Six Flags Prepares For Make Or Break Season
As Six Flags prepares for a make-or-break season, it may have budget travellers and "staycationers" on its side.
Six Flags Chief Executive Mark Shapiro said travellers are looking for value and that means he is "cautiously optimistic" about the theme park's prospects this summer.
"It's about value this summer," Shapiro told CNBC, speaking from the company's Great Adventure theme park in Jackson, N.J. That park begins its full-time operations Friday.
Shapiro expects consumers to be drawn to Six Flags' parks by promotions that have lowered ticket prices, and by consumers' desire to save money by sticking close to home, which is a trend that favors regional theme park operators such as Six Flags.
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Still, the company has been on its own financial roller coaster of late. Laden with debt, the company was delisted from the New York Stock Exchange in April, and is in the process of preparing for a debt-for-equity offering set to end late next month. If that offering is a success, Six Flags may avoid a bankruptcy filing and complete its restructuring by the end of the year.
Despite its struggles, Six Flags remains the world's largest regional theme park operator, and it is the second largest theme park operator after Walt Disney .
"We're coming off a record year," Shapiro said. "It's a healthy business. It's a strong and resilient brand. It's a business that does well in a recession time." According to Shapiro, most of Six Flags' parks have had a busy spring, but the crucial time is the summer months.
"We're selling a lot of season passes," he said. "Early on, we're seeing a lot of folks are staying pretty close to home, especially with gas prices being where they are."
One weak spot has been its Mexico City park, which was closed for eight days due to the H1N1 swine flu outbreak. Although the park has reopened, visits are down and when consumers come out to the park they are wearing masks to avoid catching the virus.
"We're even seeing a little hit in our Texas business," Shapiro said. However, he expects that to be temporary.
One factor that could bode well for Six Flags is an improved outlook for travel during the upcoming Memorial Day weekend. According to AAA survey released earlier this week, travel is expected to rise over the holiday weekend to 1.5 percent this year.
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