Fair will test a new light show, “Luminosity — Ignite the Night,” at Cedar Point. If successful, the combination of lights, fireworks, and music will be duplicated at all Cedar Fair parks.
Cedar Point spokesman Robin Innes said the park is finalizing details of Luminosity, but it will be held at a fixed spot on the Cedar Point midway nightly beginning in June. The idea had been under consideration for a while, he added.
Mr. Ouimet said that from his 17 years working at Disney, he learned that there are just two things that keep people at a park through dinner — lights and fireworks.
“You are trying to keep them through the dinner or keep them late enough. They stay in a resort and come the next day. … We’ve tried everything throughout the industry forever and the only thing is lights and fireworks, and the reason that works is because you can’t do it ’til after dark. It’s just structural,” he said.