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Village Roadshow shares dive following theme park trading update

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Village Roadshow shares dive following theme park trading update

Village Roadshow saw a drop of almost 10 per cent in its share price this morning following the release of a trading update for its theme park operations. Village Roadshow state that the local Queensland market has reduced significantly as a result of October's incident at Dreamworld.

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So it's all Dreamworld's fault, and has nothing to do with the apparent contempt they are showing for the consumer by lacking rides and experiences worthy of a trip, and poor operations of the rides that are open resulting in long wait times?

I mean, sure - the media has absolutely hammered them on every little failure, and sure, they opened scooby doo without thematic elements to minimise wait times, but they've had numerous rides down, closed others, and not running multiple ride vehicles on rides where it is capable.

As pointed out in the article - interstate visitors numbers remain solid - likely because they were booked in advance... but when locals see whats happening, they stop going. I very much doubt the locals - those that i've seen comment on channel 7 facebook posts saying things like "leave our theme parks alone" are avoiding the park just because they think the parks may be unsafe... they're avoiding the parks (IMO) because nothing is there to bring them back!

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Not just the Gold Coast, they've blamed the Dreamworld incident for a decline In Sydney too.  I'm sure the reputation for poor value, unpredictable operating hours, being understaffed, consistent poor customer service, unfriendly policies and not opening a new attraction since the park opened has nothing to do with it.

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I'd say you could write off 2017 as a transitional year as the themeparks prepare for the Commonwealth Games in 2018. I had my holiday planned for this year 4 months ago so too late to cancel now, but had I known about all the ride closures in advance, I'd probably have made arrangements to go elsewhere this year and return in 2018, in time for the new coaster at MW, Topgolf and Tiger Island's completion. Atleast this will give me a chance to see life beyond themeparks on the Gold Coast, well this year anyway. 

Edited by Redboost

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It's actually been a bad year everywhere.  Dreamworld you can't blame them for everything being closed (or it's entirely their fault depending on how you look at it), but all the Village parks were under done.  WnW had a new attraction miss opening day, and Super 8 was closed for the busiest part of the holidays.  Movie World had it's new ride closed as well as Scooby looking like crap, as well as no extra incentive to visit during holidays (decent extended hours or entertainment offerings).  Sea World closed Viking's Revenge and left it sitting there, with along with the remains of the water park and lack of decent ride options the park is in a horrible state.

 

I'm worried about how little money Village are putting into the parks at the moment.  They're spending big dollars on other things and it's noticeable how little capital they have left for in the parks stuff.  At Movie World I don't blame them for Intamin ride not working, but Scooby looking like shit is on them.  The lack of any new entertainment option is on them.  The lacklustre parade is on them.  The lack of extended trading is on them.  Yes there have been some good things, almost all of them also at Movie World; Rick's Courtyard looks great, there's new Vynal on intencity, they put a bit of effort into upgrading some facilities, so credit where it's due, but they just seem to be firing on one cylinder at the moment 

 

 

Dreamworld were the only park park who seemed like they were trying this year.  Sadly for then it was a bit like trying to fight blindfolded with your legs tied together with a hand tied behind your back.  Full marks for trying but with the bulk of the rides closed and a public image that needs to be built from scratch it was always going to be a big ask.

 

I really hope that Village and Dreamworld can get it together for next year, when the parks are going well the Gold Coast is going well.  This is my hometown and I love the theme parks.  I'm harsh on the parks not because i don't like them, but because I really want them to succeed, and it sucks watching them stumble like they have been.

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^100% agree with you on that one @joz. And I'd say that if it wasn't for the incident at DW, with all its rides operating it could have been DWs best year yet. Especially with the returned Tiger Island and the originally planned opening date for LEGO, even without any new ideas. MW was the only one who could've taken advance of having a new ride, but having it closed (which may not have been their fault) didn't help. And then also with the issue with AA towards the end of the peak season. 

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I've said it to myself before and I will say it again.  Village is in a holding pattern and they have been caught off-guard.

I would have thought with all they bad reviews village got last Christmas period they would have rectified the problems.  Which brings me to the holding pattern.

SW doesn’t know which way to move because they are waiting on the casino.

MW cabin approval was slow.

MW is waiting on a slow-moving car park approval before they move on the hotel.

MW big thing was Doomsday and it was fenced off.

Carnival was rushed and underdone.

Gosh, thinking about it the list could go on and on.

It’s a wonder anybody turned up.

I forgot the flat beer.  Who the hell thinks it’s ok to sell flat beer.

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But in saying all that, we do have to give them some credit, despite them doing some bad things/decisions in the last 12 months.

They gave Superman Escape a much needed repaint

They brought back the Superman street character

Introduced VR to AA which is awesome.

Despite the closure of DD for 3 months, the area is themed awesomely.

They did upgrade/replace mechanics of WWF

The plaza did some what fix part of the movement through SW

New food outlets at MW

And even that it wasn't urgently needed they did upgrade the Aqua Racer 

So yes there were some bad decisions, but they did make some good ones also. But with what we know about happening this year, hopefully it will be one of the parks better years.

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It's good that Superman got repainted.  It's sad it got to the point where it was 'desperately needed' (seriously this isn't Dreamworld, management hasn't changed half a dozen times in the last few years).  I'd venture that Super 8's replacement was pretty badly needed, that's a lot of money to spend for the hell of it, and I'm glad they saw the value in rebuilding the ride exactly as it was (though rankings above the lane rather than timed results work better for me and does it still record false starts?  Oh well who cares it's still awesome they did that).

 

I'm not sure I can rate replacing the mechanics at WWF as a good decision, it's an 'exactly what you'd expect' decision.  Replacing old equipment is just part of running a theme park.  The themeing upgrade was welcomed, though last I saw once the ride reopened they kinda left the stuff that was broken.  Like the ride's open now, that's all we're doing.

 

The plaza at Sea World is good, would probably be lower on my priority list than a new ride, and if you were serious about improving the park you'd have moved midway games.  Also I'm reliably informed that the lights in the roof can be gelled for special events.  They're not LEDs, it doesn't just take the press of a button, some dude has to get up there with a boom lift to change them.  Super!

 

Superman came to the parks which is good.  How about characters from Storks?  The Lego Movie?  What about some extra villains rather than just joker and Harly Quinn?  

 

Everything else is about revenue, VR, well themed Doomsday, and new f&b outlets.  Don't get me wrong of course, all of those are good things, and everyone's best mate is clearly a driving force behind a lot of it.  But it's all based on 'what will we get a return on' not 'what will make the parks better' and I think unless they can change that culture they're going to continue to struggle.

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You do make some good points in regards to what I said @joz, and do agree with them with the explanations you've made. 

11 minutes ago, joz said:

I'd venture that Super 8's replacement was pretty badly needed, that's a lot of money to spend for the hell of it, and I'm glad they saw the value in rebuilding the ride exactly as it was (though rankings above the lane rather than timed results work better for me and does it still record false starts?  Oh well who cares it's still awesome they did that).

It shows both the time and position, and yes it does do false starts. Sister jumped to early last week and she got zero, but still displayed time. 

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8 hours ago, joz said:

Not just the Gold Coast, they've blamed the Dreamworld incident for a decline In Sydney too.  I'm sure the reputation for poor value, unpredictable operating hours, being understaffed, consistent poor customer service, unfriendly policies and not opening a new attraction since the park opened has nothing to do with it.

Looking at Wet 'n' Wild Sydney's attendance trends, I'd say that decrease is due to both DW & the general state of the park's operations.

7 hours ago, joz said:

Dreamworld you can't blame them for everything being closed (or it's entirely their fault depending on how you look at it)...

Assuming you're speaking in the present tense & responding to @Redboost, nearly everything has re-opened - just Wipeout, The Giant Drop & maybe Rocky Hollow Log Ride to go.

7 hours ago, joz said:

 Sea World closed Viking's Revenge and left it sitting there...

You can't blame them for leaving it sitting there. The decision was unexpected & like I've pointed out a couple of times, it's removal is probably going to be complex. It might require the temporary closure of at least 1 extra attraction at times - something they can't afford to do right now.

Edited by Jamberoo Fan
Added Wet 'n' Wild Sydney comments

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2 hours ago, joz said:

I'm worried about how little money Village are putting into the parks at the moment.  They're spending big dollars on other things and it's noticeable how little capital they have left for in the parks stuff.

Say what?! Village has historically and continues to spend the vast bulk of its capital expenditure on the Gold Coast theme parks.

Since FY09 Village have spent over $300m of capital expenditure on their Gold Coast parks.

In the same time period Ardent / Main Event have only spent $72m. i.e. VRL have spent 4.1x as much!

In FY16 Village spent $59.2m out of a company total of $98.9m of capex on the Gold Coast parks (the remaining capex was only that high because they rolled out a couple of new cinema sites).

In FY16 Ardent spent $9.6m out of a company total of $158.7m (!) on DW/WWW. The vast majority of expenditure went to Main Event.

Ardent / Main Event have spent tonnes of opex on the guest experience in DW/WWW this Summer because the year is already a total and utter write-off from an earnings perspective in DW/WWW due to the late October tragedy.

Following the sale of their Gym business and Marinas they have a comfortable enough financial position (almost no debt) that they can afford to subsidise the parks to help them recover from the tragedy more quickly (probably in order to sell it for a better price and become a pure exposure to the Main Event business in the US).

The evidence shows however that it is Village and not Ardent / Main Event that has historically cared about its theme park business and invested to keep it sustainable.

Ardent / Main Event has used DW/WWW as a cash cow to first fund its foray into Gyms and then more recently fund a headlong rush into rolling out the Main Event business in the US.

I know you are a big fan of Seaworld and obviously disappointed at its current low ride count but I put it to you that this is colouring your judgment.

You aren't privy to why Vikings Revenge was closed (I suspect massively elevated insurance costs on a self-built ride) or why they didn't finish the refurbishment of Scooby-Doo (I suspect an excess of caution post the DW disaster has generated more work than originally expected).

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1 hour ago, Jamberoo Fan said:

You can't blame them for leaving it sitting there. The decision was unexpected & like I've pointed out a couple of times, it's removal is probably going to be complex. It might require the temporary closure of at least 1 extra attraction at times - something they can't afford to do right now.

You let me know where you found out it was an unexpected closure, yeah? Because i'm reliably informed that it was anything but.

I do love Sea World, but leaving a heap of closed rides in and around your park, particularly when other "tricky" rides were immediately ripped out of the park previously isn't the best look in the world, particularly when one of the closed rides is one of the most visible (slide tower) and there's no information on it on the website anymore to educate guests that it's a closed ride.

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I really do hope SW do something about the water park. It's already been closed a year, and we have seen nothing at all happen. They may as well of left it open and made money from it, rather doing nothing with it. And I hope they remove Vikings Revenge this year too, even if they aren't going to install a new attraction until 2019, at least remove it, and install seating, food outlets, etc, just so it isn't empty land. They've got a large sheltered space which was the station, so surely they could fill/cover the flume part, and have seating underneath it. Will hardly cost anything, and at least make use of the space for the time being.

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Given that capex figure includes top golf and doesn't account for the fact that Village have more parks than Ardent, that figure is pretty meaningless and out of context.

 

Anyway I should clarify what my point was; What I mean is they're spending so much money on a new things right now (new coaster, Top Golf etc.) that there's no money in the pot for other stuff as it comes up which it does all the time when you're in the theme park business (new Viking's boats, higher insurance premiums for Viking's/Scooby).  My point wasn't that they don't invest in the theme park division, it's that at the moment they seem to be unable to spend the money needed to keep the parks running properly.  If the insurance premiums have gone up why isn't there money to pay them?  If the boats need replacement, why not buy more and get you through till you're ready to replace the ride properly?  Why did Mammoth Plunge close last year and why is it still there?  Are you really going to close a ride when you know there isn't the budget to replace it for 3 years and the park is already thread bare?

 

Sea World is my favorite park, so yes it is going to influence my judgment of Village when they keep making the place worse.  What of it? lol  The irony is the resort looks great.  When MW hotel I hope that they make a Hotels division and the people currently in charge of SWR run both, there's clearly some passion and drive there.  There is clearly passion in the company for MW too, but it's like Dreamworld, it's making the most of scraps.  WnW is also pretty stale right now but I feel like there's at least some drive to at least keep it where it is.

 

That's not to say DW's shit doesn't stink either.  Dreamworld's owners have been funneling money out of Dreamworld and into Main Event for a long time now.  You won't often hear me say nice things about Ardent.  I wouldn't be surprised if on the day of the Dreamworld incident no one at Ardent head office actually knew they owned the park until the media told them.  But management at a park level have really made what they have available to them count recently, and unlike Village Dreamworld hasn't had stable management, so it's not entirely the fault of the current management that the park has a lot of run down areas which need sprucing up.  But to the current regime's credit the park was looking great, and they were one big new ride away from something spectacular. 

 

I'm not as negative as today's posts from me would have you believe, but I think there are a lot of VRTP apologists on these boards right now, and I feel like someone has to be a counter point to all the 'Everything village do is amazing!' posts because while some of the stuff they do is genuinely great, some of it is at best pretty piss poor. (or should that be poor piss? #wherehavethebubblesgone?)

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It does kind of seem like the companies running Australian theme parks aren't as on the ball when it comes to being on trend or delivering the volume of thrills that US parks seem to offer by comparison. I don't know what our park attendance figures are compared to some of the larger parks over there but I would say these companies seem to know how to build a better park than Village or Ardent/Main Event. I don't want to knock them, I couldn't imagine the logistics behind running a theme park let alone remaining relevant, and I am appreciative for what we have, but sometimes it just seems like they could be so much better with only a few changes (albeit expensive ones).

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4 hours ago, Slick said:

You let me know where you found out it was an unexpected closure, yeah? Because i'm reliably informed that it was anything but.

It is the oldest theme park ride in Australia so they were probably expecting it's eventual demise for a while but this is what makes me think it was unexpected:

  1. They had a maintenance period scheduled for this year between mid-July & mid-December. (To me, this means prior to early November last year, they expected it to operate into 2017 & after late-August last year (when the 2017 maintenance period was announced), also expected a major refurbishment of the ride in mid/late-2017 for operations beyond 2017)
  2. This Facebook comment says "...the Viking Revenge was closed for its annual maintenance review and a decision was made to retire the ride". (To me, this sounds like the decision was made during it's annual maintenance review)
  3. This Facebook comment says "...after a careful consideration, a decision has been made to retire the ride..." (To me, this means they had to think about it before deciding)
  4. The above Facebook comment also says "...there are several new and exciting options in the pipeline". (To me, this means they haven't decided on the replacement attraction as of late December - which you would think they would have done before closing Viking's Revenge - though they probably expect a decision to made by the end of this year as they have announced that the announcement of the replacement attraction would occur this year: "We look forward to announcing details of this attraction in the new year")
  5. Lastly, the fact the replacement attraction is not planned to open until 2019 - 2 years away. (To me, this makes Viking's Revenge's permanent closure occurring earlier than what they wished)

If anything, I think it was unexpected until mid-way through the maintenance review last October/November where a problem was found (or the DW incident had an affect) which built a growing expectation for a permanent closure which they decided to implement in early December.

3 hours ago, joz said:

Are you really going to close a ride when you know there isn't the budget to replace it for 3 years and the park is already thread bare?

Agree with your whole post @joz but am confused about the statement above and how it fits in exactly?

2 hours ago, Cactus_Matt said:

It does kind of seem like the companies running Australian theme parks aren't as on the ball when it comes to being on trend or delivering the volume of thrills that US parks seem to offer by comparison. I don't know what our park attendance figures are compared to some of the larger parks over there but I would say these companies seem to know how to build a better park than Village or Ardent/Main Event. 

Quick comparison of annual attendance:

  • Dreamworld (2015/2016 - inclusive of Whitewater World & SkyPoint): 2,413,937 (6,614 people/day on average)
  • Magic Kingdom (2015): 20,492,000 (56,143 people/day on average)

With attendances like that, the US theme parks clearly earn more money to spend on their theme parks.

Edited by Jamberoo Fan
Added Magic Kingdom vs Ardent Leisure annual attendance comparison

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3 hours ago, joz said:

Given that capex figure includes top golf and doesn't account for the fact that Village have more parks than Ardent, that figure is pretty meaningless and out of context.

 

Anyway I should clarify what my point was; What I mean is they're spending so much money on a new things right now (new coaster, Top Golf etc.) that there's no money in the pot for other stuff as it comes up which it does all the time when you're in the theme park business (new Viking's boats, higher insurance premiums for Viking's/Scooby).  My point wasn't that they don't invest in the theme park division, it's that at the moment they seem to be unable to spend the money needed to keep the parks running properly.  If the insurance premiums have gone up why isn't there money to pay them?  If the boats need replacement, why not buy more and get you through till you're ready to replace the ride properly?  Why did Mammoth Plunge close last year and why is it still there?  Are you really going to close a ride when you know there isn't the budget to replace it for 3 years and the park is already thread bare?

 

Sea World is my favorite park, so yes it is going to influence my judgment of Village when they keep making the place worse.  What of it? lol  The irony is the resort looks great.  When MW hotel I hope that they make a Hotels division and the people currently in charge of SWR run both, there's clearly some passion and drive there.  There is clearly passion in the company for MW too, but it's like Dreamworld, it's making the most of scraps.  WnW is also pretty stale right now but I feel like there's at least some drive to at least keep it where it is.

 

That's not to say DW's shit doesn't stink either.  Dreamworld's owners have been funneling money out of Dreamworld and into Main Event for a long time now.  You won't often hear me say nice things about Ardent.  I wouldn't be surprised if on the day of the Dreamworld incident no one at Ardent head office actually knew they owned the park until the media told them.  But management at a park level have really made what they have available to them count recently, and unlike Village Dreamworld hasn't had stable management, so it's not entirely the fault of the current management that the park has a lot of run down areas which need sprucing up.  But to the current regime's credit the park was looking great, and they were one big new ride away from something spectacular. 

 

I'm not as negative as today's posts from me would have you believe, but I think there are a lot of VRTP apologists on these boards right now, and I feel like someone has to be a counter point to all the 'Everything village do is amazing!' posts because while some of the stuff they do is genuinely great, some of it is at best pretty piss poor. (or should that be poor piss? #wherehavethebubblesgone?)

That capex figure doesnt include Top Golf. That spend will be across the FY17 and FY18 years.

Even adjusting for the fact that Village is the bigger operator it has demonstrably spent more money on every metric:

capex / $ of revenue

capex / admission

capex / depreciation.

I happen to agree that SW is getting the short end of the stick particularly for ride enthusiasts. I think though part of that reflects the fact that the park is but one of a portfolio of offerings that are most commonly sold together and I suspect they have been getting better returns on incremental investment on new rides at MW.

I also think they have made some poor decisions in the past that have come back to haunt them. E.g. Getting rid of a perfectly good pirate ship!

My frustration is how enthusiasts that are supposed to be supportive of parks seem to jump at the opportunity to blame Village for every woe that befalls them. This despite the fact that they are clearly the more committed company to the industry and that the parks havent been a great investment for them for some time now with earnings peaking in FY10. i.e. 7 years ago!

By the way increased insurance premiums are an opex item not capex. It hits the earnings statement as soon as it is spent.

Moreover I doubt the increase would have been a one off. More likely than not the ongoing increased cost made the ride completely financially unviable to continue to operate. When you have incidents like this premiums can go up A LOT. Like multiple times what was previously being paid.

I dont think it is a coincidence that the log ride at DW (also a self built ride) is not on the new park map.

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26 minutes ago, Jamberoo Fan said:

Quick comparison of annual attendance:

  • Dreamworld (2015/2016 - inclusive of Whitewater World & SkyPoint): 2,413,937 (6,614 people/day on average)
  • Magic Kingdom (2015): 20,492,000 (56,143 people/day on average)

With attendances like that, the US theme parks clearly earn more money to spend on their theme parks.

I was thinking parks like Kings Dominion, Busch Gardens (Tampa or Williamsburg), and various Six Flags parks. Would never compare our parks to any Disney or Universal parks.

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