Q1 2024 Six Flags Entertainment Corp Earnings Call
Speaker Change: [music].
Operator: Good morning, ladies and gentlemen. Welcome to the Six Flags First Quarter 2024 Earnings Conference Call. My name is Betsy, and I will be your operator for today's call. During the presentation, all lines will be in a listen-only mode.
Good morning, ladies and gentlemen, welcome to the six flags first quarter 2024 earnings conference call.
My name is Betsy and I will be your operator for today's call.
During the presentation all lines will be in a listen only mode.
After the Speakers' remarks, we will conduct a question and answer session.
If you have a question at that time simply press Star then the number one on your telephone keypad.
Betsy: If you would like to withdraw your question. Please press Star then two.
Operator: After the speaker's remarks, we will conduct a question and answer session. If you have a question at that time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then 2. Thank you. I will now turn the call over to Evan Bertrand, Vice President, Investor Relations, and Treasurer. Please go ahead.
Speaker Change: Thank you.
Speaker Change: I will now turn the call over to Evan Bertrand Vice President Investor Relations and Treasurer. Please go ahead.
Evan Bertrand: Good morning, and welcome to our first quarter 2024 earnings call. With me is Selim Bassoul, President and CEO of Six Flags, and Gary Mick, our Chief Financial Officer.
Evan Bertrand: Good morning, and welcome to our first quarter 'twenty 'twenty four earnings call.
Evan Bertrand: With me, it's Celine Mitchell, President and CEO of six flags and Gary <unk>, Our Chief Financial Officer.
Evan Bertrand: We'll begin the call with prepared comments and then open the call to your question. Our comments will include forward-looking statements within the meaning of the federal securities law. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements, and the company undertakes no obligation to update or revise these statements, in addition.
Evan Bertrand: We will begin the call with prepared comments and then open the call to your questions.
Evan Bertrand: So include forward looking statements within the meaning of the federal Securities laws.
Evan Bertrand: These statements are subject to risks and uncertainties.
Evan Bertrand: That could cause actual results to differ materially from those described in such statements.
Evan Bertrand: And the company undertakes no obligation.
Evan Bertrand: To update or revise these statements.
Evan Bertrand: In addition.
Evan Bertrand: On the call, we will discuss non-GAAP financial measures. Investors can find both a detailed discussion of business risks and reconciliations of Non-GAAP Financial Measures to GAAP Financial Measures and the company's annual report, quarterly reports, and other forms filed or furnished with the SEC. While our call today will focus on the results of the first quarter of 2024, I do want to provide a few updates on the merger process first. We received overwhelming shareholder approval of the merger on March 12th, helping us achieve a key milestone in the process.
Evan Bertrand: On the call, we will discuss non-GAAP financial measures invest.
Evan Bertrand: Investors can find both the detailed discussion of business risks and reconciliations.
Evan Bertrand: non-GAAP financial measures to GAAP financial measures in the company's annual report.
Evan Bertrand: He reports and other forms filed or furnished with the SEC.
Evan Bertrand: While our call today will focus on the results of first quarter 'twenty 'twenty four I.
Evan Bertrand: I do want to provide a few updates on the merger process.
Evan Bertrand: We received overwhelming shareholder approval of the merger on March 12.
Evan Bertrand: Helping us achieve a key milestone in the process.
Evan Bertrand: Second, we have certified compliance with the DOJ's request for additional information and documentary material and the lab. We completed certain credit refinancing in preparation for the merger. We expect the merger to close in the first half of 2024. With that said, we will not be taking any questions on the merger on this call. Now, I will turn this call over to Selim.
Evan Bertrand: Second.
Evan Bertrand: We have certified compliance with the Doj's request for additional information and documentary material and.
Evan Bertrand: Last week.
Evan Bertrand: We completed certain credit refinancing in preparation for the merger.
Evan Bertrand: We expect the merger to close in the first half of 'twenty 'twenty four.
Speaker Change: With that said, we will not be taking any questions on the merger on this call.
Speaker Change: Now I will turn this call over to sling.
Sling: Good morning.
Selim A. Bassoul: Thank you for joining our call. We are nearly three years into our transformation, and we are excited to see our results trending upward. Early indications for the season show a positive trajectory for this season and that people are spending more money in our parks. We have carved a clear path for profitable growth and attribute this progress to two key aspects of our strategy. The first is premiumization.
Sling: Thank you for joining our call.
Sling: Who are nearly three years into our transformation and we are excited to see our results trending upwards.
Sling: Early indications for the season show positive trajectory for this season and that people are spending more money in our parks.
We have got a clear path for profitable growth.
Sling: Attribute this progress to two key aspects of our strategy. The first is premium musician.
Selim A. Bassoul: We are transforming our power. We are creating multi-generational appeal, proving that thrills know no age.
Sling: We are transforming our parks.
Sling: We are creating multi.
Sling: Multi generational appeal proving that thrills no no H.
Sling: Thrills no no age.
Selim A. Bassoul: We alleviate shock points and amplify value in every aspect of the past experience. We are also alleviating burdens on our rights and on our employees, which in turn frees up space to better serve our guests, making us easier to do business with. We are enhancing park infrastructure, in-park offerings, luxury accommodations, comfort seating, and beautifying our parks, which is resonating with our guests, giving them a reason to stay longer and spend
Sling: We I lived here Chokepoints and amplified value in every aspect of the park experience.
Sling: We are also elevating burden on our rights and our employees, which in turn freed up space to better serve our guests, making making us easier to do business with.
Sling: We are enhancing bought infrastructure in.
Sling: Can pump offerings luxury accommodations comfort seating and beautifying off box, which is resonating with our guests, giving them a reason to stay longer and spend more.
Selim A. Bassoul: The second key aspect is that we are reinventing the customer journey from before guests enter the park to after they leave. Through our digital transformation, we have introduced new ways to personalize the guest experience and increase engagement. I will discuss this in more detail later in the call.
Sling: The second key aspect is that we are reinventing the customer journey.
Sling: From before they enter the park to after they leave.
Sling: Through our digital transformation, we have introduced new ways to personalize the guest experience and to increase engagement.
Speaker Change: We'll discuss this in more detail later in the call.
Selim A. Bassoul: Today, I will highlight several leading indicators that give us confidence that we are on the right path for profitable growth. Our past sales remain strong through April. 2024 total pass sales are ahead of last year by double digits, with both units and average pass price showing solid increases over last year. Add-on sales of all-season dining and all-season flash passes are also ahead of last year, and we are selling a higher mix of diamond and platinum passes. Second,
Speaker Change: Today, I will highlight several leading indicators that give us confidence that we are on the right path for profitable growth.
Speaker Change: First.
Speaker Change: Pass sales remained strong.
Speaker Change: Through April.
Speaker Change: 'twenty 'twenty four total pass sales.
Speaker Change: Of last year by double digits, we suppose units and average spot price showing solid increases over last year.
Speaker Change: Add on sales of all season dining and all season Flash passes are also.
Speaker Change: As of last year, and we are selling a higher mix of diamond and platinum passes.
Speaker Change: Second.
Selim A. Bassoul: Group sales are outperforming expectations. Our move last year to place our sales team back in the park has empowered our team, enabling them to work closely with park leadership and to better engage with customers. Based on our current bookings, we are surpassing last year's group sales by over 20% and approaching pre-pandemic levels for the full year. In part, spending continues to grow.
Speaker Change: Group sales are outperforming expectations.
Speaker Change: Our move last year took place all sales teams back into park has empowered our team.
Speaker Change: Enabling them to work closely with spark leadership.
Speaker Change: And to better engage with customers.
Speaker Change: Based on our current bookings, we are surpassing last year's group sales by over 20% and approaching pre pandemic levels for the full year.
Speaker Change: Sure.
Speaker Change: In park spending continues to grow.
Selim A. Bassoul: We are seeing underlying in-park spending per capita increasing 5%, excluding the headwinds from our discontinued legacy membership. This growth helped us achieve record first quarter in-park revenues and reflects our focus on driving monetization through technology, as well as on elevating the experience, which promotes multi-generational family visitation in our parks and encourages guests to stay longer on technology, for example. Our new speedy parking automated toll plazas are quickly gaining popularity and generating additional revenues, with roughly half of our guests now using this service. Another example is our new self-service kiosks at our restaurants, which are reducing food wait times and increasing average check sizes. It is all about convenience. I repeat, it is all about convenience.
Speaker Change: I've seen and the lying in park spending per capita increasing 5%.
Speaker Change: Excluding the headwinds from our discontinued legacy memberships.
Speaker Change: This growth helped us achieve record first quarter in park revenues and reflects our focus on driving monetization through technology as well as on elevating the experience, which promotes multi generational family visitation in our box and Cuda just.
Speaker Change: To stay longer.
Speaker Change: On technology for example.
Our new speedy parking automated toll plazas co.
Speaker Change: Quickly gaining popularity.
Speaker Change: And generating additional revenues with roughly half of our guests now using this service.
Speaker Change: Another example is our new self service self service kiosks at all restaurants, which are reducing food waste times and increasing average check sizes.
Speaker Change: It is all about convenience.
Speaker Change: Pete It is all about convenience.
Selim A. Bassoul: We elevate the experience by striving to engage our guests at a deeper emotional level, whether it is riding one of our record-breaking thrill rides, the nostalgia of eating a funnel cake, or smelling freshly made cotton candy, watching your child ride his or her first roller coaster, or providing an opportunity for a group of old friends to reconnect. We validate every day that a memorable experience outshines a crowded experience.
Speaker Change: We elevate the experience by striving to engage our guests at a deeper emotional level.
What is it it is rising one of our record breaking thrill rides.
Speaker Change: General styled shelf eating a funnel cake or smelling freshly made cotton candy.
Speaker Change: Watching her child drive his or her first roller coaster or providing an opportunity for a group of old friends to reconnect we validate everyday.
Speaker Change: That's a memorable experience.
Shines it crowded experience.
Speaker Change: And memorable experience outshines the crowded experience every day.
Selim A. Bassoul: I have personally observed the desire for guests to enjoy the Six Flags experience. On a recent Saturday, I was at Six Flags over Texas. There were 11,000 guests in the park that day. Around 7 p.m., they were still over 75% of the guests at the party, and I saw many of them sharing a meal, treating themselves to dessert, and shopping for their favorite apparel at our retail location. You could see the excitement in their faces, and they did not want to leave. As we work to encourage guests to stay longer, enhance our in-park offerings, and cultivate memorable experiences, this will drive continued progress in growing guest spending in our park. Before I hand it over to Gary,
Speaker Change: I have personally observed the desire for guests to enjoy the six flags experience.
Speaker Change: On a recent Saturday I wasn't at six flags over Texas they.
Speaker Change: They were 11000 guests in the parks that day.
Speaker Change: Around seven P. M. They were still over 75% of the guests at the park and so many of them shedding EMEA.
Three things themselves to desserts.
And shopping for their favorite apparel at our retail locations.
Speaker Change: You could see the excitement in their faces and they did not want to leave.
Speaker Change: As you work to encourage guests to stay longer.
Speaker Change: Hence our in park offerings and cultivate memorable experiences. This will drive continued progress in growing guest spending in our parks.
Speaker Change: Before I hand, it over to Gary.
Selim A. Bassoul: I want to reiterate how transformative the past few years have been for us. We have streamlined our organization. Removing unnecessary layers, creating a more nimble and agile team. We have decentralized certain key functions to put ownership back in the park, empowering local teams, which has been central to better serving customers and reinvigorating our group sales, and our culture of urgency. Excellence and ownership have been central to navigating numerous challenges, adapting quickly, and setting a strong foundation for the future.
Gary: I want to read to reiterate how transformative the past few years have been put off.
Gary: We have streamlined our organization removing any necessity layers.
Gary: Creating a more nimble and agile team.
Gary: We have decentralized certain key functions to put ownership back in the park.
Gary: Our local teams, which has been central to better serving customers and reinvigorate reinvigorating our group sales.
Gary: Our culture of urgency.
Gary: Excellence in ownership has been central to navigating numerous challenges.
Gary: Adapting quickly and setting a strong foundation for the future.
Selim A. Bassoul: We remain dedicated to creating a premium guest experience, as well as staying vigilant in managing our costs, so that we can deliver profitable and sustainable growth. With that, I would like to turn the call over to Gary to discuss the financial results for the quarter.
Gary: We remain dedicated to creating a premium guest experience as well as staying village vigilant in managing our costs. So that we can deliver profitable and sustainable growth.
Gary: With that I would like to turn the call over to Gary to discuss the financial results for the quarter.
Gary Mick: Thank you, Selim, and good morning, everyone. I will start with attendance, revenue, and per capita and move to expenses and adjusted EBITDA for the quarter. I will then discuss our active path base metrics, select balance sheet items, and capital allocation. Total attendance was 1.7 million guests, a 6% increase from the prior year, driven primarily by the early Easter holiday, which occurred in the first quarter of 2024 compared to the second quarter of 2020.
Gary: Thank you Celine and good morning, everyone.
Gary: I will start with attendance.
Gary: Revenue and per caps and move to expenses and adjusted EBITDA for the quarter.
Gary: I will then discuss our active pass base metrics select balance sheet items and capital allocation.
Gary: Yeah.
Gary Mick: We estimate that the Easter timing shift provided a benefit of 90,000 guests in the first quarter of 2024 and will result in a year-over-year headwind in the second quarter. Unfortunately, the weather was just as challenging in the first quarter of 2024 as it was in the prior year, and the number of operating days was essentially flat year over year.
Gary: Total attendance was $1 7 million guests, a 6% increase from the prior year driven primarily by the early Easter holiday, which occurred in the first quarter of 2024 compared to the second quarter of 2023.
Gary: We estimate that the Easter timing shift provided a benefit of 90000 guests in the first quarter of 2024.
Gary: And will result in a year over year headwind in the second quarter.
Gary: Unfortunately, the weather it was just as challenging in the first quarter of 2024 as it was in the prior year and the number of operating days were essentially flat year over year.
Gary Mick: Revenue was $133 million, a decrease of $9 million or 6% versus last year. The change was driven primarily by two factors. The first was a reduction in international licensing revenue caused by a change in the estimated opening date of Six Flags Cadilla to mid-2025, which shifted $4 million of revenue previously recognized to future periods. The second was a $12 million reduction in revenue from memberships beyond the initial 12-month commitment period, what we call 13 plus, which is recognized evenly each month and is not associated with attendance, and includes revenue allocated to admissions and in-park revenue.
Gary: Revenue was $133 million, a decrease of $9 million or 6% versus last year.
Gary: The change was driven primarily by two factors. The first was a reduction in international licensing revenue caused by a change in the estimated opening date of six flags could deal.
Gary: Two mid 2025, which shifted $4 million of revenue previously recognized to future periods.
Gary: The second was a $12 million reduction in revenue from memberships beyond the initial 12 month commitment period what.
Gary: What we call 13, plus which is recognized evenly each month and is not associated with the tenants.
Gary: And includes revenue allocated to admissions and in park revenues.
Gary Mick: Admissions revenue was $71 million, a decrease of $6 million or 7% versus last year; in-park revenues were a first quarter record at $54 million, an increase of $3% versus last year, with our in-park initiatives more than offsetting lower 13-plus membership revenue. Total guest spending per capita decreased $6.53 or 8%, admissions spending per capita decreased $5.77 or 12%, and in-park spending per capita decreased 76 Excluding the impact of 13-plus revenue from both periods, which we believe better reflects our higher average pricing and in-park monetization efforts, guest spending per capita would be higher than the prior year by $1.59 or 3%, which includes a slight increase in emissions spending per capita of $0.31 or 1% and an increase in in-park spending per capita of $1.28 or 5%.
Gary: Admissions revenue was $71 million, a decrease of $6 million or 7% versus last year in park revenues were a first quarter record at $54 million, an increase of four 3% versus last year with our in park initiatives more than offsetting lower 13, plus membership revenue.
Gary: Total guest spending per capita decreased $6 and 53 or 8%.
Gary: Admissions spending per capita decreased $5 and 77 or 12%.
Gary: And in Park spending per capita decreased 76 cents.
2%.
Gary: Excluding the impact of 13 bus revenue from both periods, which we believe better reflects our higher average pricing in in park monetization efforts guest spending per capita would be higher than prior year by $1 59, or 3%, which includes a slight increase in emission spending per capita of 31 cents or 1%.
Gary: And an increase in in park spending per capita $1.28 or 5%.
Gary Mick: We expect revenue headwinds from 13-plus members to continue into the second quarter with an anticipated reduction in 13-plus revenue of approximately $10 million compared to the second quarter last year. As Selim mentioned, our strong past sales are an encouraging leading indicator that gives us confidence we can grow attendance again in 2024. We also expect to grow our per-capita revenue for each category of guests and across our in-park revenue channel. However, this growth will be tempered by the following factors.
Gary: We expect revenue headwinds from 13, plus members to continue into the second quarter with an anticipated reduction in 13, plus revenue of approximately $10 million compared to the second quarter last year.
Gary: As Tony mentioned, our strong pass sales are an encouraging leading indicators that gives us confidence we can grow attendance again in 2024.
Gary: We also expect to grow our per caps for each category of guest and across our in park revenue channels.
Gary: However, this growth growth will be tempered by the following factors.
Gary Mick: First, 13 plus revenue headwinds that we have previously discussed; Second, a higher mix of season pass attendance, which carries a lower per cap versus a single-day ticket; Third, a higher mix of group attendance, which typically comes at a lower per cap versus our company average. Based on early trends, coupled with these tempering facts, we expect our total guest spending per capita in 2024 to be up slightly versus the prior year.
Gary: <unk> 13, plus revenue headwinds that we have previously mentioned.
Gary: Second a higher mix of season pass attendance, which carries a lower per cap versus the single day visit.
Gary: Third higher mix of group attendance, which typically comes at a lower per cap versus our company average.
Gary: Just on early trends coupled with these temporary factors.
Gary: We expect our total guest spending per capita in 2024 to be up slightly versus prior year.
Speaker Change: Moving on to costs.
Gary Mick: In the first quarter of 2024, we incurred $5 million of merger-related expenses associated with the proposed merger with Cedar. Cash operating costs, which include cash operating and SG&A expense but excludes merger-related costs, decreased $1 million or 1% in the first quarter versus the prior year. Looking ahead.
Speaker Change: In first quarter 'twenty 'twenty, four we incurred $5 million of merger related expenses associated with the proposed merger with Cedar Fair.
Speaker Change: Cash operating costs, which includes cash operating and SG&A expense, but excludes merger related costs decreased $1 million or 1% in the first quarter versus the prior year.
Speaker Change: Looking ahead.
Gary Mick: There are several factors driving our cost expectations for the remainder of. First, we are optimizing our events calendar, focusing on our guests' favorite events to deliver the biggest impact, which will result in lower event spending in the second half of 2024 compared to the second half of 2020. Second, we expect advertising spend to be flat for the full year 2024 versus the prior year. That said, we plan to spend more on advertising in the second quarter to build on our early success and to better align with the timing of our past promotions moving into. This will make for tougher quarterly comparisons for the second quarter versus last. Finally, we expect full-year average cost inflation to be around 4%. Keep in mind that many of the parks in jurisdictions with the largest minimum wage increases were either closed or did not have significant operations in the first quarter but will be wrapping up operations.
Speaker Change: There are several factors driving our cost expectations for the remainder of the year.
Speaker Change: First we are optimizing our events calendar focusing on our guests' favorite events to deliver the biggest impact which will result in lower event spending in the second half of 'twenty 'twenty four.
Speaker Change: Compared to the second half of 2023.
Speaker Change: Second we expect advertising spend to be flat for the full year 2024 versus prior year that said, we plan to spend more on advertising in the second quarter to build on our early success.
Speaker Change: And to better align with the timing of our past promotions moving into the peak season.
Speaker Change: This will make for tougher quarterly comparisons for the second quarter versus last year.
Speaker Change: Finally, we expect full year average cost inflation to be around 4% keep in mind. Many of the parks in jurisdictions with the largest minimum wage increases were either closed or did not have significant operations in the first quarter, but will be ramping up operations in the second.
Gary Mick: Adjusted EBITDA loss for the quarter was $26 million versus a $17 million adjusted EBITDA loss in the prior year first quarter, driven primarily by the shift in international licensing revenue to 2025 and Lower Membership 13 Plus revenue, partially offset by higher attendance and higher underlying per capita growth, particularly on in-park revenue. Our active pass base as of March 31st, 2024, comprised 2.9 million pass holders. 10% decrease versus the prior year first quarter.
Speaker Change: Adjusted EBITDA loss for the quarter was $26 million versus a $17 million adjusted EBITDA loss in the prior year first quarter.
Speaker Change: Driven primarily by the shift in international licensing revenue to 2025, and lower membership 13, plus revenue, partially offset by higher attendance and higher underlying per capita growth, particularly in park revenues.
Speaker Change: Our active pass base as of March 31, 'twenty 'twenty four comprised $2 9 million pass holders.
Speaker Change: 10% decrease versus the prior year first quarter.
Gary Mick: As you will recall, our active past base at the end of fourth quarter 2023 was flat with the prior year; the sequential drop in the prior year comparison from fourth quarter to first quarter is due to the inclusion of our discontinued annual past product in the prior year's active past. These annual passes were sold in 2022, but not in 2023, were valid for 12 months, and did not expire in January like traditional pasts. Excluding these annual passes, which we feel better reflects our past sales, our active pass base at the end of the first quarter would have been higher than the prior year's first quarter by high single digits.
Speaker Change: As you will recall, our active pass base at the end of fourth quarter 2023 was flat with the prior year.
Speaker Change: The sequential drop in the prior year comparison from fourth quarter to first quarter is due to the inclusion of our discontinued annual pass product in the prior year's active pass base.
Speaker Change: These annual passes which were sold in 2022.
Speaker Change: Not in 2023 were valid for 12 months and did not expire in January like traditional passes.
Speaker Change: Excluding these annual passes which we feel better reflects our pass sales our active pass base at the end of first quarter would have been higher than the prior year first quarter by high single digits.
Gary Mick: Deferred revenue as of March 31, 2024 was $165 million, an increase of $13 million or 9% versus the prior year. Apex spend was $37 million in the first quarter, an increase of $12 million compared to the first quarter of 2023, as we continue our work on enhancing guest-facing technology and rolling out new rides.
Speaker Change: Deferred revenue as of March 31, 2024, it was $165 million, an increase of $13 million or 9% versus the prior year.
Speaker Change: Capex spend was $37 million in the first quarter, an increase of 12 million compared to <unk>.
Speaker Change: First quarter 2023, as we continue our work on enhancing guest facing technology and rolling out new rides and attractions.
Gary Mick: Total liquidity as of March 31st was $310 million, which includes $249 million of available revolver capacity, net of $21 million dollars letters of credit plus $61 million dollars. On May 2, we raised $850 million of 6 5 8% senior secured notes due 2030. In anticipation of closing the merger, we have fully repaid the term loan and the outstanding revolver balance. Additionally, we will pay down $165 million of our 2025 secured notes in July when the call premium steps down to par, leaving $200 million outstanding on our 7% notes due July, This refinancing is part of a series of financing transactions that were completed in anticipation of the merger closing, including the refinancing this month of Cedar Fair's $1 billion term loan B and $300 million revolving credit facility, which is expected to be upsized to $850 million upon the closing of the merger, and that will be assumed by their combined.
Speaker Change: Total liquidity as at March 31 was $310 million, which includes $249 million of available revolver capacity.
Speaker Change: Net of $21 million letters of credit plus $61 million of cash.
Speaker Change: On may 2nd we raised $850 million of six and five eighths percent senior secured notes due 2032.
Speaker Change: In anticipation of closing the merger, we have fully repaid the term loan and the outstanding revolver balance.
Speaker Change: Additionally, we will pay down $165 million of our 2025 secured notes in July when the call premium steps down to par, leaving $200 million outstanding on our 7% notes due July 2025.
Speaker Change: This refinancing was part of a series of financing transactions that were completed in anticipation of the merger closing.
Speaker Change: Including the refinancing this month of Cedar Fair is $1 billion term loan b and $300 million revolving credit facility, which is expected to be upsized to $850 million. Upon the closing of the merger and that will be assumed by the combined company.
Gary Mick: These steps help put Six Flags and the combined company in a position with sufficient cash flows and revolver capacity to address the near-term debt maturities and the anticipated fees and obligations associated with closing the mergers. We intend to use excess cash flows to pay down debt until we reach our target leverage ratio of three times net debt to adjusted EBITDA. With that, I will turn it over to Selim.
Speaker Change: These steps help with six flags and the combined company in a position with sufficient cash flows and revolver capacity to address the near term debt maturities and the anticipated fees and obligations associated with closing the merger.
Speaker Change: We intend to use excess cash flows to pay down debt until we reach our target leverage ratio of three times net debt to adjusted EBITDA.
Speaker Change: With that I will turn it over to Sally.
Sally: Thank you Gary.
Selim A. Bassoul: It is exciting to see the premiumization strategy taking hold in our results as evidenced by our positive leading indicators, including our strong season past sales, improving group sales, and consistent growth in our in-part sales channel. As we move into the next phase of our structure,
Sally: It is exciting to see the pre musician strategy is taking hold on our results as evidenced by our positive leading indicators, including our strong season pass sales.
Sally: Improving group sales.
Sally: And consistent growth in our in park sales channels.
Sally: As we move into the next phase of our strategy.
Selim A. Bassoul: We are focused on transforming guest engagement from before they enter the park to after they leave. Through our digital initiatives, we are reinventing the customer journey, and we are excited to update you on new developments that will propel us in this endeavor. Starting with the pre-visit experience.
Sally: We are focused on transforming guest engagement from before they enter the park to after they leave.
Sally: Through our digital initiatives, we are reinventing the customer journey.
Speaker Change: And we are excited to update you on new developments that will propel us in this endeavor.
Speaker Change: Starting with the pre visit experience.
Selim A. Bassoul: First, we are launching a brand new website with stunning visual displays, and it will incorporate an intuitive design and mobile-friendly navigation to help drive website conversions and repeat visits to our site. The site will utilize our new Gen AI chat feature, which will be able to answer most of our guests' questions instantaneously, reducing the need for a live agent. Our new Gen AI concierge, named Missy Six, will be launched on our app and website. This feature will help guests plan their entire day, tailored specifically to their ride and food preferences. Both of these developments are expected sometime in the second quarter.
Speaker Change: First we are launching a brand new website with stunning visual displays and it will incorporate an intuitive design and mobile friendly navigation to help drive website conversions and repeat visits to our site.
Speaker Change: The site will utilize our new Gen AI chat feature which will be able to answer most of our guests question instantaneously, reducing the need for life agent.
Speaker Change: Second.
Speaker Change: Our new Gen eight I concepts name Missy six.
Speaker Change: It will be launched on our App and website.
Speaker Change: This feature will help guests plan the entire day.
Speaker Change: Tailored specifically to that right and food preference.
Speaker Change: Both of these developments are expected sometime in the second quarter.
Selim A. Bassoul: Now let's move on to the experience in the park, who are expanding our self-serve kiosk to many of our retail locations later this season. Based on the popularity and success we see at our F&B locations, this will help streamline operations and increase average ticket sizes in our retail facility, helping cats buy their favorite Parks merchandise without needing to wait in line.
Speaker Change: Now, let's move on to the experience in the park.
While expanding our self serve kiosks to many of our retail locations later this season.
Speaker Change: Based on the popularity and success with our F&B locations. This will help streamline operations and increase average ticket sizes in our retail facilities, helping guests buy their favorite Pax merchandise without needing to wait in line.
Selim A. Bassoul: Next, live ride wait times will be rolled out to multiple parks this season, providing guests with more accurate wait times, helping guests to maximize every minute in the park. Finally, our new digital wallet is set to be rolled out later in the second quarter. This development will simplify the payment process for gas, consolidating all payment activity for the entire family, and can be integrated with your credit card, cell phone, or smart watch.
Speaker Change: Next live ride wait times will be rolled out to multiple parks. This season.
Speaker Change: Providing guests with more accurate wait times, helping guests to maximize every minute in the park.
Speaker Change: Finally.
Speaker Change: Our new digital wallets is set to be rolled out later in the second quarter.
This development will simplify the payment process for guests.
Speaker Change: Solid dating all payment activity for the entire family and can be integrated with your credit card cellphone or smart watch.
Selim A. Bassoul: This will give parents more control to monitor payment activity and will provide us with valuable customer insight to help personalize our promotions and enhance guest experience. All three. We are also driving guest engagement after they leave the park to keep them wanting to come back for more. Six Flags is tapping into the metaverse, launching a virtual interactive gaming platform later in the second quarter. Guests will be able to play online games to earn virtual coins that can be redeemed for real-world benefits at the park.
Speaker Change: This will give parents more comfortable to monitor payment activity and will provide us with valuable customer insights to help personalize our promotions and then the gas enhance guest.
Speaker Change: Rich.
Speaker Change: We are also driving guest engagement after they leave the path to keep them wanting to come back for more.
Speaker Change: The class is tapping into some messed up horse launching a virtual interactive gaming platform later in the second quarter guest.
Speaker Change: Guests will be able to play online games to earn virtual coins that can be redeemed for real world benefits at the park.
Selim A. Bassoul: Plus, we are developing a new digital loyalty program that we plan to unveil later this year. This will help us to encourage repeat visits, promote in-park offerings, and improve overall guest engagement and also reward our most loyal guests. We'll provide more detail on this program at a later date. Meanwhile, our digital innovations have shown early success in helping to drive monetization. We feel there is plenty of headroom to expand on this front and unlock even bigger returns in the future.
Speaker Change: Plus we are developing a new digital loyalty program.
Speaker Change: We plan to unveil later this year.
Speaker Change: This will help us to encourage repeat visits provoked in park offerings and improve overall guest engagement and also reward our most loyal guests.
Speaker Change: We will provide more detail on this program at a later date.
Speaker Change: Our digital innovations have shown early success in helping to drive monetization.
Speaker Change: We feel there is plenty of headroom to expand on this phone and unlock even bigger returns in the future.
Speaker Change: No.
Selim A. Bassoul: I want to talk about why I'm so excited about the 2024 season. First, our exciting lineup of new rides and multi-generational attractions is already generating buzz and sure to excite our guests. At Six Flags Open Georgia, we are launching the Georgia Surfer Coaster, a first-of-its-kind surf coaster featuring the ultimate combination of a roller coaster with unique water attraction features reaching a maximum speed of 60 miles per hour and a height of 144 feet.
Speaker Change: Want to talk about why I'm, so excited about the 'twenty 'twenty four season.
Speaker Change: First.
Selim A. Bassoul: At Six Flags St. Louis and Six Flags Great America, we are opening two new 17-story pendulum rides, a proven fan favorite that takes guests over 170 feet into the air at speeds up to 75 miles per hour. Thick Flags, Great Escape will be celebrating its 70th anniversary with the new Bobcat wooden family coasters, which will take guests 55 feet in the air and reach speeds of nearly 40 miles per hour. Tick Flags, Fiesta, Texas will be unveiling our revamped DC Universe area with new themeing and rights, including the Cyborg Cyber Revolution, Shazam Tower of Eternity, and the Metropolis Trended Authority, which will create a truly immersive experience for all members of the family. And last but certainly not least,
Speaker Change: Our exciting lineup of new rides and multi generational attraction is already generating buzz and shorts to excite our guests.
Speaker Change: Our six flags over Georgia, who are launching the Georgia surfer coaster.
Speaker Change: The first of its kind surf close too.
Speaker Change: Featuring the ultimate combination of a rollercoaster was unique water attraction features reaching a maximum speed of 60 miles per hour and the height of 144 feet.
Speaker Change: At six flags St. Louis and six flags Great America, we are opening two new 17 story pendulum rights.
Speaker Change: If proven fan favorite that takes guests over 170 feet into the air at speeds up to 75 miles per hour.
Speaker Change: Six flags, great escape would it be celebrating its 70th.
Speaker Change: Anniversary was the new bulk cap wouldn't family coasters, which will take guess 55 feet in the air and reach speeds of nearly 40 miles per hour.
Speaker Change: Six flags, just that Texas would it be unveiling our revamped DC universe area with new theming and rights, including the sideboard cyber evolution.
Speaker Change: Sure Tower of authority and the Metropolis Transit authority, which will create a truly immersive experience for all members of the family.
Speaker Change: And last but not certain but certainly not least we are celebrating our 15th anniversary of six flags great adventure and we are doing at big.
Selim A. Bassoul: We are celebrating our 50th anniversary of Six Flags Great Adventure, and we are doing it big. The Flash Vertical Velocity, a first of its kind super boomerang coaster, will zip you 100 feet above the ground. Featuring a 180-degree twisted drop followed by a zero G roll and will reach speeds of up to 59 miles per hour, at Hurricane Harbor, New Jersey, who are installing the new Splash Island Kids Playhouse truck, complete with 50 play features, slides, waterfalls, and a gigantic water bucket to soak splash seekers.
Speaker Change: The flash vertical velocity, if first of its kind Super Boomerang clusters will Sue will ZIP your 100 feet off the ground feature 180 degree twister drop followed by the zero G role and will reach speed of up to 59 miles an hour.
Speaker Change: Hurricane Harbor, New Jersey, we're installing the new Splash Island keeps Playhouse structure complete was 50 play features slides waterfalls any gigantic water bucket to soap splashed.
Splash secrets.
Selim A. Bassoul: And in June, we'll be opening our new Savannah Sunset Resort and Spa, an overnight oasis offering panoramic views within our 350-acre safari and behind-the-scenes encounter. The spots are filling up quickly, so be sure to book this luxury experience as soon as possible. This year's Fry Fest is really going to raise the bar for our signature event, who are amping up the thrills with the new ScareZone. Upgraded Macy's and other new hair-raising attractions to take the fear factor to a whole new level. They are also adding new movie-themed haunted houses at even more of our parks this year. That's all I will say for now, so stay tuned for more details.
Speaker Change: And in June.
Speaker Change: We'll be opening our new stuff on Sunset resort and Spa in overnight always this offering.
Speaker Change: Panorama view was in our 350 acre society and behind the scenes in counters.
Speaker Change: Spots are filling up quickly so be sure to book this luxury expedience as soon as possible.
Speaker Change: Next.
Speaker Change: This year's Fright Fest is really going to raise the bar for our signature event well.
Speaker Change: What are amping up the thrills was new scare zones.
Speaker Change: Upgrade at Macys, and other new hair raising.
Speaker Change: Attraction to pick a few factors to a whole new level.
Speaker Change: We are also adding new movie scene haunted houses.
Speaker Change: Even more of our parks. This year, that's all I will say for now so stay tuned for more details.
Speaker Change: Yeah.
Selim A. Bassoul: Before opening the call for your questions, I want to highlight an initiative that we are very proud of. This summer, we expect to complete our third major solar installation at Six Flags Magic Mountain, which is expected to save over $100 million over the next 30 years, and it will provide a convenient shaded parking option for our guests. That is another convenience.
Speaker Change: Before opening up the call for your questions I want to highlight an initiative.
Speaker Change: Practically proud off.
Speaker Change: This summer we expect to complete our third major solar installation at six flags Magic Mountain, which is expected to save over $100 million over the next 30 years.
Speaker Change: And it will provide a convenient changes parking option for our guests.
Speaker Change: That is in house of convenience.
Selim A. Bassoul: Alka, combined with our solar installation at Six Flags Great Adventures and Six Flags Discovery Kingdom, we will be the largest producer of carport solar power in North America. Also... We have finalized plans to launch our fourth solar installation project at Six Flags Great America. These initiatives are a win-win for everyone we serve. They serve our guests by improving our parking lot. They serve our communities by using renewable energy to power our park, and they serve our shareholders by reducing our operating costs.
Speaker Change: For our guests.
Speaker Change: Combined with our solar installation at six flags, Great Adventures and six flags discovery Kingdom, we will be the largest producer of carport solar power in North America.
Speaker Change: Also.
Speaker Change: We have finalized plans to launch our fourth solar solar installation project at six flags Great America.
Speaker Change: These initiatives are a win win for everyone. We serve.
Speaker Change: They sort of our guests by improving our parking lots.
Speaker Change: Serve our communities by using renewable energy to power all box and.
Speaker Change: And they serve all shareholders by reducing our operating costs.
Selim A. Bassoul: I will conclude by saying that our transformation from premiumization, to the largest investment in rides ever, to reinventing the customer journey, is about putting the guests at the heart of the experience, where every family member, from toddlers to teenagers, to grandparents, finds moments of joy and thrills. Every minute at Six Flags is a minute well spent. With that, operator, would you please open the call for any questions?
Speaker Change: I will conclude by saying that our transformation from premium musician.
Speaker Change: So is the largest investment in Reits ever.
Speaker Change: To reinventing the customer journey.
Speaker Change: It's about putting the guest at the heart of the experience.
Speaker Change: Well every family member from toddlers.
Speaker Change: Two teenagers to grandparents finds find moments of joy and threats.
Speaker Change: Every minute at six flags is a minute well spent.
Speaker Change: Every minute at six flags is a minute well.
Speaker Change: With that operator would you. Please open the call for any questions.
Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star and two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Steve Wieczynski with People. Please go ahead.
Speaker Change: We will now begin the question and answer session.
Speaker Change: Ask a question.
Speaker Change: May Press Star then one on your Touchtone phone.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: Is it any time your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question today comes from Steve <unk>.
Steve: With Stifel. Please go ahead.
Steven Moyer Wieczynski: Hey, guys. Good morning. Morning, Steve. How are you?
Steve: Yeah, Hey, guys good morning.
Steve: Good morning, Steve how are you. So so Gary can you help us think about the per caps, a little bit better not only for the second quarter, but for the rest of the year I think you've confused me a little bit with some of your commentary. So so let me see if I got this right full year total guest spending.
Gary Mick: So, Gary, can you help us think about the per capita numbers a little bit better, not only for the second quarter but for the rest of the year? I think you confused me a little bit with some of your commentary. So let me see if I got this right. Full year total guest spending will be up slightly versus last year, but it sounds like the biggest drag on those per-caps is going to be occurring in the second quarter.
Gary: Well, we'll be up slightly versus last year, but it sounds like the biggest drag on those per caps is going to be occurring in the second quarter. So I just want to make sure I have that right and then anything else you could you would add on in terms of the cadence for the rest of the year from a per cap perspective would.
Gary Mick: So I just want to make sure I have that right. And then anything else you could, you know, you would add on in terms of the cadence for the rest of the year from a per cap perspective would be super helpful. Thanks.
Speaker Change: It would be super helpful. Thanks.
Gary Mick: Yeah, you're welcome, Steve. And good morning.
Speaker Change: Yeah, Youre welcome Steven and good morning.
Gary Mick: So the percaps on in-park spends are the aspect that will be favorable for the balance of the year. We're seeing, again, good traction there from what we would say our in-park revenue generation, investments, and revenue strategies are providing a solid lift. The admissions side of the per capita is also, we believe, to be up slightly, but it will be more moderated over the time of the year, and that goes to the 13 plus impact on that aspect.
Speaker Change: So the per caps.
Speaker Change: And in park spend are the aspect that will be favorable for the balance of the year.
Speaker Change: We're seeing again good traction there from what we would say our in park revenue generations and investments.
Speaker Change: Revenue strategies are providing a solid lift the ed.
Speaker Change: Admission side of the per caps is it's also we believe to be up slightly but it will be more moderated over the time of the year and that goes to the 13 plus impact on that aspect.
Gary Mick: So Q2 has the impact of the 10 million of the... 13 plus. So that, to your point, is certainly going to moderate the impact, the upside impact of Spend on Q2, but Q3 and Q4 should provide a nice lift.
Speaker Change: So the Q2 has the.
Speaker Change: The impact of the $10 million of.
Speaker Change: The.
Speaker Change: 13th bus so that to your point is certainly going to moderate the impact the upside impact of the in park spend on Q2, but Q3 and Q4 should should provide a nice lift.
Gary Mick: So then Q3 and Q4 should be up nicely. Yes. Okay.
Speaker Change: So then Q3 and Q4 should be up nicely.
Selim A. Bassoul: And then Selim, I want to ask about past sales. And I fully understand the unit side of the equation being up so much, given that you guys didn't sell as many units last year. But, you know, I'm surprised that you indicated pricing is up significantly as well. So, just wondering if you can kind of break the pricing side down. And maybe, you know, what is driving the price increase at this point? And if that's a much higher mix of the premium priced past products? Thanks. Exactly.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: And then Selim, what I want to ask about <unk>.
Speaker Change: Sales and I fully understand the unit side of the equation being up so much given you guys didnt sell as many pass sales last year, but.
Speaker Change: I'm surprised that you indicated pricing.
Speaker Change: It is up significantly as well. So just just wondering if you can kind of break the pricing side down and maybe what is driving the price increase at that point at this point and if that's a much higher mix of the premium priced past products. Thanks.
Selim A. Bassoul: Exactly, Steve. You remember that we all increased past prices significantly in 2022. And then we knew that this was a challenge, but we needed to reset and recalibrate with our guests. Now, what we've done, we've learned a lot since then, and we went to a more balanced and holistic approach to our past offerings. So what we're doing right now is optimizing the balance of single-day tickets and pricing of our simplified pass.
Speaker Change: Exactly.
Speaker Change: You will remember that all increased past prices.
Speaker Change: Pretty significantly in 2022.
Speaker Change: And then we knew that this was it.
Speaker Change: But we needed to reset and recalibrate with our guests.
Speaker Change: Now what we've done we've learned a lot since then and we went to a more balanced and holistic approach to our pass offerings.
Speaker Change: So what we're doing right now is we are optimizing the.
Speaker Change: The balance of single day tickets and pricing.
Speaker Change: Our simplified passes so from that perspective, we have basically a promo going on right now with the pricing.
Selim A. Bassoul: And from that perspective, we have basically a promo going on right now where the pricing is very simple. You buy a gold pass, you get a platinum, you become a platinum member. You buy a platinum, you become a diamond member. And we've seen a significant so far, we launched it a couple of days ago, and there's been a fantastic, fantastic response to that promo. I want to remind everybody that
Speaker Change: Is very simple you buy a gold pass you get a platinum platinum.
Speaker Change: You become platinum member you buy your platinum you become a diamond member.
Speaker Change: And we've seen a significant so far we've launched it a couple of days ago.
Speaker Change: And it has been if fantastic.
Speaker Change: <unk> response to that promo now.
Speaker Change: I want to remind everybody that <unk>.
Gary Mick: The pricing of that promo is higher, Gary, could you just make sure that I'm correct on this, is higher than the same time in 2023? Yes. And higher than 2019, correct?
Speaker Change: Pricing of that problem.
Speaker Change: His hire Scotty could you just make sure that I'm correct on this is higher than the same time in 2023.
Scotty: Yes, and hires in 2019 correct.
Gary Mick: Yes, yes. So in both cases, the promo is more effective because there are three things that I'm happy about. Number one, realize that our guests are trying to move up in terms of past, but some of them might not be able to afford it.
Scotty: Yes, yes, so in both cases the <unk>.
Scotty: <unk> is more effective because there are three things I'm happy about number one.
Scotty: We realize that all guests are trying to move up in terms of <unk>.
Scotty: Passes.
Scotty: But some of them might not be able to afford it.
Selim A. Bassoul: So by giving the opportunity to buy a gold pass and you get, you get a platinum, benefits have been a big plus, and we saw that last year. But what's interesting for us is that this year, when you buy a platinum, you get a diamond, and this has been a very good mix. Yes. We have had a fantastic mix, almost 50-50, so far since the launch a couple of days ago where 50% of our people upgraded to platinum and 50% upgraded to diamond.
Scotty: So by giving them the opportunity to buy a growth path and you get you get platinum.
Scotty: <unk> benefits have been a big plus and we've seen that last year, but it was interesting for US is that you've added. This year you bought your platform you got a diamond and this has been a very good mix. Yes, we have had a fantastic mix almost 50 50, so far since the launch of a couple of days ago with 50% of our people upgrading to plateau.
Scotty: 50% of drilling to Diamond yes.
Gary Mick: Yeah, Mick has a lot to do with the average season pass price, Steve.
Scotty: Mix has a lot to do with the average season pass price Steve.
Steven Moyer Wieczynski: Okay, gotcha. Thanks for the color, guys. I really appreciate it.
Speaker Change: Okay got you. Thanks for the color guys really appreciate it yeah you bet.
James Lloyd Hardiman: The next question comes from James Hardiman with Citi. Please go ahead.
Speaker Change: Our next question comes from James Hardiman with Citi. Please go ahead.
Scotty: Yeah.
James Lloyd Hardiman: Hey, good morning. Thanks for taking my question. And at the risk of trying to do some math on the slide here, which is always, I think, difficult, I just wanted to make sure we've got all the puzzle pieces for the second quarter, because it feels like 2Q is going to be a big challenge. So you talked about sort of the Easter shift being a negative, and you called it a 90,000 visit headwind. So that's maybe, you know, a point or point and a half of attendance headwind.
James Lloyd Hardiman: Hey, good morning.
James Lloyd Hardiman: Thanks for taking my question.
James Lloyd Hardiman: At the risk of trying to do some math on the on the slide here.
James Lloyd Hardiman: As always.
James Lloyd Hardiman: Difficult I just wanted to make sure we've got all the puzzle pieces for the second quarter, because it feels like <unk> is going to be a bit challenged so yeah.
James Lloyd Hardiman: You talked about sort of the Easter shift being a negative call. It a 90.
James Lloyd Hardiman: Visit headwind, so that's maybe a point point.
James Lloyd Hardiman: Point and a half of a tendon headwind and we've got this per cap issue, which is another.
James Lloyd Hardiman: And we've got this per cap issue, which is another two and a half points. So I'm getting to maybe a 4% revenue headwind for 2Q. And then we've got advertising, which I think, Gary, you said in your prepared remarks was going to be up, it's going to be up in the second quarter. And then you've got inflation, which, you know, I think you noted was going to be worse in 2Q than what we saw in 1Q, just based on the parks that are going to be coming into the mix.
James Lloyd Hardiman: Two five points, so I'm getting to maybe a 4% revenue headwind for QQ.
James Lloyd Hardiman: And then we've got advertising, which I think Gary you said in your prepared remarks are going to be up you are going to be up in the second quarter.
James Lloyd Hardiman: Then you've got inflation.
James Lloyd Hardiman: Yes, I think you noted was going to be worse in <unk> than what we saw in <unk> just based on the parks that are going to be coming into the mix. So I guess my bottom line question. I mean, you did 161 million in <unk> last year.
James Lloyd Hardiman: So I guess my bottom line question, I mean, you did $161 million in 2Q last year, and the Street is assuming that you can grow on that this year. That seems maybe overly optimistic based on what you've laid out. I don't know if there's a way to think about sort of the starting point of EBITDA as we look at Q1, but it just feels to me like it's going to be really difficult to grow EBITDA in the second quarter. Is that fair?
James Lloyd Hardiman: The Street is assuming that you can grow on that this year that seems maybe overly optimistic based on what you've laid out.
James Lloyd Hardiman: I don't know if theres a way to think about sort of the starting point of EBIT as we look at <unk>, but it just feels to me like it's going to be really difficult to grow EBITDA in the second quarter is that fair.
Gary Mick: Hi James, and good morning. Great question. Of course, that depends on many things, but you laid out the items that we had identified. We have 13 plus As a revenue headwind, we mentioned that was 10 million, and that mostly drops through the bottom line. We're investing in media. We have a new ad campaign that we're very excited about, and that has recently launched, and we're carrying that deeper into Q2 than we did in the prior year.
Speaker Change: Hi, James and good morning, Great question.
James Lloyd Hardiman: Of course that depends on many things, but you laid out the items that we had identified we have 13 plus as revenue headwind, we mentioned that was $10 million.
Speaker Change: And that mostly drops through the bottom line.
James Lloyd Hardiman: We're investing in media, we have a new AD campaign that we're very excited about and that has recently launched and we're carrying that.
James Lloyd Hardiman: Into deeper into Q2 than we did in the prior year. So we believe that's going to be very impactful on season pass sales group.
Gary Mick: So we believe that it's going to be very impactful on the Season Pass Sales Group and Singlete. So that's an additional investment. The Easter shift, which we've talked about here, and inflation. So the offset to those are cost mitigation strategies, which Selim and the team are aggressively and diligently pursuing, as well as a lift on per capita. All right, so we've laid out the investment strategies and the revenue strategies for Q2. It depends on attendance and, of course, weather and penetration factors that determine how much the per cap lift is. But that's the upside.
James Lloyd Hardiman: Similarly tickets.
Selim A. Bassoul: Got it. Go ahead.
James Lloyd Hardiman: So that's an additional investment of Easter shift, which we've talked about here and inflation. So the offset to those are cost mitigation strategies, which claim is and the team are aggressively and diligently pursuing as well as the lift on per caps alright. So we've laid the inverse.
James Lloyd Hardiman: <unk> strategies and the revenue strategies for Q2, it depends on attendance and of course weather.
James Lloyd Hardiman: Penetration factors that determine how much the per cap lift is but that's upside.
James Lloyd Hardiman: So those headwinds.
Speaker Change: Got it.
Speaker Change: Go ahead.
Selim A. Bassoul: I want to make sure that we understand that we have not, we are not managing, and we've never managed quarter to quarter. I'm going to tell you this is why we haven't done guidance.
Speaker Change: I want to make sure.
Speaker Change: And we.
Speaker Change: We have not we are not managing and we've never manage quarter to quarter I'm going to tell you. That's why we haven't done giving guidance, but I'm going to share with you that the second quarter, we're investing.
Selim A. Bassoul: But I'm going to share with you that in the second quarter, we're investing, first of all, in our media spend to make sure that our season pass promotion is very effective. And we've learned from the last two years that we cannot miss the Memorial Day sale, and we're putting a lot of effort into it. So we're basically moving some advertising money from the third quarter into the second quarter. So that's number one. Number two.
Speaker Change: And first of all we're investing in our <unk>.
Speaker Change: Media spend to make sure that our season pass promotion is very effective.
Speaker Change: And we've learned from the last two years that we cannot Miss the memorial day sale and we're putting a lot of effort into it. So we're basically moving some advertising money from the third quarter into second quarter.
Speaker Change: So that's number one.
Speaker Change: Number two.
Selim A. Bassoul: We are also facing, we had April, we had significant rain in April, and we had several days of rain that affected many of our parks that were open at that time, specifically in Dallas. And then we have the Easter shift. So your comment about EBITDA being down in the second quarter is correct, and then in the second half is where we will basically, this year is all about the second half. So our second half is where we're putting all the emphasis and where all our monetization is coming through.
Speaker Change: We are also face.
Speaker Change: Facing we had April we had significant trained in April and we had several days of rain that affected.
Speaker Change: Many of our parks that were open at that time, specifically in Dallas.
Speaker Change: And then we have the Easter shift so your comment about being EBITDA down in second quarter is correct.
Speaker Change: And they got it in the second half is way up we would basically this year is all about the second half.
Speaker Change: So our second half is where we're putting all.
Speaker Change: The emphasis and where all our monetization is coming through so we've put a lot of things coming through we have a.
Selim A. Bassoul: So we have a lot of things coming through. We have a lot of rides opening up, and FriFest. We are investing significantly in IP. It will be the biggest investment in IP ever, ever in the history of this company. Five or six IPs that are totally new.
Speaker Change: A lot of fried to opening up.
Speaker Change: And first we are investing in significant fright Fest in IP. It will be the biggest investment in fright Fest ever.
Speaker Change: In the history of this company.
Speaker Change: Five or six IP that I'll talk to the new bright in the 'twenty rides and attractions that we have coming out James all in general between May and the <unk>.
Gary Mick: Right, and the 20 rides and attractions that we have coming out, James, all hit in general between May and the 4th of July weekend, Memorial Day on the 4th of July, so the impact on that list and attendance would be more felt in the second half.
Speaker Change: Fourth of July weekend Memorial day, and fourth of July so the impact on that that lift in attendance would be would be more felt in the second half.
James Lloyd Hardiman: Got it. And so, that dovetails nicely into the second part of my question. Sounds like 2Q is sort of an investment quarter, effectively. And the way you've laid out the second half, sounds like per caps should inflect positively. Sounds like, all else equal, maybe margins get a little bit of a lift because, you know, you're shifting some of that advertising spend.
Speaker Change: Got it and so that dovetails nicely into the second part of my my question. It sounds like <unk> is sort of an investment quarter effectively.
Speaker Change: And the way you've laid out the second half.
Speaker Change: It sounds like per caps should inflect positively it sounds like all else equal maybe margins get a little bit of a lift because you know you're shifting some of that that advertising spend.
Gary Mick: I wanted to talk specifically about attendance in the second half. Half, you know, in the first quarter, X the Easter benefit, you're basically flat. But it sounds like you think in the second half, you can do something meaningfully better than flat. I don't know if I'm reading too much into that, but it seems like you're pretty optimistic about the second half. Yeah.
Speaker Change: I wanted to talk specifically about attendance.
Speaker Change: In the second half.
Speaker Change: In the first quarter extra the Easter benefit Youre basically flat, but it sounds like you think in the second half you can do something meaningfully better than flat I don't know if I'm reading too much into that but it seems like you're pretty optimistic about second half.
Gary Mick: Yeah, James, I agree with you. And that's the way we modeled it out. We have, you know, the rides and attractions I just mentioned, the season pass sales trend, the group sales trend, which is very strong. Selim mentioned Fright Fest; we're really investing heavily in that. The media campaign and our adjusted active pass base, you take out those annual passes, which generally start to fall off pretty heavily. And at the end of Q2 and Q3, you know, we should have a pretty strong active pass base at the end of Q3. So all of those leading indicators are saying what the second half should be like.
Speaker Change: Yeah, James I agree with you and that's the way we've modeled it out we have the.
Speaker Change: Our rides and attractions I just mentioned the season pass sales trend the group sales trend, which is very strong.
Speaker Change: So we mentioned Fright Fest, we're really investing heavily in that the media campaign and our adjusted active pass base you take out those annual passes which generally starts to fall off pretty heavily in the.
Speaker Change: End of Q2 and Q3.
Speaker Change: We should have a pretty strong active pass base at the end of Q3. So all of those leading indicators are saying in the second half should should be good.
James Lloyd Hardiman: Really helpful. That's a great color. Thanks, guys.
Speaker Change: Really helpful. That's great color thanks, guys.
David Brian Katz: The next question comes from David Katz with Jeffrey. Please go ahead.
Speaker Change: The next question comes from David Katz with Jefferies. Please go ahead.
David Brian Katz: Good morning, everybody.
David Brian Katz: Kurt.
David Brian Katz: Morning, everybody. Thanks for listening. Good morning, everybody. Thanks for taking my question.
David Brian Katz: Sorry.
David Brian Katz: Good morning, everybody. Thanks for taking my question.
Selim A. Bassoul: I wanted to go back to the loyalty program, Selim, that you talked about. And I just wanted to get a little more color on what you're gonna do with it, but more importantly, how that is intended to fold into the merged company whenever that occurs. Is that going to be a single unified loyalty program, or how does that, what is the notion of that?
David Brian Katz: Wanted to go back to the loyalty program.
David Brian Katz: Selim that you've talked about and.
David Brian Katz: I just wanted to get a little more color on what are you going to do with it but more importantly.
David Brian Katz: How that is intended to fold into the merged company whenever that occurs.
David Brian Katz: Or is that going to be a single unified.
David Brian Katz: Loyalty program or how does that what is the notion of that.
Selim A. Bassoul: David, first of all, good morning. It's a We have been. I am a big believer in loyalty programs. I use them, I believe in them, and it allows me to go back and fly with the same airline or the same hotel because I like and enjoy those loyalty programs. So since I joined this company, I wanted to put in a loyalty program, but we, at the time, we needed to upgrade two things. We need to upgrade our POS systems so they can honor the points and do that.
David Brian Katz: David first of all good morning, it's a fantastic question we have been.
Speaker Change: I am a big believer in loyalty programs I use them I believe in them.
David Brian Katz: It allows me to go back to fly the same airline or the same hotel because I like enjoys those large broken up so well since I joined this company I wanted to put a loyalty program number three at the time, we needed to upgrade two things we need to upgrade our Pos system. So it can honor the points and me.
Selim A. Bassoul: So we needed technology to help us to put in place a loyalty program. Second, we needed a better mobile app, which we just launched, and a better website so people can track all their... points, and they can redeem them easily at all times. So the question has been, Where do you see that loyalty program? We see it to be rewarding our repeat visitors, good spend on our part, and making sure that they get great value from it. Now,
David Brian Katz: That so we need the technology to help us to put a loyalty program.
David Brian Katz: We need to.
David Brian Katz: Our mobile App, which we just launched and it better website. So people can track calls all day of points and they can redeem them easily at all times. So the question has been is.
Selim A. Bassoul: Where do you see that loyalty program, we see it to be rewarding.
Selim A. Bassoul: Our repeat visitors.
Selim A. Bassoul: Good spending in our parks.
Selim A. Bassoul: And make sure that they get great value from it now.
Selim A. Bassoul: The success of whether we integrated with Cedar Fair or not, at this moment, we are trying to make sure that this is a very powerful program. So if you notice anything about what we've done. Everything we've done at the company in the last two years has taken a longer time because you want to do it right. So we went in and put a lot of effort into our website, and it took a little bit longer to implement because we wanted that website to be stunning, and we spent more money, and we put a lot of time, and we tested it with many of our part presidents, with our staff, and some of our guests. The same with mobile ordering. The same with every technology we're launching. It's taking it very cautiously.
Selim A. Bassoul: The success of whether we integrated with <unk>.
Selim A. Bassoul: Is cedar fair or not at this moment, we are trying to make sure that this is a very powerful program. So if you notice about what you've done.
Selim A. Bassoul: Everything we've done at the company in the last two years have taken longer time.
Selim A. Bassoul: Because we wanted to do it right.
Selim A. Bassoul: So we went in and put a lot of effort into our website and it took a little bit longer to implement because wanted that website to be stunning.
Selim A. Bassoul: And we spend more money and we put a lot of time and we tested it with many of our park President with all staff and some of podcasts.
Selim A. Bassoul: The same was the mobile ordering the same was off three technology. We're launching is taking it very cautiously so our loyalty program.
Selim A. Bassoul: So our loyalty program. Our loyalty program is also being vetted correctly. So from the get-go, it gives people excitement. It has to be something that people say, wow, I like it. And we're modeling it very much after what I call the Mario Hotel program. We like the Mario Hotel program, and we like the way it's easy to use, and it's not complicated, and that's the program we're going after.
Selim A. Bassoul: Our loyalty program is also being vetted correctly. So from the get go it gives people excitement it has to be something that people say wow I like it and we're modeling it very much so to what I call.
Selim A. Bassoul: Oh, the Marriott program, we like the Marriott Hotel program and we like the way, it's easy to use and it's not complicated and that's the program we're going after.
Selim A. Bassoul: I think part of my question, I know we're not supposed to be asking about the merger, but is the notion, you know, that there would be a single loyalty program across the platform one day?
Speaker Change: Understood I think part of my question I know, we're not supposed to be asking about the merger, but it is the notion.
Selim A. Bassoul: It would be there would be a single loyalty program across the platform one day.
Selim A. Bassoul: I don't know about that. Honestly, at this moment, I'm going to answer one thing that me and Richard Zimmerman have agreed upon. We like to have our parks remain basically autonomous, being able to cater to their local communities. So we start with something that we've agreed upon. We're trying to make sure what is best for the guests is first. And if merging the loyalty program is better, we'll make that happen. If it's too complicated, we won't make it happen.
Speaker Change: I don't know about that.
Selim A. Bassoul: Honestly.
Selim A. Bassoul: At this moment I'm going to answer one thing that me and Richard Zimmerman have agreed upon with.
Selim A. Bassoul: We like to have our parks remain.
Selim A. Bassoul: Basically autonomous.
Selim A. Bassoul: Being able to cater to their local communities. So we start with some things that you've agreed upon we're trying to make sure what is best for the guest.
Ed: First Ed.
Selim A. Bassoul: And if merging the loyalty program is better will make that happen if it's too complicated and we won't make it happen. So one thing I love about this merger is that this merger.
Selim A. Bassoul: So one thing I love about this merger is that this merger is truly about the guests, and I'll talk about that. We are not, for example, merging anything. The names are remaining the same. Cedar Point remains Cedar Point. It doesn't become Six Flags Cedar Point. Our great adventure remains the same.
Selim A. Bassoul: He is truly about the gas and I'll talk about it we are not for example.
Selim A. Bassoul: Emerging anything the names are remaining the same at Cedar Point's remains Cedar point it doesn't become six flags.
Selim A. Bassoul: To the point the hour a great adventure remains the plan I think there is a lot of autonomy if keeping those parks operating very decentralized and operating on its own I think they are all different competitors different communities are they have local competitors from one to another and we're keeping it very basically.
Selim A. Bassoul: I think there is a lot of autonomy in keeping those parts operating very decentralized and operating on their own. I think they have all different competitors, different communities. They have local competitors from one to another, and we're keeping it very basically through it and letting those parts be run and compete and operate as a standalone.
Selim A. Bassoul:
Selim A. Bassoul: Fluid.
Selim A. Bassoul: And let those part be run as a <unk>.
Selim A. Bassoul: Compete and operate as a standalone.
David Brian Katz: understood. One last quick one, if I may.
Selim A. Bassoul: Understood.
Speaker Change: One last quick one if I may you made some commentary about AI and it's certainly top of mind for everybody. If you could spend a second and just elaborate on.
David Brian Katz: That a customer engagement tools that on the operating side.
Speaker Change: What specific where you're starting with that where it is.
David Brian Katz: So in three places.
David Brian Katz: You made some commentary about AI, and it's certainly top of mind for everybody. If you could spend a second and just elaborate on, you know, is that a customer engagement tool? Is that on the operating side?
David Brian Katz: Hey, I was using I first for training our employees. So this has been already launched internally, where our employees can now be trained all our seasonal work are being trained and be able to use AI to get all the answers the second.
Selim A. Bassoul: Where are you starting with that? Well, it starts in three places. AI, we're using AI first for training our employees. So this has already been launched internally, where our employees can now be trained. All our seasonal workers are being trained and will be able to use AI to get all the answers. Another feature is our guest engagement, and that goes into specifically making sure that we start with the chat box. We want people to be able to get answers and have answers.
Selim A. Bassoul: Fixture is our guest engagement and that goes into specifically, making sure that we start with the chat box.
Selim A. Bassoul: Today we have, call it, 100 people plus in customer service answering the questions. And you know, the last thing you want to do is not be able to get through to answer your questions. And we are using AI to make sure that we can personalize your question. The AI feature goes into your specific season path and specific issue. And we'll come back and tell you whatever you need relevant to you. This is not answering the hours of operation in the park. It's going and answering customized questions...
Selim A. Bassoul: We want people to be able to get the answers and have answers today, we have.
Selim A. Bassoul: Call. It 100 people plus in Ain customer service answering the questions and you know the last thing you want to do is be able to not be able to get through to answer your questions and we are using AI to make sure that we can put us in lines of question. The AI feature goes into your specific.
Selim A. Bassoul: Season pass and specific.
Selim A. Bassoul: Issue and we'll come back and tell you whatever you need develop it to you. This is not answering the hours of operating in the puck is going and answering customized.
Selim A. Bassoul:
Selim A. Bassoul: Questions.
Selim A. Bassoul: Answers.
Selim A. Bassoul: and CERN, which is using AIs for safety. So we are using and upgrading our AI cameras, and we're starting with our water park, with our lifeguards, and that has been very, very big for us. So, there are three ways. One is making sure that our employees can use AI and do their work day in, day out. We're using AI in interfacing with our parks, with our guests, and in the search for safety, where our cameras are becoming the AI-dripped.
Selim A. Bassoul: And the sort of reduce using AI is in safety.
David Brian Katz: Understood. Thanks very much. Thank you.
Selim A. Bassoul: So we are using upgrading our AI AR come at us and we're starting with our water parks.
David Brian Katz: Lifeguards and that has been very big for us.
David Brian Katz: So.
David Brian Katz: It's three ways. It's one is making sure that our employees can use AI and day in day out doing their work, we're using AI in interfacing with our parks in without guests and the search for safety.
David Brian Katz: We're off cameras are becoming very AI driven.
David Brian Katz: Okay.
David Brian Katz: Understood Thanks very much.
David Brian Katz: Thank you, David. Thank you, David.
Speaker Change: David Thank you Dave.
Ian Alton Zaffino: The next question comes from Ian Zaffino with Oppenheimer. Please go ahead.
Speaker Change: The next question.
David Brian Katz: It comes from Ian Zaffino with Oppenheimer. Please go ahead.
Ian Alton Zaffino: Hi, great. Just wanted to kind of ask about the Strzden Group. You know, is that all just an internal effort? Are you seeing anything different in the market as far as, is there a trade down or anything like that? State of the Consumer, maybe to wrap that in there. And then I guess there was a Waterpark recently sold kind of outside of your Chicago, Park.
Ian Alton Zaffino: Great.
Ian Alton Zaffino: Got it.
Ian Alton Zaffino: Can I ask about the strength in group you know is that all just an internal effort.
Ian Alton Zaffino: Different from the market as far as their trade down or anything like that and state of the consumer may be more rapid than I guess, there was a waterpark recently sold kind of outside of your Chicago.
Gary Mick: Any comments on that? Did you look at it? Was it interesting? Or any other comments would be great. Thank you.
Ian Alton Zaffino: Park.
Speaker Change: Comments on that.
Gary Mick: Yeah, good morning, Ian. I'll answer the questions in reverse order.
Gary Mick: I don't have a comment on the water park acquisition, but I do not believe it will affect us in any negative way in that market. The state of the consumer, from what we see so far, is very healthy. The MPARC spends, as we indicated, in Q1, which is continuing, you know, the same direction into April and May, you know, it certainly gives us a good look at the spending and it remains healthy, and we feel good about that. Of course, you know, weather and macro and whatever the state of the consumer mindset is, it can affect that. Those things we can't control. But what we see so far is solid.
Gary Mick: And then on the group side, you know, we restructured the group teams to go local. So we physically moved our staff out of the corporate office here in Arlington and back to the park, and the engagement and the additional media support that we've also provided have given a good lift. I think, as I listened to other entertainment and theme park companies. It is a trend across the United States that groups are coming back. I think it's also part of the exit of COVID, and as people realize that this is a really great, fun thing to do, and we're benefiting, maybe from that macro.
Gary Mick: Teams to go local.
Ian Alton Zaffino: Okay, thank you very much.
Gary Mick: And so we physically moved our staff out of the corporate office here in Arlington and back to the parks.
Ian Alton Zaffino: And the engagement and the additional media support that we've also provided has has given a good left I think as I listened to other.
Ian Alton Zaffino: Entertainment and theme park companies. It is a trend across the United States that groups are coming back. It's I think it's also part of the exiting of Covid.
Ian Alton Zaffino: And as people realize that there's a really great fun thing to do and and you know, we're we're benefiting maybe from that macro.
Ian Alton Zaffino: Okay. Thank you very much.
Speaker Change: [noise]. The next question comes from <unk> <unk> Bank. Thank God.
Chris Jon Woronka: The next question comes from Chris Waronka with Deutsche Bank. Please go ahead.
Chris Jon Woronka: Hey, good morning, guys. Thanks for all the details so far. Question: from top to bottom, are these parks getting closer together in performance in terms of year-over-year growth? Or are they getting further apart? So not asking about specifics really, but just kind of rank ordering. Curious as to how that's going, the way you guys look at it.
Chris Jon Woronka: Hey, good morning, guys. Thanks for all the details so far.
Chris Jon Woronka: Question on you if you look at your your portfolio parks.
Chris Jon Woronka: Would you say that the the top to bottom or are these parks getting closer together and performance in terms of year over year growth or they were getting further apart. So so not asking about specifics really but just kind of rank ordering I'm curious as to as to how that how that is going the way you guys look at it.
Gary Mick: We don't really give out individual park performance metrics, Chris, at this stage, but Selim's vision and strategy has been applied equally across all parks, and it is certainly responding. Each park has a different demographic, each part has a different locale, and a different appeal, and different ride package. But yes, they are, they are moving in the same direction.
Speaker Change: We we don't really give out individual park performance metrics, Chris at this stage, but <unk> vision and strategy has been applied equally across all parks and it is it is certainly responded each park has a different demographic.
Gary Mick: Demographic each part is a different locale in a different appeal on different ride package, but.
Gary Mick: Yes. They are they are moving in the in in the same direction.
Chris Jon Woronka: Okay, all right, thanks, Gary. And then there's a follow-up, and it's not a merger question, but I'll, you know, mention Cedar Fair. I know that one of the things they talked about heading into the season was kind of adjusting some of the operating days and even the hours. And I know you mentioned your days were roughly flat in Q1. Is that something you consider as we move into, you know, through the shoulder season, into prime season? Should we expect any changes in your operating days or hours?
Speaker Change: Okay, Alright, Thanks, and then there's a follow up and it's it's not a merger question, but you know it's mentioned Cedar fair I know that what are the things they talked about heading into the season was it was kind of adjusting some of the operating days and even the hours and I know you mentioned, you're you're days, where roughly flat in Q1.
Chris Jon Woronka: Is that something you consider as we move into you know through shoulder season.
Chris Jon Woronka: <unk> season should we expect any changes in your operating days or hours.
Gary Mick: We don't have anything published at this stage, Chris, but we will always look at a day as to whether it's either a creative or not. But the other thing we look at is our events. And last year, we talked about this on our third quarter earnings call, where we executed a significant number of new events. And this year, in Q2, 3, and 4, we're going to focus on EBITDA creative ROI, and creative events, and so we should save some OPEX.
Gary Mick: We don't have anything published at this stage, Chris, but we will always look at a day as to whether it's either to accretive.
Gary Mick: But the other thing we look at us as our events and and last year, we talked about this on our third quarter earnings call where we.
Gary Mick: Executed a significant number of new events.
Gary Mick: And this year in Q2, three and four were going to <unk>.
Gary Mick: Focus on EBITDA accretive Roy accretive events, and so we should save some of X.
Chris Jon Woronka: Okay, very good. Thanks, Gary.
Chris: Okay very good thanks, Gary.
Speaker Change: Thank you.
Gary Mick: Thanks, Chris.
Thomas L. Yeh: The next question comes from Thomas Yeh with Morgan Stanley. Please go ahead.
Chris Jon Woronka: The next question comes from Thomas Yeah, with Morgan Stanley. Please go ahead.
Thomas L. Yeh: Thanks, good morning. Yeah, I appreciate all the puts and takes on the per caps. Gary, I think you mentioned in part continuing the same kind of direction in terms of growth into April and May. So maybe just to put a finer point on that, if we strip out the 10 million headwind from membership revenues, should we think about kind of the organic per cap growth? You did 3% this last quarter in one Q. Is that still kind of holding up in that zone through the course of the year?
Thomas L. Yeh: Thanks, Good morning, Yeah, I appreciate all the puts and take on the per caps. Gary I think you mentioned in park continuing with the same kind of Directionally in terms of growth into April and May. So maybe just to put a finer point on that if we strip out the 10 million headwind from membership revenues should we think about kind of the organic per cap growth.
Thomas L. Yeh: You did three per cent this last quarter and one Q is that still kind of holding up in that down through the course of the year.
Gary Mick: A great question, Thomas. Yes, I think that's fair to say, and it's more meaningful in Q3 and four.
Gary Mick: He can great question, Thomas Yes [noise].
Gary Mick: That's that's fair to say and it's more meaningful in Q3 and four.
Gary Mick: Okay, great. And then I think you cited the 4% cost inflation. Is that inclusive of essentially what your view is on the impact you're seeing from the minimum wage increases for the parks that are opening back up? And should we kind of think about labor costs generally moving in that direction, you know, offset by potentially some efficiency initiatives that you're kind of putting in place? Yes.
Gary Mick: Okay, Great and then I think you said it before per cent cost inflation is that inclusive of essentially what your view is on the impact you're seeing from the minimum wage increases for the parts that are opening back up and she was kind of think about labor costs generally moving at that direction you know.
Gary Mick: After that by potentially some efficiency initiatives that you're kind of putting in place.
Gary Mick: Yes, the 4% is a blended overall average that includes... wage rate increases, and it also includes merit increases for our full-time staff.
Speaker Change: Yes, 4% is a blended overall average which includes the wage rate increases and it also includes merit increases for full time staff.
Gary Mick: Okay, awesome. And maybe just to squeeze one last one in on the active past phase. Can you maybe just elaborate a bit on that dynamic that you mentioned about the annual past comparison, sold in 22 versus not in 23? Is that a revenue timing issue, Hedlund? Is that impacting the cadence of quarterly revenues in a meaningful way? How should we think about that as it translates into your revenue recognition?
Speaker Change: Okay, Awesome and and maybe just as Cleveland last one in on the act of past base.
Gary Mick: Can you maybe just elaborate a bit on that dynamic that you mentioned about the annual pass comparison filled in 22 versus not in 23 is that Ah revenue timing headwind that impacting the kittens quarterly revenues in a meaningful way how should we just to think about that is it translates into your revenue recognition.
Thomas L. Yeh: The annual passes, Thomas, were included in last year's deferred revenue. So, you know, they certainly contributed to the prior year's revenue stream, and they won't this year. So, you know, that helps the correlation between the active pass base and revenue for Gregory.
Gary Mick: The the annual pass as Thomas were included in last year's deferred revenue.
Thomas L. Yeh: So.
Thomas L. Yeh: Certainly contributed to prior years revenue stream and they won't this year. So that helps the correlation between octopus basin and deferred revenue.
Gary Mick: So to the extent that you're kind of seeing it flow through into other past sales. Presumably, the timing of the season pass sales makes up for some of that over the course of the year? Is that how you think about it?
Thomas L. Yeh: So to the extent that your tenants seeing it flow through into other past nails, you, presumably the timing of the season pass sales and it makes up for some of that over the course of the year cause I had to think about it.
Gary Mick: Yeah, I think that's exactly right. And, you know, I'll follow up a little bit with the 13 plus.
Speaker Change: Yeah, I I think that's that's exactly right and you know.
Speaker Change: I'll follow up a little bit with the 13 plus I.
Gary Mick: I mean, it's a lot of noise, right? It's a time-based revenue recognition as opposed to visits per pass active, where the parks open up revenue recognition. But essentially, it's nothing more than a season pass. To make up for the 13 buses, we sell more season passes. And that's how that will all balance out.
Gary Mick: I mean, it's it's a it's a lot of noise right. It's a time based revenue recognition as opposed to a visits per pass active you know where the parks open revenue recognition, but essentially it's it's nothing more than a season pass.
Gary Mick: And so.
Gary Mick: To make up for the 13 bus we sell more season.
Gary Mick: <unk> and that's that's how that will all balance out.
Thomas L. Yeh: Okay, I appreciate the color. Thank you.
Speaker Change: Okay I appreciate the color. Thank you yep.
Elizabeth Dove: The next question comes from Lizzie Dove with Goldman Sachs. Please go ahead.
Goldman Sachs: The next question comes from does he danced with Goldman Sachs. Please go ahead.
Elizabeth Dove: Hi there, good morning, thanks for taking the question. I just wanted to go back to attendance trends. I think excluding the 90,000 benefit in the first quarter, it grew by around a percent. And so I just want to kind of get a sense of what's the right exit rate to use here. You know, Mexico is a big piece. I think some of the parks opened a little earlier. Your past units are also up to double digits. So just kind of what's the right kind of underlying excluding these kinds of puts and takes rates to use going forward?
Elizabeth Dove: Hi, Thanks.
Elizabeth Dove: Thanks for taking my question.
Elizabeth Dove: Go back to attendants trends I think excluding then 90000 benefit in the first quarter and they quit around at the Sun and so I just want to kind of get a sense of what's the right exit right to use hanging at Mexico was a big piece I think some of the pox open a little Alea pass units also up to double digits I, just kind of what's the right kind of underlying excluding.
Elizabeth Dove: He's kind of puts and takes wait till he was getting folded.
Gary Mick: Great question, Lizzie. It's a complex equation, right, with many, many, many elements in it.
Speaker Change: Great question, let's.
Lizzie: It's it's a complex equation right with with many many many elements in it.
Gary Mick: I certainly think that the full year will have a meaningful lift in attendance based on what we see in our season pass sales trends, the group sales, you know, all the rides that we have coming in, you know. Exactly how that ends up is a function of many things, including weather and the economy and other things we can't control.
Lizzie: I I, certainly think that the full year has has a meaningful lift of attendance.
Gary Mick: You know based on what we see on our season best sales trends. The group sales you know all of our rights that we have coming in.
Gary Mick: Talked about with the media.
Gary Mick: Exactly how that ends up as a function of of many things, including weather and and the economy and other things we can't control.
Elizabeth Dove: That makes sense. I guess to kind of follow up, you know, James mentioned the one and a half percent headwind in 2Q with the calendar shift, but you know, you've got an important, call it, six weeks to play for with volumes going up. Do you think there's a chance that you can grow in 2Q and make up for that headwind that you've got, or is it kind of too early to say at this point?
Speaker Change: That makes sense I guess to kind of follow up.
Elizabeth Dove: 1.5% had went in to see what the calendar shift, but you know you've got unimportant call at six weeks to playful with volumes getting up back do you think there's a chance that you can grow into cue and make up for that had been that you've got a kind of too early to say at this point.
Gary Mick: It is too early to say at this point, Lindsay, but yes, there's a chance. It all depends on, you know. We have the meat of Q2, and when you take April out of the equation, 85% of our active volume is in May and June. And we're set up very well for May and June to be good, but as you know, the parks are frequently open on the weekends for the first, let's say, three weeks of May before we go into full operation. And if it rains on those weekends, that's always a challenge. But assuming normalized weather, per-cap lift is possible; yes, it is possible.
Speaker Change: It is it is too early to say at this point Lizzie, but it yes, there's a chance.
Gary Mick: It all depends on what we have the the meat of Q2 when you take April out of the equation 85 per cent of our our active volume is in the next is in May and June.
Gary Mick: And we're set up very well for May and June to be good but as you know the parks are frequently open on the weekends for the first let's say three weeks of May before we go into full operation.
Gary Mick: And if it rains on those weekends, that's always a challenge.
Gary Mick: And you know assuming normalised, whether her cap listed as possible, yes. It it is possible.
Speaker Change: Got it thank you.
Elizabeth Dove: Thank you, Lizzie. Thank you, Liz.
Gary Mick: And coolest thing Thank you Lizzy.
Selim A. Bassoul: This concludes our question and answer session. I would like to turn the conference back over to Selim Bassoul for any closing remarks.
Speaker Change: This concludes that question and answer session I would like to turn the conference back over to Celine bustle plenty closing remarks.
Selim A. Bassoul: Thank you for being with US on this conference call. This morning, I think we have lead the crown word profitable rose in 2024.
Selim A. Bassoul: for being with us on this conference call this morning. I think we have laid the groundwork for profitable growth in 2024. That's the year we're very excited about, our solid 2024 pass sales, up double digits, both in higher units and in pricing, the higher mix, I've just mentioned to Gary about the mix of diamond and platinum, the higher all-season dining and flash pass. Our group sales are now near pre-pandemic levels, 20% above last year so far.
Selim A. Bassoul: You are very excited about.
Selim A. Bassoul: Solid 2024 past sales up double digits boost in how're you doing it in in pricing the higher mixed up just mentioned me and gave you about the.
Selim A. Bassoul: Mix of Diamond and platinum the higher all season dining in flash boss.
Selim A. Bassoul: Strong in-park growth, record first quarter IPFs, 5% underlying per cap growth, new immersive experiences, glamping, a lot of rides coming up, and the best FridFest ever with brand new IP that is amazing, amazing. I think the next phase, which we kept talking about originally as part of our transformation, and premiumization has most probably helped us be where we are today, is reinventing the customer journey, engaging guests before, during, and after the park visit. And we're doing a lot of all of this through technology.
Selim A. Bassoul: Our group sales now me a pre pandemic levels 20 per cent above last year, so far strong embarked rope.
Selim A. Bassoul: First quarter Ipf's.
Selim A. Bassoul: 5% underlying.
Selim A. Bassoul: Cap growth, new immersive experiences and clamping a lot of fries coming up.
Selim A. Bassoul: And the best Fried first effort was brand new I P.
Selim A. Bassoul: Oh Amazing amazing.
Selim A. Bassoul: I think the next phase restart we kept on talking about where the julie's immunization in part of her transformation.
Selim A. Bassoul: And for immunization has most probably helped us be where we are today, but the second phase is reinventing the customer journey.
Selim A. Bassoul: Engaging guests before during and after bank visit.
Selim A. Bassoul: And we're doing a lot of all of this through technology.
Selim A. Bassoul: Nearly half of our guests now are using our SpeedyGate, a very innovative technology, our self-serve kiosk streamlining operations and expanding it into retail. We are driving IPF, seeing growth in nearly all our revenue channels. We believe we can grow attendance and per capita income this year. We have continued underlying price growth in admissions and IPF. We are raising the bar. We are focused on families appealing to all ages, thrills have no age, or No No Age. People are staying longer, as I mentioned in my example, where people at 7pm, three quarters of the people who came at 11 o'clock in the morning are still in our park.
Selim A. Bassoul: Nearly half of all get guests now are using our speedy gate it very innovative.
Selim A. Bassoul: Technology.
Selim A. Bassoul: Our self serve kiosks streamlining operation and expanding into retail.
Selim A. Bassoul: We are driving Ips seeing growth in nearly all our revenue channels.
Selim A. Bassoul: We believe we can grow attendance and put a cup this year.
Selim A. Bassoul: Wherever continued underlying price growth in admissions and Ips.
Selim A. Bassoul: We are raising the bar.
Selim A. Bassoul: We are focused on families up reading the all ages thrills.
Selim A. Bassoul: Have no H.
Selim A. Bassoul: Oh no no age people are staying longer as I mentioned in my example.
Selim A. Bassoul: When people at seven PM Street corner of the people game at 11 o'clock in the morning, I'm still in a park.
Selim A. Bassoul: Rides and attractions geared to all members. We invested a lot in our kids' area, and now we are creating our big ride. And now we are also putting water structures and slides in our water park. It took some time.
Selim A. Bassoul: Rides and attractions geared to all members we invested a lot.
Selim A. Bassoul: And our kids area and.
Selim A. Bassoul: And now we're upgrading our big rights and.
Selim A. Bassoul: And now we are also putting water structures and slides and a water park. It took some time we spend.
Selim A. Bassoul: We spent a lot of money the first two years making sure that we're providing shaded Structure, VIP Lounging, Gaming Houses, cooling system, and better restrooms. And now we are going back to what's our core, making sure that our rides and our slides are better, our new technology making it easier to do business with, our digital wallet, our Gen AI planning, our easier website to navigate. We are putting a lot of amenities in our park infrastructure.
Selim A. Bassoul: A lotta money the first two years, making sure that we are providing.
Selim A. Bassoul: Shaded structure V I'd be lounging gaming houses.
Selim A. Bassoul: Cooling system better restrooms.
Selim A. Bassoul: And now we.
Selim A. Bassoul: We are going back to what's our core making sure that all rides and out slides oughta better.
Selim A. Bassoul: Our new technology, making it easier to do business with.
Selim A. Bassoul: Our digital wallet, Oh, Jenny I planning.
Selim A. Bassoul: Egypt website to navigate.
Selim A. Bassoul: We are putting a lot of amenities and I'll Park infrastructure.
Selim A. Bassoul: And at the end, to make a memorable experience. It's all about convenience, value, ease of doing business, and premiumization and personalization of the experience. Again, making memorable experiences is very simple. We want to provide a convenient way to do business, want to provide value, want to be easy to do business with, and we need to personalize and customize the premium experience.
Selim A. Bassoul: And.
Selim A. Bassoul: To make it memorable experience, it's all about convenience.
Selim A. Bassoul: Value ease of doing business, and Premiumization and personalization of experiences.
Selim A. Bassoul: Gaming, making memorable experiences.
Selim A. Bassoul: Very simple we want to provide a convenient way to do business.
Selim A. Bassoul: Wants to provide value.
Selim A. Bassoul: I want to be easier to do business with and we need to personalize and customize premium experiences.
Selim A. Bassoul: On behalf of the Six Flags team, we appreciate your continued support. Have a great day, and we look forward to seeing you in our parks this season. Thank you. Bye-bye
Speaker Change: On behalf of the <unk>. We appreciate your continued support have a great day, and we look forward to seeing you in all parts. The system. Thank you bye bye.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change: The company has now concluded. Thank you for attending today presentation you may now disconnect.
Operator: [music].