Six Flags Entertainment - Q1 2022

Transcript

Speaker 0

Good morning, ladies and gentlemen. Welcome to the Six Flags Q1 2022 Earnings Conference Call. My name is Erica, 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.

Eric. Thank you. I'll now turn the call over to Steve Purtell, Senior Vice President, Investor Relations.

Speaker 1

Eric. Good morning, and welcome to our Q1 2022 call. With me is Celine Basoul, President and CEO of Eric. We will begin the call with prepared comments and then open the call to your questions. Our comments will include forward looking statements within the meaning of the federal Eric.

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 Eric. No obligation to update or revise these statements. In addition, on the call, we will discuss non GAAP financial measures. Investors can find both a detailed Eric. Discussion of business risks and reconciliations of non GAAP financial measures to GAAP financial measures in the company's annual reports, quarterly reports and other forms filed or furnished Eric.

At this time, I will turn the call over to Selim.

Speaker 2

Good morning. Thank you for joining our call. Eric. Today, we will focus on 3 areas. First, I will provide an update on the improvements we are making in our parks.

2nd, Steve will go into more detail about our financial results and our outlook for the remainder of the year. Finally, I will return to discuss our strategy and why we are excited about our future over both the short term. Eric. Over the past few months, we have been executing quickly to improve the guest experience, focusing on our largest parts 1st and implementing the 6 objectives I highlighted on our last earnings calls. Objective number 1, Improving our ride efficiency and convenience.

While it is early, we are very pleased with our progress improving ride throughput, Which has increased our rights per guest per day, a metric that has consistently ranked as the number one determinant In my first 100 days, I was shocked to learn that nearly 30% of the seats on our coasters Are empty every time a train leaves the station because groups don't want to split up. This was clearly inefficient and exacerbated our problem with long ride wait times. To fix this issue, We have implemented single rider lanes on our busiest days, allowing guests who are willing to ride solo Eric. This has been tremendously well received by our guests As you can see on the social media, our guests have responded favorably to this change. We have also introduced Skip the line passes for one right and each right.

2, creating funds through employee friendliness. One of our biggest guest complaints last year was the understaffing of our parks. To fix this issue, This year we began our recruiting efforts earlier in the season than was customary in the past. We are pleased to report that our staffing levels Our growth is improved versus last year. The improved staffing of our parks together with our enhanced Training efforts has empowered our team members to deliver exceptional guest service.

3, improving park appearance. We have moved quickly to update the front gate experience at several of our large parks, Including entirely new entrances with a modern aesthetic. No more ticket booths from the 1980s. Our new front gate experience allow us to welcome our guests to the new and improved sick flag with a good first impression. We have also worked diligently to improve our landscaping and renovate many of our restaurants to modernize them and expand their capacity.

Finally, we have given many of our restaurants makeover by updating their equipment and enhancing their appearance. This is an area very close to my heart. 4, providing better quality food. Our new executive chef and his team have done an amazing job reimagining our menus. Eric.

They have created improved version of our top selling items such as burgers, pizza and chicken tenders. They have created new Eric. Healthier options like our Asian crunch salad and our rotisserie chicken and they have created delicious new items like our The food quality of our new menu is far superior to anything we've offered in the history of 6 Eric. And our guests have been excited about these improvements. That being said, I have been in the foodservice business for over 2 Eric.

And know that quality foodservice is all about execution and consistency. So our focus right now is to train the food service team at each of our local parks on how to deliver a new menu with speed. We plan to integrate the new menu across our parks on a rolling basis through this operating season. In addition, we are adding select premium brands in our parks like Fatburger, Starbucks, Costa Coffee and Auntie Anne's. We are also focusing on coffee and we introduced our own brand of coffee shops called Eric.

All of which will further elevate our food and beverage experience and allow Our guests to engage with familiar brands that they love. 5, offering more guest amenities. In direct response to guest feedback, we have added extra benches and shade structures throughout our parks, So guests can sit and relax and parents can experience some quiet time while their children enjoy the park. We have also added more seating capacity in our dining areas and improved the comfort of our dining table with seat cushions and overhead shade. Again, as I learned from my food service days, it's often the little details like this that go a long way toward delighting your customers.

Small details can ruin 100 percent of the experience. Another huge amenity we are working on is Eric. To upgrade our Wi Fi and cell coverage in all of our parks. Finally, objective number 6, upgrading our guest facing technology and in particular our mobile app. We have begun adding digital screens in several of our large Eric.

That displays current wait times for rides and restaurants. This will help our guests plan their activities And navigate our parks more efficiently. Guest feedback has been very positive and we plan to roll this out across all of our parks by year end. We're also working to upgrade our mobile app over the next few months to deliver a more seamless experience, Including features such as providing data for guests to help them plan their day in the park in advance. So before you get to our park, You can be planning this whole day for you, your children, your friend and your grandchildren.

2nd, we want to allow our guests to reserve their parking spots the night before and to know the walking time from one ride Improving access to the digital flash path to skip the line Without the need to go through guest services and increasing usage of our mobile food ordering system, This is a huge opportunity for us because today very few of our guests are using our mobile food ordering system And we believe there is huge opportunity there to make us more efficient and create a better guest experience through ordering food online. Eric. We are also working on an interactive digital map that will help guests seamlessly navigate the park, which we expect And we are committed to continuously adding new technologies to our parks to create a more seamless and enjoyable guest experience. Eric. I am so proud of our Park team members for how quickly they implemented these changes.

It is a true testament to the benefits of decentralization and empowering our parks. We are in the very early innings of transforming our in park experience, but the signs of an improving Guest experience are already becoming clear. And we are pleased to report that for the first time in several years, our guest satisfaction scores Are trending upwards, which is encouraging to see. Finally, we have refocused our culture to prioritize the guests in everything we do. And we fundamentally believe that by focusing all of our efforts On continuously improving the guest experience, we will drive significant and sustainable earnings growth over time.

Eric. I will now turn the call over to Steve, who will provide details about the quarter as well as the outlook for the remainder of the year. Steve, Eric. Back to you.

Speaker 1

Thank you, Shailene, and good morning, everyone. Total attendance for the quarter was 1,700,000 guests, A 25% increase from Q1 of 2021. Revenue in the quarter was up $56,000,000 or 68 percent Eric. To $138,000,000 Because of our adoption of a new fiscal calendar in 2021, there are 3 additional days in Q1 2020 1, during which we had attendance of 89,000 guests. In addition, this year, the Easter holiday, Which affects the timing of spring break in many of our markets, occurred later in April, shifting approximately 200,000 guests This increase in attendance was driven primarily by the higher number of operating days in the Q1 Total guest spending per capita increased $19 or 34% versus Q1 2021.

Admission spending per capita increased 10 Eric, and in park spending capita increased $9 or 39%. The increase in admission spending per capita compared to 2021 was driven primarily by higher realized ticket prices for both Single day tickets and the active pass base as well as by higher revenue from memberships beyond the initial 12 month commitment period. Approximately $5 of the admissions per capita gain was due to higher realized ticket prices, driven by early progress on our revenue management initiatives, including our new premium pricing strategy. The remaining $5 in admissions per capita was driven by Higher membership revenue. This is due to the fact that membership revenue was not recognized in Q1 2021 from members whose HomePark Eric.

So while the emissions per cap we reported in the Q1 2022 is representative of our normalized first quarter The year over year growth is exaggerated due to the negative impact of membership accounting on the Q1 2020 2021 admission per Eric. The increase in in park spending per capita compared to 2021 reflected our improved assortment of in park offerings, Our in park pricing initiatives and strong consumer trends. We experienced higher spending across all Cash operating and SG and A expenses versus 2021 increased by $23,000,000 or 19%, Primarily due to the fact that several of our parks were not operating in Q1 2021. Excluding the parks that were not operating in Q1 2021, our cash Operating and SG and A expenses were lower year over year in the quarter as we have eliminated fixed costs through streamlining our organization And our park operations have become more efficient. Since our park operations were impacted during the first half of twenty twenty one by pandemic related closures And capacity limitations at certain parks.

We believe it is instructed to also compare our results to 2019, Which had a similar operating calendar to 2022. Relative to 2019, our first quarter Eric. 2022 revenue increased by $10,000,000 or 8%. This increase was driven by a $15 Eric, or 54% increase in admissions per capita and a $12 or 58% increase in in park per capita. This higher spending was offset by a 22% decline in attendance and a reduction in sponsorship and international licensing revenue.

Our first quarter cash operating expenses and SG and A decreased slightly versus 2019, largely due to the optimization of seasonal labor at our parks to adjust for lower attendance levels, less dollars spent on advertising and a leaner corporate overhead structure. Adjusted EBITDA for the quarter was a loss of $16,000,000 compared to a loss of $46,000,000 in Q1 2021, Primarily due to the higher attendance in our parks, higher per capita spending and our efforts to operate more efficiently. Compared to Q1 2019, Adjusted EBITDA improved by $16,000,000 as a result of higher revenue and lower costs. Our active pass Eric. As of April 3, 202022, compared to 3 point comprised of 3,600,000 passholders, Representing a decline of 12% versus the same time last year.

This included 1,800,000 members and 1,800,000 traditional season passholders. We have discontinued selling new memberships, a topic we will discuss shortly. For that reason, going We will only report the total Active Pass Base. Deferred revenue as of April 3, 2022 was $185,000,000 Eric, down $60,000,000 or 25 percent compared to Q1 2021. The decrease is primarily due to the deferral of revenue last year from guests Benefits were extended from 2020 into 2021 due to the pandemic.

Total capital expenditures Eric. Our liquidity position as of April 3 was $712,000,000 Eric. This included $406,000,000 of available revolver capacity,

Speaker 2

Eric. Net

Speaker 1

of $21,000,000 of letters of credit and $252,000,000 of cash. We expect to use Eric. Cash from our balance sheet in July to pay down a portion of the 7% secured notes due in 2025. Over the next Eric. 12 to 18 months, we plan to further pay down debt and look to opportunistically refinance our 2024 maturities.

Eric. However, we may also engage from time to time to buy back shares opportunistically if market conditions create a dislocation in our stock price. Eric. Before I pass the call back to Selene, I would like to provide an update on our pricing strategy and current trends. We recently introduced a new season pass offering with 3 pricing tiers.

As a result, we discontinued selling new memberships. Our membership offering was made redundant by our new season pass offering, so we consolidated the 2 programs to simplify our overall product architecture. While our existing members can maintain their memberships as long as they continue making monthly payments, the new season pass program provides new passholders the opportunity For a truly premium experience at the highest tiers as well as the ability to purchase add ons and to enhance every each visit. Because we are no longer selling memberships with their monthly payment plans and we are charging higher price points for our new season passes, We expect our Active Pass base to decline over time. We continue to test our new pricing and promotional programs Eric.

With the ultimate goal of maximizing our profitability. It is still quite early in the process and most of our parks are not yet open full time. However, we are pleased with the early results. Based on our initial learnings, we have decided to lean even more heavily into pricing and Ann. Year to date, our attendance is trending down approximately 20% from the paid attendance levels achieved in 2019.

In addition, we are facing approximately $80,000,000 in cost headwinds in 2022 relative to 2019. About $40,000,000 of these headwinds are related to labor wage rates and $20,000,000 relates to our annual bonus accrual, both of which we called out Eric. The remaining $20,000,000 relates to inflation and other input costs throughout our park operations, which have accelerated over the past 2 months. While we were able to successfully offset these cost headwinds in the Q1 through cost savings programs, we expect Eric. To see some impact on our cost structure in the subsequent three quarters of the year.

Finally, we continue to Eric. Our 2022 adjusted EBITDA to be higher than our 2019 adjusted EBITDA, driven by higher per capita spending and lower attendance. This will give us a sustainable new base upon which to grow, and we expect this will help us improve our guest experience and maximize our profits over time. Eric. Overall, we are encouraged by the initial improvements we are seeing in revenue and profitability and the value creation that will come from implementing our premiumization strategy.

Eric. We feel we are well positioned to delight our guests and to reward our shareholders over the long term. Now I will pass the call back over to Selene.

Speaker 2

Eric. Thank you, Steve. On our last call, I talked about our decision to pursue a premiumization strategy, Which entails improving the guest experience and charging prices that are in line with the value we deliver our guests. For years, our primary objective was growing attendance. While yet while attendance is an important performance metric Eric.

It's only one of many different variables that impact our bottom line. Going forward, we are changing the way we think about our Eric. We will no longer prioritize any one individual metric such as attendance, per capita spending or active pass base. Instead, our primary objective will be optimizing profits. Let me repeat.

We made a conscious decision of trading off attendance for yield. We feel very good about this strategy and we are encouraged But there are many ways to achieve short term profitability and that is not our goal. Our goal is to deliver sustainable earning growth over time. And we believe the way to optimize profit in a sustainable manner is Erin. Is to continuously improving the guest experience.

So that will be our main focus. This is a transition year for our company. As a result, we are running less efficiently than we would like. However, we will learn how to operate in this new environment and make improvements that will benefit us in the future. Our new premiumization strategy is a big departure from our historical strategy of selling seasons passes at low prices In order to upsell guests from single day tickets to season passes, raising price is no easy task For a company that has trained customers for decades to expect big discounts.

And there has already been some pushback from guests who are reluctant to pay our higher prices. But we strongly believe that Eric. If we execute on our goal to dramatically improve the guest experience, over time, we will recapture a portion of our lost attendance Despite the higher prices, there will be certainly bumps along the way, but we are confident that this approach will position us Eric. To deliver higher long term profitability in a sustainable manner and to increase the value of our 6 Life brand. Eric.

Based on what I've seen in my 1st 6 months on the job, I believe Six Flags is well positioned to delight our guests And to create significant value for our shareholders. In the near term, my optimism is based on a few factors. 1st, Growing consumer demand for local out of home entertainment. U. S.

Consumers are eager to get back And we believe 6 Flags sits Eric. We're squarely in the middle of everything a consumer is looking for right now. Our venues are extremely safe. They are outdoors and provide ample room for social distancing and they offer great value for the time you in our part versus any other entertainment out there. 2nd, our guest satisfaction scores are trending upward And are now exceeding pre pandemic levels.

The elevated guest experience will allow us to sustain higher guest We have reduced our fixed costs and are diligently scaling our variable costs based on expected attendance. This will allow us to increase our EBITDA margin despite the cost headwinds that we face Over the long term, I am optimistic for several reasons. First, we have unique value propositions. Our combination of thrill rides and entertainment for the entire family provide a truly unique experience and an affordable form of entertainment that is resilient even in difficult economic periods. Eric.

I spent a lot of time visiting our parks. Over this past weekend, I was in the park for hours and I was thrilled to see the number of families And strollers. This is a fast growing segment of our strategy. As mom with kids, parents and grandparents Are known to spend more dollars in our parks with their kids and grandkids. 2nd, our parks Are located in each of the top 11 markets in the U.

S, giving us access to the most lucrative markets around the country. Several of these markets are also in some of the fastest growing regions of the country, expanding our addressable market and providing A healthy economic backdrop for our business. 3rd and most importantly, it's about our people. Eric. We have a talented and dedicated team to execute our strategy.

Since I became CEO in November, our team has really stepped up To the challenge of reinvigorating this company and together we have created a customer obsessed culture. In addition, our team exhibited tremendous resiliency during a very challenging period over the past 2 years. The strength of our people is truly why I'm confident that our future is bright. We believe we have the right strategy, The right culture and the right team to take our performance to the next level. There are many exciting opportunities ahead And I look forward to updating you on our progress as we improve the guest experience and increase our profitability.

Allow me to share a few Some recognition we have been bestowed upon recently. Late in 2021, Forbes ranked us America's best among America's best employers. In 2022 Forbes again Named us one of the best employers for diversity. Recently, USA Today Eric. Basically has an award called reader's choice and we won 10 best roller coasters of 2022.

3 of our water parks made best reader choice of USA Today in 2022. In Amusement Today, a leading trade magazine recently in 2022 gave us the Golden Ticket Awards Of best of the best. For this, I'm very proud of not only the recognition that our customers and our guests have selected us as a leader choice and the fact that we are ranked among the best companies to work for Year after year, but I'm very happy being recognized for our diversity and that our guests and our employees are stepping up Eric. As we are reimagining our company. To this, I would like to open the call for any questions.

Speaker 0

Eric. Your first question comes from the line of Steve Wieczynski with Stifel.

Speaker 3

Hey guys, good morning. Eric. Good morning, Salim. So Salim, you've been at the helm now for, let's call it, 6 months or so. And I'm wondering if Eric.

Could you put any more thought into how you're thinking about the long term EBITDA growth potential of this company? It seems like Eric. You guys are now saying that 'twenty two EBITDA should be higher than 2019 and that makes sense and that should set a baseline moving forward. But once we Eric. Trying to get that baseline all set, wondering maybe if you can help us think about how we should think about

Speaker 2

Eric. Steve, let me address that. I can think about it In several ways. I think about what is the maximum guest experience we would like to provide, Because it's a direct relationship and correlation to what the guest is willing to spend. So So I'm going to take this question a little bit more because on the mind of all of us is to say, where do you see the future?

Allow me to take a few minutes on this. One, the issue is today, if you're going to be spending an hour Waiting to get your food in any of our food outlets, you're not going to order food again. You're going to say, I didn't come Eric. Spend an hour here, 20 minutes to get into the restrooms, 45 minutes to get into the parking lot, 45 minutes to get through the entrance. It ruins everything and the spending goes down.

We believe there is at a certain level a number when we Eric. We believe there is a number that we believe is the highest optimum Now that number can vary. Today, if you think about the past few years, we've been running roughly at Eric. 30,000,000, a little bit short when you take the freebie ticket, 29,500,000 to 30,000,000 attendees It was suffocating our parks. Our guest score was down.

We believe that Eric. Short of that should be a number that will be more comfortable. And I don't have that number, but it's going to be, I believe at least 10% to 15% short of that number to create that Ultimate experience that people want to have. So as I walk the park today and you saw how quickly Our guest experience, I'm not talking only our internal. I can share it on Facebook, on Yelp, on TripAdvisor, On Google reviews, all have trended up very quickly because we have limited our attendance in our park Eric.

By raising the price of the ticket and eliminated the freebies and the discount and the all dining all seasons dining meals That brought a certain type of people on our part and clogged our part and created choking points everywhere. So I believe we We don't know yet that number exactly what it is. We're testing it. I think this year is going to tell us, but we have an optimum number where I gave you roughly a little bit where it's going to be. And we believe that our customers are willing to pay more for that experience.

So Give me most probably by a few more quarters, I will be able to tell you roughly what is our optimal attendance would like to have. Eric.

Speaker 3

Okay. That's great color Salim. And then second question would be, you mentioned in your prepared remarks, you have gotten some Eric. I'm just wondering, was that pushback Material or is the pushback coming from some of your lower yielding guests? Honestly, you're not I won't say this the wrong way, but you're not overly upset if they leave or don't come back as this is essentially part of your strategy change?

Speaker 2

So let me give you I can address that. The pushback has come back from basically 3 areas, Specifically, one, we have a big not a big, I would say a number of Guest had once a monthly plan, meaning they want to pay monthly, and we have eliminated that monthly plan. And we are rethinking about that. And we want those people to be able to enjoy that Eric. We like this type of customer.

But for whatever reason, our monthly plan, the way it was done before, which is through our membership, Eric. Had too many things attached to it, too heavy discounting, meal plans, free parking, no blackout dates, Eric. Heavy discount on retail, heavy discount on food, so we stopped it. We grandfather whoever is in it and we said we're going to stop that. But I think we need To rethink about a monthly plan that is catered to that segment of our guests that would like To continue paying monthly.

And we are rethinking about that. And I think we're putting plans together to introduce something this summer. So that will most probably take care of that of those people we lost just because they would rather pay on installments. We'll reintroduce that. That's an easy sell.

We had a lag. We'll get we'll recapture a big portion of those people. The second part of our customers are customers who like to come and eat our part at that Meal at its all seasons dining meal, which is attached with the seasons path. Eric. That dining meal was highly unprofitable, very unprofitable for us.

And it was shocking everybody else. So we had a Part of our population that I can name around 10% of our guests like the dining plan. And I can tell you the numbers. They were it was around $80 for the full year, for the full season, And it's included lunch and dinner for the full season and free drink, free meals, free snack, very, They spent to run and chalked everything. So people would come in and they can have several of those and sometimes Eric.

They will most probably abuse the system as you've seen online and it created a lot of choking point for those people coming in And regulars who came to Itau Park all day long and then ruined the experience of somebody who came in on a single day ticket with their family, who Eric. We paid a lot of money to come and paid parking and came in and now they have 45 minutes to an hour waiting to get a meal Well, those other people are chalking the line for $80 for the whole season. So that's gone. And those people are most probably Upset. I see it on the social media and I'm upset about that.

So if we want to introduce a dining plan, it has to be totally revisited. 3rd is a number of people who came on a freebie, meaning bring a friend along. And we had a lot of those. In 2019, they were over $3,000,000 free tickets. I don't want free tickets.

Free tickets people, we know data, Those people don't spend any money in our parks. They come for free. They come in. They don't even buy a bottle of water. Eric.

So from that perspective, I don't want to have them choke. And those are the 3 components of where we've seen our attendance Eric. Now we'll address one of them because I think it's fair to address the monthly plan. We'll most probably rethink whether we introduce a dining Eric. A seasoned dining plan or not or a non exclusive, but it's going to be completely changed from what people expect because I want to avoid the choking points.

So from that perspective, we are tweaking where we're going. But I will tell you Eric. The spend per guest have gone up significantly. The guest satisfaction is Fantastic. And we are reimagining the industry, not only 6 flat, because the whole industry is about attendance.

Unfortunately, Wall Street and analysts and everybody investors saying how much how many people came to your park. Eric. And I think there was a condition to create that, that need to show higher attendance. Eric. And it complicated the business.

It complicated the way our employees were delivering Eric. It complicated our accounting. It complicated our security and safety. So anecdotally, I'm going to leave you with the last note on this. Our safety incidents compared to last year are down by 80%.

I'm talking security item where people would get into argument in the parks by 80%.

Speaker 3

Okay. Thank you. That is terrific color. Really appreciate

Speaker 2

it. Thank you.

Speaker 0

Eric. Your next question comes from the line of James Hardiman with Citi.

Speaker 4

Eric. Thanks for taking my call. And I appreciate all the new color, right? This is such a new strategy. Eric.

I think a lot of us have been sort of struggling to put the pieces together. And so we thought we have a full quarter of results, Eric. Albeit sort of an incomplete time of year seasonally, but then all of the anecdotal commentary is really helpful. But I want to make Eric. Sure.

I understand at least some of what you've given us today. So if we compare first quarter results to Eric. Attendance was up more than or down, I should say, more than 20%, per cap were up more than 50%, Eric. Margins were up pretty dramatically versus 2019. I think I heard how you sort of Eric.

The shape of things to come over the course of this year is that you're going to lean into pricing even more. And so attendance might come down by even more, per caps might go up by even more, Eric. But that maybe sort of margins are going to be tougher to grow at the same rate that you did in the first Eric. But then maybe beyond this year, you get back some of that attendance and you get back some of that margin. So I guess the first question is, is that a decent summary of how you see things going in the next few quarters and then the next few years?

Speaker 2

James, I'm going to turn it over to Steve, but I'm going to add a few things. One, there is a lag, as you mentioned, between People recognizing the beautification. I'm going to talk about it. I'm going to most probably hopefully talk about beautification on one of your questions. And I'm going to tell you What you've done in verification in specific details.

And there's a lag between people who say, okay, Salim raised the price. Eric. What am I getting for? So first, I told you I will talk about the number of new rides we have coming in the parks. I'm going to talk about Eric.

All the things that we've been winning, and then I'll tell you anecdotally what I'm seeing given the fact that I am Extremely pushing on the last 5% of excellence and we'll talk to the example of that. But I'm going to turn it to Eric. Steve, back to you.

Speaker 1

Thank you, James. Eric. Thanks for the question. I just have to mention, I understand that the web link didn't work at the beginning of the call and maybe went live 10 minutes late. If you missed any portion of the first part of the call, it's available on our website where you can hear the full recording.

Eric. To go to your specific question, James, if you're looking at the way the year layout, as you said, we're going to lean more into Eric. Pricing and yield versus attendance and the per capita gain we see in Q1 is quite dramatic growth over last year. Just to remind you, dollars 5 of that growth is due to the membership accounting. So the Q1 per cap does represent what we will see going forward assuming that we have the same membership profile a year from now.

But Eric. The growth rate over last year is exaggerated. So if you take $5 off, that's probably more representative of a growth rate. Eric. Going forward, you typically do see per caps decrease from Q1 because the membership accounting impact is less pronounced Eric.

And we have water parks opening up. So while we do expect them to remain at an elevated level, not quite to the same degree. Eric. I'm looking at costs. We did call out that we have these cost headwinds.

We have taken the wage increases Over 2019, which we called out to be about $40,000,000 impact, we have the bonus and we have the other inflationary increases of another $20,000,000 Which we're going to work to offset. We were able to do that in Q1 successfully, but it's likely that we will see those impacts In the next three quarters, that would not be able to fully offset. But I think if you look at that, if you look at the attendance being down from Eric. So far this year 20% on a paid basis. That's the trend we're seeing early in the year.

We still have 85% of the attendance Eric. Left after April, but that kind of shows you how the year might shake out.

Speaker 2

James, let me now thank you, Steve. Let me come back and give you some more flare about pricing. I have to congratulate SeaWorld And Cedar Fair for how they have maintained better pricing integrity than us. So even with our new premiumization strategy, We remain around 25% to 30% below them across on average across every one of ours, whether it's single day ticket to seasons pass, We are below them. And I need to most probably get to that gap that I need to close.

So we didn't close all that gap already with our price increase. And we anticipate to close the gap maybe Somewhere in maybe this summer or maybe beginning of next year, because we have most Eric. Probably taken a huge increase on all our guests and we are a little bit coy of taking another price increase Maybe this year, maybe if we're bold, we'll do it again a second time this year. If not, for sure, Toward the end of the year, we're going to take and catch up with our competitors or our other I don't want to call them competitors Because ultimately, we don't compete in many of the markets, but against our industry peers who have done a tremendous job In getting the integrity of that pricing. So we have room in other 20% to 30% just to catch up to them.

Speaker 4

Eric. That is all really good color. And then just maybe one more follow-up here. Salim, you talked Eric. About sort of the optimal attendance.

And if I'm doing the math right, I mean, you're talking down 10% to 15% Eric. Versus the 2019 number adjusted for the free tickets, right? So if it was 30 Eric. $3,000,000 in 20.19, dollars 30,000,000 paying and then 10% to 15% lower than that. So we're in that sort of down Eric.

20% range. I guess, A, is that just making sure that math is right. But B, what does that allow you to do on the cost side? It seems with that many fewer customers, Eric. There should naturally be some meaningful cost offsets that allow you Eric.

To sort of dig into some of the cost inflation that Steve talked about.

Speaker 2

Yes. I

Speaker 1

can take that question as well. So Eric. We are definitely looking at our labor hours in the park, which is the staffing levels we can adjust based on attendance. So when we have this more manageable volume of attendance, it enables us to scale back on security because we're having less incidents in the parks. We are able to look at Restaurants, the stores that are open and also the hours that they're open because the attendance pattern is also changing with the different guest profiles.

So The parks may empty out earlier in the evening, and people may arrive at different times during the day, which has enabled us to Eric. That biggest cost we have, which is the seasonal labor and then you see the impact coming through in Q1.

Speaker 2

I think the other part I would like to talk about is literally providing a few upgrade As we upgrade our experience, I start with a couple of things. 1, let's start with beverages. Our beverage program, I'm talking beyond Coke and soda. I'm talking about alcohol. We just now I was in the park Again on Mother's Day.

And I spent 5 hours in the park with our team. The park looks fantastic. We'll talk about that. Also, I'll talk about My strolling and what my guest told me, because I recognize who I am. As I walk in the park, I've been there quite a bit.

People know me. They start knowing me as I walk with our team members and I tell them improve this and point into this and all that. They start coming at Eric. And telling me how they enjoy parks. So on Mother's Day, what was fantastic, it was a hot day.

We have just put in a fantastic new bar, fantastic. It looks fantastic. It has shade. It has fans, it has listing to it and it's opening up by Memorial Day weekend. Eric.

We are doing a lot more alcohol serving where adults can come in, let their children run around, you can get A margarita, a beer and enjoy in the shade being misted, Enjoying and sitting, which we did not do before. Well, we did not do this. I talk about coffee. Eric. We are putting coffee and pastries.

And we know that coffee and pastries is a good thing that Eric. We've seen the growth of coffee and we need to embark on a complete coffee and upgraded Hot and cold drinks that gives us a better experience. So for me, I see those are tremendous opportunities to grow. The other opportunity to grow is the ability to move people around to give them an experience where Eric. Did an impulse buy on our merchandising, impulse buy on our flash passes.

So Eric. On Sunday, there was a group of 4, 2 brothers and 2 friends. There were 4 sitting in our all star cafe. And I sat with some to ask them how did they get to experience. They had just moved from Denver.

It was their first time Eric. And they just opened an exotic car dealership to sell exotic car dealership. Eric. And they came to the park and they told me what they like at the park. They came in, Sunday is their only day and they all are partnered in that business.

Eric. 6,000 people or 20,000 people, they're going to buy a Flashpa. They bought the Flashpa. They said, Slane, I want a Flash Path. I said, how was your experience on the Flash Path?

Delightful. You will not come to your park without a Flash Path. I think Flash Path, it was easy for them. It Eric. They got the QR code.

Then they were eating, and they ordered chicken tenders and burgers. And some of them had a beer, One of them had a shake, and I asked them how was the food. They said tremendous, tremendous. They said, I love the burger. It's fresh.

Eric. The fries are exceptional. The chicken tender, they raved about the chicken tender. And those are, I think, what I call Very foodie type people. And I was very proud of what they said.

This is the type of clientele I want. They come in, they bought the Flash Pass, Eric. They came in, they ordered food on our table. They had milkshake, they had a beer, they had all of that and they ate food. And then One of them showed me his bag.

He had bought tons of our new T shirts. We have tremendous retail merchandising that Eric. Have done a great job and they were excited about that. This is the type of customers I want for friends and brothers And grandparents and mom and young family to enjoy our park and spend money. And I think we have a huge propensity to extend The money, if the experience is good.

Those people, they came and they were choked in line. I bet you, they will most probably run away. They said I'm not coming back. And I was delighted to see those type of customers coming in. And I think it's yield.

I want people to be able to spend more money. You only Spend more money in a park if your mood is good. If you're not frustrated and struggling and fighting other people and people pushing you To get their food and teenagers coming in and shoving between you and cutting lines. This is the thing we have to change And we're doing it very fast, but this is not the way Six Flags used to be, I'm sorry to say. So it might take us a few quarters to get there.

Thank you. Eric. Thank you very much. I know I'm running too long on this, but I want to give the flare.

Speaker 4

No, that's great stuff. And I think everybody appreciates the picture you're painting here. Eric. Much appreciated. Thanks guys.

Speaker 2

Thank you, James. Thank you.

Speaker 0

Your next question comes from the line of David Katz with Jefferies.

Speaker 5

Hi, good morning, everyone. Thanks for all the detail. I appreciate you taking my question.

Speaker 6

Thank you, David.

Speaker 5

Pardon me. So do you have a I'd like to just talk about margins Eric and whether there might be sort of a target notionally that you have as to where we could land, right? Because Eric. There's so much change on the one hand. There's obviously cost pressures that Stephen talked about a bit on the other.

Eric. Where should this be sustainably long term, some aspirational target? Eric.

Speaker 1

So, hey, this is Steve. We don't have a target margin, but I'd say our growth our target is to grow revenue faster than Eric. And we expect our margins to be higher than 2019. As you've seen from Q1, we were able Eric. To grow revenue faster from the cost we expected to be the case going forward.

Speaker 5

Right.

Speaker 2

I David, I don't we don't want to allude this question, but certainly for us it's still too early. We might need to indeed a couple of quarters. We know that we've given you somewhat of a Indication that our EBITDA will be higher than 2019. Give us a couple of more quarters because we are like you moving too many pieces right now. The only thing I could tell you that cap, the spending per guest is up, significantly up.

But let us see where we get. We're still Eric. Working on attendance with growth program in terms of the monthly plan that we need to institute and we need to understand also As the season goes into full swing, we want to understand some of our parks have not yet opened. So I need to get a flare of what's going to happen. What's going to happen in our water parks?

What's going to happen to because in our water parks, Let's take an example. In our order part, we just bought and it was very difficult to get 2,000 brand new lounge shares. So for me, I don't know about all of you. For me, if I'm going to go 3, 4 times a summer to a water park, I want to have a reserve seat. Eric.

I want to be able if I have my daughter who is 6 years old, I want to be able to watch her and have a seat and not fight with everybody putting their towels. Similar to a hotel, it used to drive me crazy when I go to a very expensive resort. And now I have to get up at Eric. So I can put a book or put a towel on the chair. Now if I don't put that, I don't have a chair At the pool, while I came to a resort to be on the beach, there is no chair.

So what we're doing now, we are basically saying we're going to charge for our chairs So we're going to institute a new program where we're going to basically give you the experience that you would like. You come in And you want to be there, you're going to be up trade reserve chairs, which we've never done before. You're going to come in and pay for chairs and pay for cabana. We increased our cabana. So all is moving.

Is the guests are going to accept paying for chairs? I don't know. But you're not going to be sitting in that area unless you pick up your chair. And Cabanas, We've already paid have paid Cabana, but we've increased them significantly. We're elevating the experience on our order front.

But All this is dynamic activities and pricing that we are testing things that's never been tested. We've never charged for chairs In our season pass can come in and done, you can put somebody can put 10 towels and never use the chair, Eric. But then we had rules, we can't take the towels away and it created a lot of issues in our part. Today, We're putting chairs and you're going to be paying for those as reserve. You deserve them in advance.

So allow us a few more quarters To be able to give you a much better idea of where we are. But everything we're trying to do is monetize in a fair way in the way you and me And our family expect to go to our water park, for example. And we'll have attendant coming to. So we're changing our POS system, so I can go to you. You're sitting in your chair watching your children enjoying the park in your own chair and then I I'm going to have an attendant come and say how can I serve you with a new POS system that's being launched in the next months?

So I can take orders while you're sitting in your chair comfortably and we're renting umbrellas, umbrellas for rent. So it's new for us. It's all dynamic. I'm sorry, I'm not being able to give you specific numbers, but it's all been done in the last. Believe me, I've been here 6 months and we're changing almost Every paradigm shift we're doing in this company.

Speaker 5

Understood. Is there Eric. It is you do take the unusual step of referencing a couple of your other competitors in the marketplace. Is there Eric. Some reference you might be willing to make with respect to where their profitability might be.

Eric. Is that maybe an aspirational level we could talk about? And I frankly, I wanted to sneak in one other detailed question, which is I know you've talked about the satisfaction scores. Have you given us a relative progress as to how much they have gone up?

Speaker 2

We have not, but I don't know if

Speaker 1

Eric. I think no, I don't think we should comment on our peers with their profitability. I think we Eric. I expect to be growing our margins over time. When you look at our guest satisfaction scores, I could tell you that they are above pre pandemic Eric.

We have a scale from 1 to 10 that we have inside our parks where we've been doing the same surveys year after year. So we have a very consistent baseline to look at. Eric. So that's very encouraging. But we're also managing to look at the social media and all the different sites and looking at the sentiment and we have seen Eric.

The positive sentiment grow each month since January. And in fact, the positive sentiment has Eric. Over 90% in April when you look at the positive versus negative comments. So and that's

Speaker 2

Eric. So we can use Facebook for example. In December 2021, Eric. It was 73% positive, 27% negative. Today in March 2022, it's 91% positive, 9% negative.

A huge change just in Facebook, 18% improvement just in the few months. And in by March, we were not yet Fully implemented with all the changes. So I can give you that. I can tell you also on Twitter. Twitter was 59% in December, positive, 41% negative.

We are now 87% positive, 13% negative.

Speaker 5

That's great. Thank you so much.

Speaker 0

Eric. Your next question comes from the line of Ian Zaffino with Oppenheimer.

Speaker 7

Hi, great. Just very quickly, I just wanted to kind of key in on some of the food. You talked about the empanadas and the beignets. Eric. How are we going to be thinking about the food business?

Is this going to be increased take rate? Eric. Is it going to be increased price? I mean, it's probably going to be both. But how do we think about that as far as take rate versus price?

And Eric. Any other kind of color there as you kind of premiumize the food offering? Thanks.

Speaker 2

I think about our value. At the end, everybody understand value. Value comes with very simple things. At the end, we still offer Eric. Mostly our business is fair food.

I think you're not still people go to a park, they don't expect a filet mignon, okay? They expect Eric. A very decent burger, a good hotdog, a good chicken tender, a good pizza. Eric. Those are most probably remain our major components of what people want to eat.

Because it's fast, it's finger food, They can get back on the rides and enjoy the rides and go to the park. So the components of food is going to be the following. Of course, when you go to a ballpark or you go to a game or you go food is not cheap. We are trying to create value. Eric.

Value comes in many ways. Value comes we will never be able to offer a $2 Hot dogs the way Costco does it. I wished I could. We're not set up infrastructure and cost wise to do that. And people don't Expect that coming to our parks or any parks or any ballpark for that reason.

But they expect Eric. If you're going to comment that, it should be consistently good hotdog. It should be fast. It should be hot. It should be all beef and very Eric.

We expect our pizza, if I'm going to give you a pizza, it has to be Eric. A very good sized pizza, real cheese and the best tomato sauce you're going to get. People understand value. Eric. [SPEAKER ANDRE DE CHALENDAR:] And it has to be fresh.

And from us, I know that people will buy Eric. Good food if it has value. And I've seen that happen in the chain business. In the chain business, you still have Eric. What I call the quick serve, the McDonald's, the Burger King offering, a decent burger.

But look the growth what happened of 5 Guys, Eric. Shake Shack, In N Out Burger, Hub Daddy, I can name many burger chains that have gone up. Fatburger, Johnny Rockets, Eric. All come up and been able to price a lot more than what a regular burger and people paid it. Even though it's not a gourmet burger, but the value was there to offer a burger that cost $7, $8 I think we are talking the same approach to elevate the game.

Now the other approach is alcohol. Eric. The other part is coffee and beverages. Desserts is part of our business that gives people it's hot in the summer. I want to have more ice cream and we have not optimized the ice cream.

People love ice creams. The other thing we need to do is put carts. We don't have we don't go to you. You are in line or you're stalling. I don't have those standing location because we did not have the POS system, The handheld device that allowed us to take orders.

So we're putting all that technology, so I can go to you. So if you are sitting in a line in a ride, I can come through you and while you're sticking, you can get a stick of an ice cream. But today, I could not do it. We are constrained by our technology to be able to go through the part with POS system and labor and carton. And now we're putting that together.

So I'm putting a lot of technology in our food to create that value.

Speaker 7

All right, great. Eric. Thank you very

Speaker 1

much for the color. Thank you.

Speaker 0

Your next question comes from the line of Chris Woronka with Deutsche Bank.

Speaker 3

Hey, good morning guys. Appreciate all the details and color so far. Eric. 1st quarter, really impressive per cap spend, understand the attendance strategy, the pricing strategy. Question is, Eric.

As you get into peak summer and you open all the parks and 1Q maybe skews a little bit to the Sunbelt, right? Eric. Do you think the strategy is there any way to get any kind of early indication whether the strategy of pricing resonates with some of the parks in the Eric. More markets where maybe population growth has changed a little bit and general demographics are maybe a little bit less

Speaker 2

Eric. I think that a premiumization strategy works everywhere. So Let's talk about literally what drives our business. What drives our business is our top 6 to 7 parks. Those 6, 7 parks have already been out and open and we're seeing the premiumization working.

Now when you talk about a smaller part, you might be right. Eric. We might have to do a little bit more dynamic pricing, but then we can offset it by a lot of cost down. But think of our business, 70% to 8% of our business is run by our biggest parks. And so far, we have been seeing the premiumization work in our biggest park.

Eric. Now there might be 1 or 2 parts where we're not going to be able to get to where we are exactly, but that's less of a concern because they are not as big of a driver. But Eric. I think premiumization will work everywhere, maybe not to the same extent as it could work in Los Angeles or in New Jersey Create the brand and the willingness to come there. That we're committed to strategy.

So I think one thing we should not be doing is suddenly Eric. Stop short after a couple of quarters and start discounting again. So we're not going to do that. We're going to continue Eric. We are a premium brand.

We act like a premium brand, and we're going to continue across all our parts to do that. There might be some dynamic pricing, Everything is going to go up and the value is going to go up and we're investing in the small part the same way we're investing in the big part. We're doing the verification, all our smaller parts. We're doing All the work we're doing in our water parks across the board, we're doing the all that Restroom and restaurant upgrade and food upgrade on our parts. So I think we're going to see people willing to pay

Speaker 3

Eric. Okay. Very helpful. Thanks, Salim. And I guess, if we just Eric.

Look at 1 Q1 and again that's really not the full extent. But when we think about per caps Eric. Is there any way to break that down between what was pricing on menu items or retail and what was just kind of transaction count?

Speaker 1

Eric. Chris, I could take that. It was mainly pricing, revenue management initiatives in the parks. Eric. The one caveat I'd say is we did introduce the one day Flash Pass with the QR codes.

So that was a new product offering, Which enhanced our revenue, but by and large, the other items are pricing and premiumization of our offerings.

Speaker 6

Eric. Okay.

Speaker 3

Very helpful. Thanks guys.

Speaker 2

Thank you.

Speaker 0

Your next question comes from the line of Barton Crockett with Rosenblatt Securities.

Speaker 8

Okay. Thanks for taking the question. I guess One thing that I wanted to get your opinion on the your stocks and the stocks in the sector are really trading like There's one or maybe all of three things coming at you. First would be that there's some type of COVID pull forward that's unsustainable either in the The amount of money that people are spending in parks or the number of people coming to parks. 2, that maybe there's some type of recession coming.

And 3, that maybe there's some type of COVID wave coming back that could affect attendance. I was wondering if you could talk Eric. Talk about your perspective on that. Do you see anything that would lend any substance to that or not?

Speaker 1

Hey, Barton, it's Steve. So I think if you're thinking about fears of recession, our industry, the regional theme park industry Eric. I think if you look at the 'eight, 'nine time frame, our attendance went down only 6%. And if you look at What people are tending to cut back on in that type of environment would be vacations, air travel, hotels and we're really a regional destination that people drive to. So The people don't go on their vacations, you do have that trade down effect because they still want to do things with their kids in the summer.

And if you look at what we've seen in our Eric. As far as in park spending being up as much as it is, there's really no indication that people are feeling the pinch from the recession. Eric. I think the all of the stimulus money and those types of things have kind of drawn their course. I don't see that we're seeing The pent up demand that might be a concern that will go away because a lot of our parks have already been open for the past year, only in some markets that we Kind of open weren't open this time last year.

So I do think we feel really good about the way we're set up for basically any scenario that may happen this summer. Eric.

Speaker 8

What about COVID? I mean, is that the cases are up. Does that have any impact in some markets in California that happened sensitive to that in the past?

Speaker 2

Eric. I think that Go ahead, sir. Go ahead.

Speaker 1

I said, I think that we're learning to live with the virus and that If you look at the case counts up, you see the severity is quite low and I think people are just learning how to live Eric. Within that environment and they're still going out and you do see people wanting to have experiences. They're coming off of COVID where they're kind of Eric. I'm going to turn their focus to buying goods for their homes, but now you see kind of a reversal that and people wanting to get

Speaker 2

Eric. I think the combination, if that's the case, I have no data on that. I'm just part Eric. I'm saying it from a different perspective. If you look at 2 things, trends this summer that I believe Eric.

We haven't seen it yet. So it's not something it's just anecdotally from me. If you believe gas prices have gone up and you're worried about COVID, You're not going to be on a plane because masks are off. You're not going to be we are in a perfect environment to be outdoor and calm. And again, Eric.

A type of entertainment, spend 8 hours in our park for what you spend. Per hour, we are among the cheapest entertainment You will get out there and people are going to go out and I think they're going to go to outdoors. So I believe if that's the case, We should be benefiting a lot from people coming to the parks just because if you don't want to drive because of gasoline prices and airfare have gone through the roof And airlines have cut back a lot of flights and driving more demand to fewer flights And more money. I would say we have a big chance this summer to reap a lot of benefits. Just We haven't seen it.

I mean, I don't want to say there is data predicting that, but I believe that if I have to bet, we should be seeing an uptick Given those two trends, outdoor, if COVID comes back We're outdoor and gasoline prices and airfare tickets and not traveling. They said let's come spend a day in the park.

Speaker 8

Eric. Okay. That's helpful. And then just separately, just curious, was weather Notable as an impact, positive or negative in the quarter.

Speaker 1

Hey Barton, we always have weather. So, it's Never perfect the way we'd like it to be, so we don't really call out the weather impacts.

Speaker 8

Okay. All right. Thanks guys.

Speaker 2

Eric. Thank you.

Speaker 0

Your next question comes from the line of Paul Golding with Macquarie Capital.

Speaker 3

Thanks so much and thanks so much for the color. I was wondering if you could remind us a bit about what the new yield opportunities will be through the Eric. You mentioned QR code for taking orders and we've heard about mobile food ordering Eric. Just wondering if you could highlight what new e commerce opportunities might be as you enhance the app? And Eric.

Speaker 2

So let's start first with breakdown what monetizing opportunities are. Parking, we're now we put in a lot of preferred parking that before we We used to give parking for free across our system. Parking has become a coveted Eric. So we have preferred parking. So parking is a new item for us that becomes a driver.

Flash passes and signals, rider lane with a QR code is another area for us of monetization, Eric. Other than tickets and admissions and seasons passes, CERD Food becomes our 3rd monetization as we introduce more menu items, Better menu items and we've raised prices. Number 4 is retail. Our retail stores are beautiful. Our retail merchandise, I have to give credit and commend our procurement for our retail.

The merchandise looks superb. So from that perspective, those are truly the areas I see beyond admission that we're focusing on. And I think We're hitting on 4 areas that would be a good driver for us.

Speaker 3

Eric. Right. In terms of any costs you may be incurring as part of this, the transformation, I was wondering if there was anything meaningful in the cost As you deploy and settle on some of these enhancements. Thank you.

Speaker 2

So part of it is CapEx, part of it is OpEx. So in terms of OpEx, okay, our biggest headwind is truly inflation and wages. Those are most probably the one that Steve talked about. In terms of a few items, as you know, we are rolling out ERP system. We are trying to make sure that it's rolled out correctly.

We are putting all new POS system in all our parks And our ability to hold handheld devices, we're in the process of putting sensors through our parks so we can do real time. We just installed all those Digital, unique digital screens, outdoor screen that gives you real time In our park on Rides and Restaurants, we're rolling that up. But I think a lot of it is CapEx that we've already incurred and Eric. I'm going to continue to incur some of the OpEx. So I don't see much major thing in 2022 that will Most probably be surprised beyond the headwind of inflation, straight inflation on buying ketchup cups, Water, Mayo, you talked about that.

So we have food costs and waste Utilities, utilities have been up and wages. I think there's nothing else that we have not expressed in this and we have Eric. I think Steve gave those numbers and what to say

Speaker 8

be. Great. Thank you.

Speaker 2

Thank you.

Speaker 0

Eric. Your next question comes from the line of Ben Shenken with Credit Suisse.

Speaker 4

Hey, how's it going? Hi, Ben. Hey, on the cost side, you

Speaker 6

listed kind of 3 areas of optimization in the quarter, I think seasonal labor, advertising and then leaner corporate overhead. Eric. And then you also called out the $80,000,000 of headwinds that you feel in 2022 versus 2019. I guess conceptually, Why would it make sense that you could offset those in 1Q, but not for the remainder of the year? I guess, it's just a very large range of outcomes.

So if you could help us like

Speaker 3

Eric.

Speaker 1

Hey, Ben, it's Steve. Well, I guess if you look at Q1, that's our seasonally Eric. Smallest quarter, so the overall costs there's only 5 parts that are open for the whole quarter. As you go into the year and All of our parks are open. The amount of parks with the wages become a bigger component of our overall cost base.

So the fixed cost Eric. Changes we made will be less pronounced. We also don't spend that much on advertising that type of thing in Q1. So Eric. I think it's just we're looking ahead and saying that as our volume of cost of goods go up and our labor hours go up Eric.

That we could have it should be more difficult to offset all of those inflationary increases.

Speaker 6

Eric. Okay. That's helpful. And then on the price side, I think, Celine, you mentioned if I heard you correctly, potentially taking another price hike Eric. This year, can you just kind of dive into the data points you're looking at that make you comfortable doing that, either whether they're internally with your Eric.

And kind of the elasticity or external, I think you maybe mentioned potentially what peers are doing, but would love to explore that. Thanks.

Speaker 2

Eric. I think, honestly, there's room to grow to our pricing. The question is Eric. When do we do it again in one thing helping us is all our customer and guests understand that inflation is everywhere. Do we do it again.

Remember, we've done a for Six Flags is a significant change And for our guests in the pricing, while we're still below our competitor our other industry players, not competitors, industry players, For our guests, it's a big leap of what we've done. The question is, Eric. Do we go ahead in the midst of inflation for our guests from gasoline prices going up, Everything going up in there. I'm hurting the discretionary income to take another pricing. So it's just a decision of when.

We're going to do it, but we don't know when. So So the question is, we're thinking saying, should we go through the year, let people enjoy the beautification, Let's talk about that. I wanted to talk about that and give me a panoprene band to talk about that. France is a section in the park In Dallas, that's beautiful. And there are many of them around all our parks.

They are different names to them, but they've been underinvested, not taken It has a makeup old fort, French fort, and there was nothing there. So what we've done, we've Put in a lot of flowers, we put in those French flags, we reinvigorated the fort, we went and put cannons on top of the fort And then we ended up putting flowers, benches and French music and we're opening up now a French Pastry, shop, French latte and beignets. I was there on Sunday and people were sitting enjoying this Significantly, the question is and I enjoyed it. I sat there with them and talked to many of the guests sitting in France and they said, Salim, thank you for bringing it back. This is fantastic for us.

So the question is, should we Today, again, go take a price increase, which we can. We can. We're facing inflationary pressure like everybody else. Or should we let people enjoy All of those and say, now I'm willing to come back and do that. So it's what do we do first?

We've done it first without beautification. Eric. So with this price is about beautification, now we're letting people enjoy. I am more leaning toward doing it more in Most probably sometime in later summer to take prices, if you're asking me. Maybe it's a long way to answer the question, But I'm giving you what's going on in my mind and the mind of our senior leadership team and our Park President is to say, Opportunistically, we can.

There is dynamic prices we can take day to day. But our biggest opportunity now and then is to focus on our operating hours, our efficiency, our seasonal labor. And then pricing will occur again this year, But the timing, I'm we're leaning toward more later in the year. Just to let you enjoy what we've done.

Speaker 6

Eric. That's super helpful. One last one that might be helpful. I don't know if you guys have the data at your fingertips, but there's kind of 2 things going on. 1 is a Eric.

Channel mix shift, you mentioned not those 3,000,000 freebies in the park in 2019, the other is kind of a like for like Increase in ticket pricing. If we look versus 2019, how much of the per cap uplift and whatever data you have, whether that's total spending or admissions, but how much of that is kind of mix from removing different channels and how much of that is pricing growth taken on a customer, if that makes sense?

Speaker 1

Eric. The growth we see is all from pricing. The channel hasn't changed that much. I'd say the park mix, the mix between single day tickets and Susan Passholders, has that changed? I mean, it's purely pricing that you're seeing.

Speaker 6

If you had 3,000,000 freebies, I mean, isn't that almost a 1,000 basis points price right there on the per cap if you take out 3,000,000 people who weren't paying? Eric.

Speaker 1

When I was talking about price, I was talking about the price of the ticket itself, not the yield. Yes. Yes, you're right. If you have a free ticket, that brings down your average

Speaker 6

Eric. Right. So of the mix, the people that you don't okay, maybe we can catch up offline. I appreciate it. Thank you very much.

Speaker 2

Thank you, Ben. Eric.

Speaker 0

And there are no further questions in queue at this time. I'll turn the call back over to management for closing remarks.

Speaker 2

So I want to thank everybody for the time and the questions and the engagement with us. Thank you very much. I want to thank you for your continued support. And I remain Eric. Very pleased that Six Light is uniquely positioned to create fun and thrilling memories for all.

Take care Eric. And we hope to see you at our park this summer and we hope to have an Investor Day sometime in the next few quarters to show you all what you've Eric. And again, thank you for all. Have a blessed day. Bye bye.

Speaker 0

Eric. This concludes today's conference call. Thank you for participating. You may now disconnect.