05/11/2008

By JOHN SEEWER  / Associated Press

During his career, Cedar Fair Entertainment Co. boss Richard Kinzel has gone from managing hot dog stands on the midway at Cedar Point to now running North America's third-largest amusement park chain.

The company's chief executive officer since 1986, he oversaw the acquisition of five parks from Paramount Parks Inc. in 2006. Cedar Fair parks now include: Cedar Point, in Sandusky; Kings Island, in Cincinnati; Great America, in Santa Clara, Calif.; Canada's Wonderland, in Toronto, Canada; Kings Dominion, in Richmond, Va.; and Carowinds, in Charlotte, N.C.

Kinzel sat down with The Associated Press last week to discuss Cedar Fair's future expansion plans, roller coasters and how technology will change the way people visit amusement parks.

Q: What have you been able to incorporate from the Paramount parks into Cedar Fair?

A: We've pretty much adopted their admission system. This year, for example, we're trying to make it easier for season pass holders so they don't have to wait in line. Our goal is to have the Hotel Breakers and Camper Village at Cedar Point cashless by 2010. You'll be able to walk into the hotels and get a key that will be your credit card and you'll be able to use it in some areas of the park and in the hotel.

We're trying to make it more convenient for them to come to the park and spend money.

Q: Do you foresee any additional expansion?

A: Right now our balance sheet is really tight. We have a lot of debt. So, no, I really don't see anything. What I'd like to do is get the debt down, and in four or five years start looking to expand the company through internal growth or external growth. Or if we could do a joint venture with someone, that would be great.

Q: Would you be growing in terms of parks or hotels, maybe indoor water parks?

A: I think it would be just parks. We have one indoor water park now, Castaway Bay, but now there are water parks all around. I don't think we would invest any of our money into that. There are still some parks out there we'd be interested in looking at and growing our own parks.

If we had the money on the balance sheet, we have hotel opportunities at Kings Dominion and Carowinds and in Canada. We have plenty of land around all of those parks to make it into a resort community like Cedar Point.

Q: Was that something you had in mind when you bought the Paramount parks?

A: Yes, it really was. Plus they're in the southern region. Charlotte is a high growth area. Richmond is doing very well. We felt Santa Clara in California was an underutilized property. The one we were really surprised by was Canada's Wonderland. It's going to be a great property.

Q: Is Canada's Wonderland going to be the next big park in the chain?

A: At the end of this year, it's probably going to be Cedar Point giving us the largest attendance and Canada's Wonderland will be second. It really wouldn't surprise me if Canada's Wonderland really challenges Cedar Point this year for attendance.

Q: Will you continue to put money into the water parks?

A: Water is a cheaper alternative to rides. You have to keep putting different elements in. At Carowind's we're putting a wave pool in, but still you're talking $3.5 million. It depends on the market; you have to keep refreshing.

Q: Do you get more bang for your buck on the water parks?

A: No, the margins are much lower at the water parks. The reason for that is it's tough for people to carry money and when they get wet, they don't like to buy merchandise, they don't like to play games. It's tough to buy food with wet money. We're looking at ways of having a debit card inside the water park so people don't have to carry money.

Q: Last fall, the decision was made to remove the rides from Geauga Lake near Cleveland and operate it as only a water park this year. How tough was that decision?

A: For me, it was very difficult to do, because it was my idea, my reputation to spend $144 million to buy it. But the numbers just weren't there. It was really the right answer to close it because it was losing money. Now our plan is to have the largest water park in the state of Ohio.

Q: Are there any other parks in danger of closing?

A: No, we have great properties now. We're in great markets, and we have no plans to close any parks.

Q: Since the debut of Top Thrill Dragster at Cedar Point in 2003, there haven't been any new record-breaking coasters at Cedar Fair parks. Has there been a change in philosophy?

A: Cedar Point will always be the coaster capital of the world. We put Maverick in last year and that was a $21 million coaster. We had the first 200-foot-coaster, the first 300-foot-coaster, the first 400-foot-coaster, where do you go after that? We decided to try to appeal to the teens and the coaster group and put in a ride that is altogether different.

Going forward, I don't know if we'll go over 400 feet or not, but we'll come up with different inversions and different kinds of coasters.

Q: What's the plan for the Paramount parks?

A: In all of the Paramount parks, the emphasis was on wooden coasters, and they put in some great wooden coasters. We felt if we were going to grow those parks, we had to put some steel coasters in there to appeal to the coaster lovers and teen market.

Q: Technology is out there to build coasters over 400 feet. Does it make sense to go bigger?

A: Financially, no. The price of steel today is unbelievable. We're constantly keeping track of steel prices to see what we can put in because we're ordering these coasters three years ahead of time. We're ordering coasters now for 2010. You can go as high as you want, but from a financial point, it's hard to justify.

Q: Does that mean there will be more emphasis on family attractions instead of roller coasters?

A: No, we're always going to try and appeal to the thrill market. People like being scared in a safe environment. This year we're putting in five roller coasters, three thrill rides and 18 new shows. It's a delicate balance. You want to make sure you know what people want.

Q: How do you know what guests want?

A: We take surveys every day in all of our parks. At the end of the year, we compare all of the parks. We ask leading questions that help us in our decision making. They'll let you know if they're paying too much or if they've had a bad day.

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