You Have To Spend Money To Make Money
The saying “You have to spend money to make money” has been shown to be true over and over again in the amusement park industry. A common question that is posed by both analysts, fans, financial advisors and shareholders is what new ride is coming next to the parks. Fans are excited to experience brand new rides and attractions while analysts, financial advisors and shareholders are worried about how much companies are spending on capital expenditures (capex) every year. Unlike companies in some industries, it’s impossible for an amusement park or theme park to be able to thrive without continued reinvestment. Some companies in other industries, for example In-N-Out, can continue to grow for years without changing their offerings, but that strategy simply doesn’t work in the amusement industry where guests need new motivations to turn off Netflix and head to the park. Let’s take a look at how much the two leading regional amusement park chains, Cedar Fair and Six Flags, have been spending annually.