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7-17-1995

Strategic Plan for Fiesta 1995 to 2000

Harrison Price Company

International Theme Park Services

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Recommended Citation Harrison Price Company and International Theme Park Services, "Strategic Plan for Fiesta Texas 1995 to 2000" (1995). Harrison "Buzz" Price Papers. 162. https://stars.library.ucf.edu/buzzprice/162 Confidential

STRATEGIC PLAN FOR FIESTA TEXAS 1995 TO 2000

Prepared for

Fiesta Texas Theme Park July 17, 1995

Prepared by

HARRISON PRICE COMPANY 222 West 6th Street, Suite 1000 San Pedro, California 90731 Phone (310) 521-1300 • FAX (310) 521-1305

In Collaboration With INTERNATIONAL THEME PARK SERVICES 1212 Sycamore Street Cincinnati, Ohio 45210 (513) 381-6131 Confidential

STRATEGIC PLAN FOR FIESTA TEXAS 1995 TO 2000

Prepared for

Fiesta Texas Theme Park July 17, 1995

Prepared by

HARRISON PRICE COMPANY 222 West 6th Street, Suite 1000 San Pedro, California 90731 Phone (310) 521-1300 • FAX (310) 521-1305

In Collaboration With INTERNATIONAL THEME PARK SERVICES 1212 Sycamore Street Cincinnati, Ohio 45210 (513) 381-6131 TABLE OF CONTENTS

Section Page

1 INTRODUCTION ...... 1-1

2 THE MARKET ...... 2-1

PARK ATTENDANCE ...... 2-1

MARKET PENETRATION ...... 2-2

FIESTA TEXAS ATTENDANCE DISTRIBUTION BY SOURCE ...... 2-5 Season ...... 2-8 Attendance by Product Categories ...... 2-8

3 CAPACITY CHARACTERISTICS ...... 3-1

Existing Ride and Waterpark Capacity ...... 3-2 Show Capacity ...... 3-5 Food Service ...... 3-6 Merchandise Service ...... 3-7 Aggregate Capacity ...... 3-7

4 PER CAPITA ANALYSIS ...... 4-1

Analysis of Free Attendance ...... 4-4

5 PROFITABILITY ...... 5-1

Cost of Goods Sold ...... 5-1 Profit and Loss Experience ...... 5-1 Expense Analysis ...... 5-3 Catering and Christmas Profitability ...... 5-6

6 STRENGTHS AND WEAKNESSES ...... B-1

Preferred Alternative and Recommended Action ...... 6-2

7 FIVE YEAR ECONOMIC PROJECTIONS FOR THE RECOMMENDED ALTERNATIVES ...... 7-1

Reduced Scale Alternative ...... ? -5 LIST OF TABLES

Table Page

1 An Array of Typical Regional Park Market Penetration ...... 2-4

2 Attendance Distribution by Source ...... 2-6

3 Estimated Ranked Resident and Visitor Splits in Various Parks ...... 2-7

4 Hourly Ride Capacity ...... 3-3

5 Aggregate Hourly and Daily Venue Capacity ...... 3-8

6 Admissions Per Capita Analysis by Ticket Types ...... 4-3

7 Analysis of Free Categories ...... 4-5

8 Profit and Loss Experience ...... S-2

9 A Labor Cost Comparison For Long and Short Season Parks ...... S-4

1 0 Expense Analysis 1995 Budget ...... 5-5

11 Catering and Christmas Profitability ...... 5-7

12 Throughput Parameters Five Year Projection ...... 7-2

13 Per Capita Projection ($) ...... ? -3

14 Improved Profitability Projection ...... ? -4 Section 1

INTRODUCTION

Fiesta Texas is at a turning point. A high quality product in a divided market, it suffers from:

• excessive price discounting • declining attendance • operating losses throughout its life • negative cash flow • diversion of a one park market by two operating parks.

As a reflection of these problems, $71.1 million of the $210 total development cost was written down in 1994. The project requires additional reinvestment to hold and/or gain market share.

In early June, Fiesta Texas management met with Harrison Price (Harrison Price Company - HPC) and Dennis Spiegel (International Theme Park Services - ITPS) to discuss redevelopment and strategic options with the aim of identifying and defining problems facing the organization. Out of that meeting the writing of a preliminary summary strategic business plan was authorized. It would attempt to express where the park is in its marketplace, and what might be done to improve its economic performance. Management has requested that three alternative options be addressed and evaluated in the course of the work:

1. reducing costs (expenses plus cost of goods sold) from $53 million to approximately $40 million 2. infusing new capital additions 3. operating as is with modest capital additions.

1-1 The objective of this short form business strategy is to identify and evaluate the following forces and conditions influencing the performance of the park:

1. the market outlook 2. capacity and balance within the park 3. generated per capita expenditures 4. departmental and overall profitability 5. strengths and weaknesses of the park 6. the market niche of the offered product.

As a final step, at the conclusion of this operational and economic review, a five year strategy is presented which is considered to represent the best option or options for ownership. Projected economic results of that strategy are presented over the five year period 1995- 2000.

This report is a joint undertaking by Harrison Price Company and International Theme Park Services.

1-2 Section 2

THE MARKET

San Antonio's resident and tourist markets are growing fairly rapidly. HPC's projection of that growth--based on a substantial amount of recent work in the area--is expressed as follows (in millions):

Regional ADI Annual Overnight Y.H! Resident Market Visitor Market Total

1990 1.736 7.150 8.886 1992 1.837 7.227 9.064 1993 1.874 7.370 9.244 1994 1.911 7.569 9.480 1995 1.949 7.860 9.809 2000 2.151 9.192 11.343

The decade annual growth rate of the total market is a compounded 2.5 percent. The rate in the first five years of the decade was 2.0 percent. The local market will be negatively impacted in the short run by the closure of Kelly Air Force Base, however, 's acceptance as a major destination resort is gaining momentum and will continue. Spurred by the local closure, public sector leadership plans to encourage and stimulate long term touristic development.

PARK ATTENDANCE

Theme park attendance in San Antonio is reported as follows (in millions):

2-1 Actual Reported Ynr Fiesta Texas Total

1990 1.682 1.682 1992 1.982 1.500 3.482 1993 1.884 1.400 3.284 1994 1.908 1.400 3.308 1995 1.701 1.400 3.101

Noted from above:

• appreciable attendance decline since 1992, 14.2 percent for Fiesta Texas, 6. 7 percent for Sea World of Texas.

• The combined attendance has dropped 10.9 percent. This is atypical of the business. The 48 largest parks in the U.S. reported attendance of 143 million in 1992, 146 million in 1994.

• One major reason for the two drops is that in both parks early attendances were inflated by "papering" and discounting. The objective in both cases was to achieve unrealistic initial goals (3 million at Sea World, well over 2 million at Fiesta Texas). Sea World by itself was overbuilt for the 1988 market. The combination of two parks in 1992 compounded the problem. Excessive discounting which resulted eventually becomes counter productive. Also, the recession didn't help.

MARKET PENETRATION

Individual park and combined market penetrations are declining:

2-2 Market Penetration (%} Y.nr Fiesta Texas Sea World Total

1990 18.9 ' 18.9 1992 21.9 16.5 38.4 1993 20.4 15.1 35.5 1994 20.1 14.8 34.9 1995 (projected) 17.3 14.2 31.5

That 31.5 percent combined effort compares to 49 percent for two parks in Richmond (, Busch Williamsburg), 33 percent for two parks serving Pittsburgh (, Hershey). Successfully split or divided markets are very rare in the regional park business except in Central Florida and Southern California.

As a basis of comparison, typical individual park market penetrations are shown in Table 1. Opryland and Fiesta Texas lead the list.

If Fiesta Texas and Sea World of Texas could or would stop heavy discounting improved per capita results would likely result. With substantial reinvestment in both parks, penetration would rise. A combined penetration of 35 percent would generate the following attendances:

Combined Sea World and Fiesta Texas Atten­ Market Size dances for a Penetration (millions} Rate of 35 Percent

1998 10.703 3,746 1999 11.018 3,856 2000 11.343 3,970

2-3 Table 1

AN ARRAY OF TYPICAL REGIONAL PARK MARKET PENETRATIONS 1994

Total Market Atten- Total Pene- dance Market tration ~ Park (000) (000) (percent)

Nashville, TN Opryland 2,000 8,409 23.8

San Antonio, TX Fiesta Texas 1,908 9,480 20.1

Houston, TX Six Astroworld 2,400 13,100 18.3

Dallas, TX Texas 3,000 16,876 17.8

Kansas City, MO 1,228 7,100 17.3

St. Louis, MO Six Flags Mid-America 1,850 10,748 17.2

Atlanta, GA Six Flags Georgia 2,600 15,490 16.8

San Antonio, TX Sea World of Texas 1,400 9,480 14.8

Pittsburgh, PA Kennywood 1,200 9,100 13.2

Guemey, IL . 2,900 22,604 12.8

Santa Clara, CA Six Flags Great Adventure 2,500 22,922 10.9

Minneapolis, MN Valley 1,000 11 '100 9.0

2-4 FIESTA TEXAS ATTENDANCE DISTRIBUTION BY SOURCE

Table 2 shows resident and visitor attendance by area of origin (1992, 1993, and 1994) by number and percent. Conclusions from this data:

• Fiesta Texas is a resident park and getting more so (63 percent of attendance in 1992 rising to 67.7 percent in 1994).

• Rest of Texas is dwindling (25.1 percent of attendance in 1992 dropping to 19.6 percent in 1994).

• At this stage in its life, Fiesta Texas is not a destination resort park serving tourists; other U.S. and together generated only 11.9 percent of attendance in 1992, 12.7 percent in 1994.

• The Jovanovich dream of standing equal to Orlando was overstated and 15 to 20 years ahead of its time. Nevertheless, that idea will likely be vindicated over time as San Antonio evolves to its full potential as a resort destination. Furthermore, overbuilding in anticipation of growth is often a viable strategy if affordable in the short run. Building ahead of the market was a trademark of the Disney organization in Florida and California.

A further basis for evaluating the Fiesta Texas resident/visitor attendance split is shown in Table 3 which shows:

• Fiesta Texas is dominantly a resident attraction.

• The resident market penetration in 1994 was 1 ,292K + 1,911 K or a high 67.6 percent. The local crowd has been saturated by discounting ( gets only 38 percent of its resident market). Popularity of the attraction with locals is evident from the data in Table 3.

2-5 Table 2

ATTENDANCE DISTRIBUTION BY SOURCE

Attendance SQurces (QOO) 1992 1993 1994

San Antonio 993 1,072 1,064 Austin 128 84 123

0-99 Miles 1 '121 1,156 1,187

100-199 Miles 128 93 105

Resident Attendance 1,249 1,249 1,292

Rest of Texas 498 359 374 u.s. 153 164 168 Mexico ~ 115 74

Visitor Attendance 734 638 616

Total Attendance 1,984 1,887 1,908

Attendance Distribution (o/o) 1992 1993 1994

San Antonio 50.0 56.8 55.5 Austin 6.5 4.4 6.4 100-199 Miles M. ~ 5.5

Residents 63.0 66.2 67.7

Rest of Texas > 200 Miles 25.1 19.0 19.6 U.S. 7.7 8.7 8.8 Mexico 4.2 6.1 3.9

Visitors 37.0 33.8 32.3

Domestic Visitors 32.8 27.7 28.4

2-6 Table 3

ESTIMATED RANKED RESIDENT AND VISITOR SPLITS IN VARIOUS PARKS

\ R~!iid!il"t Att~ndanc~ Visitor Attendance {QQQ} Percent «mmD Percent ~"2---{t.M) Six Flags Astroworld (1994) 1,800 75 600 25 Marine World f\frica, Vallejo (1992) ~~~ 1,289 68 607 32 Fiesta Texas (1994) 1qDg 1,292 68 616 32 Pacific Science Center, Seattle (1992) ))...3 0 738 60 492 40 St. Louis Science Center (1992) 172-t..J 1,034 60 690 40 f\) I Shedd Aquarium, (1992) ~

Season

The critical importance of season is indicated in the following tabulation: 1992 1993 1994

May- August 69.95o/o 66.43o/o 74.75°/o

March - April 7.92 16.76 12.27 September - October 19.82 15.19 10.56 November 2.31 .L.§ 2.42 30.05o/o 33.40°/o 25.25°/o

Note that in 1994, the park reached a new high in seasonal concentration (75 percent). It is likely that these numbers and analysis of the profit and loss statement taken together will suggest a reduction in season length is appropriate.

Attendance By Product Categories

Special events, Christmas and regular park attendance are tabulated as follows:

Attendance (000)

Special Events 69.0 25.0 12.5 Christmas 121.0 99.8 195.4 Regular 1.982.4 1.884.4 1.908.2

Total 2,172.3 2,009.6 2,116.1

2-8 B~ Percentage 1992 1993 1994

Special Events 3.2 1.3 0.6 Christmas 5.6 5.0 9.2 Regular 91.2 93.8 90.2

Total 100.0 100.0 100.0

Special events have diminished in relative importance. 1994 generated only 0.6 percent of attendance. Christmas, however has risen to appreciable numbers.

It may be possible to mount these programs independently of a decision on park season, i.e., shortening the season does not necessarily eliminate the possibility of offering these programs.

Profitability analysis of these programs and the park in the context of a shortened season and reduced manpower will be key to their continuation.

2-9 Section 3

CAPACITY CHARACTERISTICS

To understand the functioning of the park, design day analysis is essential. It is defined as the relationship of the average of the top 20 days to total annual attendance. On-site peaking for a 5- to 6-hour park stay is typically 70 percent of that value. Disneyland operates at a peak on-site crowd value of 0.58 percent of its annual attendance on design day. The flat average of 365 days is 0.27 4 percent of the year. Fiesta Texas operates as follows:

1992 1993 1994 azl{CP' D) ~{? '2.'? ~q," 'l--IJ/..) High Day 33,929 30,870 38,032 20th Day 19,746 17,437 18,598 Total of the Top 20 Days 494,770 422,420 504,285 Average of the Top 20 Days (Design Day) 24,739 21 '121 25,214 Peak On-Site Crowd on Design Day @ 70°/o 17,317 14,785 17,650 Design Day as a Percent of Year 1.25°/o 1.12o/o 1.32°/o Peak On-Site Crowd on Design Day as a Percent of Year 0.87o/o 0.78°/o 0.92o/o

Conclusions:

• From monthly data, it is clear that this is a highly seasonal market and park inspite of its relatively mild climate.

• Seasonality is increasing as indicated by rising peak day and design day relationships to total annual attendance (design day is up from 1.25 percent to 1.32 percent; high day up from 33,929 to 38,032).

3-1 • On-site peak crowd during design day in 1994 was 0.70 x 25,214 or 17.650.

• Required ride capacity for a 45-minute wait on design day is 1.331 x 17,650 or 23,475 per hour.

Existing Ride and Waterpark Capacity

Like most major regional parks, only more so, this is both a show park and an attraction park. The attraction park, in turn, is both a ride park and a water park. That is part of its charm and diversity.

Ride capacity is tabulated in Table 4. Listed effective capacity is 16,894 which is substandard for a regional attraction park with a design day on-site crowd of 17,650. The capacity need for a 45-minute waiting interval is 23,475. The theoretical ride park deficit is 23,475 - 16,894 or 6,581 rides per hour. The water park with a listed capacity of 6,350 units per hour does not handle that deficit proportionally because it appeals only to a portion of park visitors. In 1994 it was attended by 60.5 percent of visitors. More significantly, the under capacity problem with rides is accentuated qualitatively by the fact that only 40 percent (6, 792 rides/hour) of ride capacity is classified as a major ride experience. The inventory is generally weak competition to the major attraction elements of the two Six Flags' parks in the Texas market. There is a real need for reinforcing this park with class A ride elements if it is to continue holding its high resident draw and reach into the more distant visitor markets for increased attendance.

60 + 45.

3-2 Table 4

HOURLY RIDE CAPACITY

Category Capacity

Spassburg/Westem Train A 3,360 Gully Washer Rafting Ride A 1,512 Water Chute A 1,300 Crow•s Nest B 960 B 960 The Hustler B 936 SS Overboard B 800 Adult (2 floors) B 760 Little Castaways B 720 Motorama Turnpike (2 tracks) B 720 Wave Swinger B 720 Rattler A 620 Wave Runner B 540 Wipe Out B 480 Convoy c 432 c 432 Child•s Play Area c 330 Skating Rink B 300 Pipeline 1/ c 240 Kiddie Bumper Cars c 220 Kiddie Coaster c 200 Paddle Boats B 126 Gusher 1/ c 100 Roller Racer c 90 Sky Coaster c 36

Total 16,894 per hour

1I These rides are both wet and dry and also provide capacity in the water park.

3-3 The water park adds to park capacity. Hourly capacity is listed as follows:

Mineshaft/6 Chuter 1,800 Splashwater Springs 300 Texas Tumble 1,600 Triple Dipper 350 Twister/Blowout 700 1.600 Total 6,350

A more reliable indication of water park contribution to capacity may be drawn from ride usage reports: 1993 1994

A. Total Ride and Water Park Usage (millions) 10.272 11.195 B. Water Park Usage (millions) 2.114 2.160 B/A Water Park Percent 20.6°/o 19.3°/o

The effective hourly capacity of the water park on the basis of the above usage is 20 percent of total capacity:

Total Capacity - Ride Capacity = Effective Water Park Capacity

16.894 - 16,894 = 4,224 units/hour 0.8

In theory, the water park could handle a larger part of total usage had it a universal appeal but it doesn't (estimated usage of the water park is 60.5 percent of patronage).

Per capita water park usage in 1994 was 2,160,000 + 1,908,000 or 1.13 units per person. Total per capita usage in 1994 was (11, 195,000 + 1,908,000) or 5.87 units per person. Subtracting out the water park (1.13) indicates a ride per capita usage of 4. 74, which is below the average of the traditional regional park by 40 or 50 percent (5.87- 1.13 = 4.74).

3-4 Show Capacity

The present show daily calendar for 8 theaters indicates the following capacity:

Daily Capacity Number Number at 1OOo/o Theater of Seats of Shows Utilization

Zaragoza 1,675 4 6,700 Lone Star Lil's 1 1,522 6 9,132 Sundance 1,300 3 3,900 Sangerfest Halle 1,000 5 5,000 Rockville High 990 4 3,960 T eatro Fiesta 650 4 2,600 Loop Drive In 650 4 2,600 Die Wurst 250 6 1.500

8,037 35,392

Effective average hourly capacity on design day at 70 percent utilization of available seats over a 10-hour time period is

35.392 X 0.7 = 2,477 10

The effective daily capacity of 24,770 is in balance with a design day of 25,214. Theoretically, everyone can see a show on crowded days. In addition, the nighttime laser show adds to the total of show capacity.

Additional capacity is available in adjacent grassy area of 3,900 seats.

3-5 Actual experience in shows per person is tabulated as follows:

1994 1993

Show Attendance 2,517,000 2,625,000 Park Attendance 1,908,236 1,884,357 Shows/Person 1.32 1.39 The show presentation of the park is quite strong. The ride presentation is weak because of the lack of major units. In this regard, the presentation was created with a balance problem.

Food Service

Food service facilities are listed as follows:

Available Space (Sguare Feet) Seating Total Seating Number Type Area Area Inside Outside

1 Full Service 5,810 9,490 180 33 4 Cafeteria 40,041 59,321 1,656 854 12 Fast Food 9.570 131860 116 408 55,421 82,671 1,952 1,295

Total seating is 3,297. Food service revenues in 1994 were $11.985 million or $145 per square foot on total space, $216 per square foot on seating area space. These are typical values in the regional park business.

Food service capacity is estimated at 7,329 per hour based on one cycle/hour in sit­ down, two cycles in the cafeteria, and four cycles in fast food [213 + (2 x 2,51 O) + (4 x 524 = 7,329].

3-6 Merchandise Service

Merchandise service facilities are listed as follows:

Category Number Type Space (Sq. Ft.)

Gift Shop 22 Operated 26,774 Gift Shop 22 Leased 5.613 32,387 Category Number Type Space (Sq. Ft.)

Games 49 Operated 38,835 Games 7 Leased 5.758 44,593

Gift shop capacity is estimated at 3,238 per hour based on 30 square feet per person in the stores and three cycles per hour (32,387 + 30 x 3 = 3,238).

Gift shop revenue per square foot in 1994 was $6,957,000 + 32,387 or $215/square foot.

Games revenue (operated plus plus concessions) in 1994 was $4.24 million. Per capita games revenue (+ 1 ,908,000) was $2.22 per capita, a nominal result. In general, the games area is a high quality presentation.

Aggregate Capacity

Total park hourly capacity is summarized in Table 5. The conclusion of the analysis from usage data on rides, water park, and shows is that capacity is adequate and balance is satisfactory except for the lack of major rides.

3-7 Table 5

AGGREGATE HOURLY AND DAILY VENUE CAPACITY 1994

Units Usage Per Per Hour Person

Rides 16,894 4.74

Water Park 4.224 1.13

Total 21,118 5.87

Show Capacity 2.477 1.32

23,595 6.19

Food Service 7,329 N.A.

Merchandise 3,238 N.A.

3-8 Section 4

PER CAPITA ANALYSIS

Per capita admissions gross revenues for the regular season over the life of this park are shown as follows:

1992 1993 1994

Attendance (000) 1,982.4 1,884.4 1,908.2 Admission Gross Revenue ($000) 26,016 22,368 18,804 Admissions Per Capita ($) 13.18 11.87 9.85

In most major attraction parks, admissions yield generally ranges from 70 to 80 percent of the adult ticket price as follows:

1992 1993 1994

Adult Ticket Price at Fiesta Texas ($) 22.95 23.95 24.95 70°/o Yield ($) 16.06 16.76 17.46 80o/o Yield ($) 18.36 19.19 19.96 Fiesta Texas Yield ($) 13.18 11.87 9.85 Shortfall at 70°/o Yield (%) 18 29 31 Shortfall at 80°/o Yield (o/o) 28 38 44

The erosion of yield has progressed too far. As a step in the right direction, discounting has been restricted in 1995 and yield over $12 is projected. As might be expected attendance is down as a result.

4-1 The nature of the per capita decline at Fiesta Texas is shown by the data in Table 6 which shows attendance and revenue distributions for all classes of admission. Three problem areas are shown:

1. General admission ticket sales have gone from 26 percent in 1992, already a low number reflecting heavy discounting, to 5.5 percent in 1994.

2. Free admissions, with an improving trend, have ranged from 25.1 percent to 21.3 percent in 1994. For major parks, the percentage of free admissions at Fiesta Texas is the highest that either ITPS or HPC has observed.

3. Season passes drastically reduced per capita in 1994. This would happen in a dominantly resident based attendance. Season pass use has risen from 10.9 percent to 18.9 percent.

Admissions per capita data for these three categories in the regular season show the effect on per capita:

1992 1993 1994 Admissions Admissions Admissions Per Per Per Admissions Capita Admissions Capita AdmissionsCapita (ooo> ru (ooo> ru (ooo> ru Gen. Admission 516.1 21.29 263.0 21.14 104.6 21.81 Free 498.1 0 450.2 0 405.8 0 Season Pass 227.2 12.43 419.7 11.35 481.1 7.41 All Other Categories 7 40.9 16.47 751.5 16.02 916.7 14.14 Total 1,982.4 13.18 1,884.4 11.87 1,908.2 9.85 The combination of free and season pass indicates that in 1994, 886.9K attendance (46.5o/o) entered the park for an average admission of $4.02.

4-2 Table 6

ADMISSIONS PER CAPITA ANALVSIS BY TICKET TYPES

1992 1993 1994 By Number: 000 Percent 000 Percent 000 Percent

General Admission 516.1 26.0 263.0 14.0 104.6 5.5 Free 498.1 25.1 450.2 23.9 405.8 21.3 Salesffour!Travel 391.4 19.7 394.1 20.9 394.6 20.7 Promotion 267.0 13.5 311.1 16.5 426.1 22.3 Season Pass 227.2 11.5 419.7 22.3 481.1 25.2 USAA 66.1 3.3 35.5 1.9 54.0 2.8 2nd Day 14.7 0.7 9.1 0.5 26.7 1.4 Employee il Qj_ .:L.Z Qj_ 15.3 0.8

:L 1,982.4 100.0 1,884.4 100.0 1,908.2 100.0

1992 1993 1994 By Revenue: $000 Percent $000 Percent $000 Percent

General Admission 10,990 42.2 5,561 24.9 2,281 12.1 Free 0 0.0 0 0.0 0 0.0 Sales/Tour/Travel 6,746 25.9 6,108 27.3 5,976 31.8 Promotion 4,154 16.0 5,232 23.4 5,942 31.6 Season Pass 2,825 10.9 4,765 21.3 3,563 18.9 USAA 1,061 4.1 548 2.5 754 4.0 2nd Day 210 0.8 128 0.5 125 0.7 Employee 29 Qj_ 25 Qj_ 163 M

:L 26,016 100.0 22,368 100.0 18,804 100.0

4-3 . Analysis of Free Attendance

Since free attendance is inordinately high in this park, its analysis is undertaken in Table 7.

The free percentage is improving (25.1 to 21.3). This is a problem area which cannot be solved all at once. The park was conceived with this problem, i.e., generate attendance by discounting to validate high goals.

Regular Park Season Per Capita

Per capita for all categories of activity are detailed as follows:

1992 1993 1994 ill 00 ill (%) ill 00

Admissions $13.18 48.3o/o $11.87 48.5o/o $9.85 44.3°/o Food & Bev. 6.36 23.3 5.68 23.2 6.00 27.0 Merchandise 6.93 25.4 6.15 25.1 5.55 24.9 Parking 0.64 2.3 0.58 2.4 0.63 2.8

Other ~ 0:.1 Q.j_9 0.8 023 ~ Total $27.31 100.0 $24.47 100.0 $22.26 100.0

Food and beverage and merchandise presently account for 52 percent of gross revenues, a strong showing. Forty to 45 percent is usual.

Total per capita in 1994 of $22.27 was $6 to $10 below the range of major regional parks. However, those parks which operate at this per capita level generally operate profitably, albeit at a lower service level than that offered by Fiesta Texas.

4-4 Table 7

ANALYSIS OF FREE CATEGORIES

1992 1993 1994 Category (000) (000) (000) Percent

Less Than 3 Years 106.7 26.3

Kids Promotion 62.6 15.4

We Miss You 79.0 19.5

Exec./Em ployee Passes 9.1 2.2

Next Year Season Pass 31.1 7.7

Employee Guest 16.7 4.1

Department Comps 43.3 10.7

Trade Comps 41.2 10.2

Other Comps 14.5 3.6

After? 1.5 0.4

498.1 450.2 405.8 100.0

Total Attendance 1,982.4 1,884.4 1,908.2

Percent Free 25.1 23.9 21.3

4-5 Section 5

PROFITABILITY

Cost of Goods Sold

Percentage experiences in cost of goods sold for food service, merchandise, catering and other are generally what they should be. They are detailed as follows:

Cost of Goods Sold as a Percent of Gross Revenue

1995 1992 1993 1994 VTD

Food & Beverage 34.4 32.0 29.9 31.1 Merchandise 46.3 49.0 46.6 46.2 Catering 37.1 42.5 42.3 36.8 Other 0.9 1.71 1.5 0.9

Profit and Loss Experience

Operating profit history from the profit and loss statements is summarized in Table 8. This is for all operations, regular season attendance, Christmas, and special events. Table 8 shows that the park is expensive to operate.

In 1992, the park broke even on operations, in 1993 it lost $18.2 million, in 1994 it lost $6.6 million. This loss is EBDITA (earnings before depreciation, interest, taxes, and amortization). The reasons are because, from the beginning and with the decline in volume, employment costs are much larger than the norm of the industry (as a percent of revenue, 40 to 50 percent higher) and marketing costs as a percent of revenue from the beginning are double the norm of the industry. Another major factor contributing to operating loss was a $12 million increment in costs in 1993 due to Rattler litigation and insurance claims.

5-1 Table 8

PROFIT AND LOSS EXPERIENCE

1992 1993 1994 ~ Percent $000 Percent ~ Percent

Gross Revenues 60,268 100.0 51,600 100.0 47,715 100.0 Less Cost of Goods Sold 12,343 20.5 10,937 21.2 10,070 21.1 Net Revenue 47,925 79.5 40,663 78.8 37,645 78.9

Employment 24,793 41.1 25,587 49.6 23,432 49.1 · Contract Services 2,883 4.8 2,733 5.3 2,053 4.3 Communication & Travel 1,548 2.6 1,249 2.4 1,311 2.7

0'1 Advertising & Promotion 10,161 16.9 8,441 16.4 7,746 16.2 I f\) Operations Mat. & Supplies 2,369 3.9 2,843 5.5 2,873 6.0 Facilities 2,668 4.4 3,120 6.0 2,728 5.7 Taxes & Insurance & Other 1,684 2.8 13,355 25.9 2,696 5.7

46,105 76.5 57,327 111.1 42,840 89.8

Gross Operating Profit/Loss 1,820 3.0 (16,664) (32.3) (5, 195) (1 0.8) Management Fee 1,809 3.0 1,541 3.0 1,412 3.0 Net Operating Profit/Loss 11 ----- (18,204) (35.3) (6,607) (13.8) Table 9 data also indicates that the park is expensive to operate. The table analyzes employment per attendee compared to employment costs for 3 regional parks operating 120 to 130 days at , Dorney, and Valley Faire (which range from $7.36 to $8.67 per attendee). These three parks are highly profitable. The Corporation which operates all three is the highest profit operation (by percent operating profit) in the business.

Expense Analysis

For purposes of projecting expense distribution in 1995, expense detail is shown in Table 10. It is based on a combination of budget numbers and revised projection numbers but is very close to total current projected expense numbers ($41.56 million compared to $41.52 million). The park is operating at 88 percent operating costs to gross revenue (not including cost of goods sold). Without food and merchandise service, costs aggregate 74.2 percent of gross revenue. In terms of comparative values in other parks, operating expenses are generally in the range of 58 to 63 percent or 25 to 30 percentage points less. The following particularly high values are noted: Percentage Points Above Standard1 Marketing 8 - 1 0°/o Administration 6 - 7 Show 2 - 3 Insurance 1 - 2 Maintenance & Supplies 2 - 3 19 - 25°/o

Management is busy reducing costs at this time because of these conditions and a shortfall in budgeted attendance now projected at 1.7 million for the year 1995. Management's' total expense projection in its budget is $41.52 million. Reductions are reportedly in process to bring the total down to approximately $40 million for the year

Percentage of gross revenue.

5-3 Table 9

A LABOR COST COMPARISON FORLONGANDSHORTSEASONPARKS 1995

Long Season Operation Short Season Operation Fiesta Cedar Valley Texas Point Fair Dorney

Attendance (millions) 1.7 3.6 1.1 1.2

FTE- 1995 Stated Objective 255 1/ 299 Seasonal 2.175 MOO Total People 2,430 3,799

EmgiQ~ment Budget (~ millions) Full Time 6.1 10.5 1.8 2.4 Seasonal 14.8 15.8 4.6 5.5 Maintenance li 4.9 1.7 2.0

24.0 31.2 8.1 9.9 Employment Cost $/Attendee $14.11 2/ $8.67 $7.36 $8.25

Calendar 172 3/ 120 120 120

1/ Stated objective 6/29/95 but still under review. 2/ Cut to about $13.40 in process. 3/ Includes Christmas.

5-4 Table 10

EXPENSE ANALYSIS 1995 BUDGET (As of June 29, 1995)

1995 Projection Percent Percent of of Gross ~ Exgense Bevenues 1/ General & Administrative General Manager 655.3 Administration 969.3 Accounting 1,160.7 Loss Prevention 958.6 Purch., General Svcs., Art 443.8 Contract Services 21 1,501.1 Communications & Travel 1.242.7 6,931.5 16.7% 14.7%

Show 31 4,546.1 10.9 9.7

Food & Beverage Expense 3,649.9 8.8 7.7

Catering 362.5 0.9 0.8

Merchandise and Games 2,604.7 6.3 5.5

Marketing Public Relations 119.1 Corporate Sponsors 53.2 Marketing 944.0 Advertising & Promotion ~ 8,685.6 20.9 18.4

Operations Wardrobe 476.2 Warehouse 528.8 Operations 2,960.8 Materials & Supplies 2,276.4 Personnel Training & Safety 742.6 6,984.8 16.8 14.8

Maintenance Maintenance Labor 3,095.5 Equipment Maintenance 74.2 Tech. Equipment 190.6 Ride Maintenance 187.9 Landscaping ~ 3,712.7 8.9 7.9

Utilities 1,545.7 3.7 3.3

Insurance 1,913.0 4.6 4.1 Other 617.6 .:1...2 u 41,560.0 100.0% 88.2%

Costs Less Merchandise/Food Service 74.2%

1/ Projected at $47.1 million. 21 Total $1,839,801 less show services of $338,750. 3/ $4,207,344 + $338,750.

5-5 Based on year to date indications and the most current revised budget, results for 1995 are projected from this starting point (before the total cost reduction to $40 million):

Park Christmas Total

1995 Projected Attendance 1,700,501 156,500 1,857,001 Gross Revenues ($ millions) 44.775 2.300 47.076 Less Cost of Goods Sold ($ mil.) 8.415 0.564 8.980 Net Revenues ($ millions) 36.360 1.736 38.096 Operating Costs ($ millions) 40.070 1.447 41.517 EBDITA Operating Loss Before Fee (3.71 0) 0.289 (3.422) Management Fee 0.893 0.046 0.939 EBDITA Profit/Loss ($ millions) (4.603) 0.243 (4.360) Per Capita Gross Revenue($) 26.33 14.70 25.35

The level of the above loss is predicated on achieving a gain in regular season per capita from $22.26 in 1994 to $26.33 in 1995, a gain of $4.07. Any shortfall in this per capita gain would increase the loss.

The discussed reduction of total operating costs to $40 million from $41.5 million could lower the above operating loss including the management fee ($4.360 million) to $3 million. That is an essential first step in any business strategy alternative regardless of the tactical approach taken.

Catering and Christmas Profitability

Revenues for catering and Christmas are shown in Table 11 along with applicable cost of goods sold to compute net revenues.

After direct expenses, 1994 catering shows an operating profit of $379,000. However, if overhead is applied on any usual basis, the operation would lose money.

5-6 Table 11

CATERING AND CHRISTMAS PROFITABILITY ($ Millions)

1994 Catering Profitability

Catering Revenue 1.286 Less Cost of Goods Sold (42.3o/o) (0.544) Net Revenue 0.742 Catering Direct Expense 0.363 Catering Profit Before Overhead 0.379

Possible Overhead Cost Allocation Basis: By Revenues 1,286 + 47,715 or 2.7o/o of applicable costs By Expenses 363 + 42,586 or 0.85o/o of applicable costs.

1994 Christmas Profitability

Gross Revenues 2.498

Less Cost of Goods Sold (0.607)

Net Revenue 1.892 Direct Expenses 2.079

Operating Loss Before Overhead (0.187)

Possible Overhead Cost Allocation Basis: By Days 26 + 365 = 6.85o/o of applicable costs By Revenue 1,997 + 47,715 = 4.19o/o of applicable costs By Expenses - 1 ,892 + 41 ,517 = 4.56°/o of applicable costs.

5-7 At Christmas in 1994, gross revenue of $2.498 million was generated in 26 days. After cost of goods sold and direct expense, loss was $187,000. If applicable overhead is allocated by days operated, the percentage is 6.85. If overhead is applied by revenues, the percentage is 4.19. In either case, the project likely shows a substantial loss. A decision on continuation of these two departments should be made after costs and profits studies are evaluated in depth and other factors are considered such as impact on personnel and impact on the marketplace. It is the judgement of this analysis that expense reduction is the primary need at Fiesta Texas. Christmas operations lessen the loss of a full bore staffing and a longer season but that alone does not justify its continuation. In this regard, there is a need for clearly defined departmental profit and loss analysis on off-season operations.

5-8 Section 6 STRENGTHS AND WEAKNESSES

Strengths:

1. well built park with all services first class 2. outstanding show presentation with superb theaters 3. good food and merchandise supporting services and per capita performance 4. fully qualified organization and staff 5. best night laser show in the business 6. well-sited park in a novel and interesting setting (the quarry) 7. outstanding periphery development 8. best location in San Antonio for a major park 9. fast growing tourism and resident market heading for 11 mill ion total at year 2000 10. water park addition of a special kind of adjunct capacity like that which Six Flags is installing at Magic Mountain and already has at 11. projection of an Hispanic ambiance in America's showcase inter-American city, theming at its best.

Weaknesses are:

1. continuous operating losses 2. admissions discounting and substandard admissions per capita 3. high seasonal character and profit analysis indicating the probable necessity of a shorter season 4. organization heavily overloaded and costly for the park operation that has evolved. Operating costs now at 88 percent of gross revenues are 25 - 30 percentage points greater than generally prevailing industry objectives of 58 to 63 percent of gross revenue.

6-1 5. in terms of supporting infrastructure, a park built so expansively that cost reduction may be difficult to accomplish. That is the challenge faced by management. 6. very low capacity of major ride attractions 7. the resident market saturated with free and heavy discount admissions (46.5 percent of the gate paid an average $4.02 for admission). That can only be turned around with new presentations and reinvestment.

Preferred Alternative and Recommended Action

1. Cut to 128-day season now. 2. Decide on whether to go ahead with Christmas after resolving the issue of shortening the season. Continuation of the Christmas program should be based on its clearly assessed profitability considering direct expenses, revenues, applied overhead, and availability of staffing. 3. Increase primary major ride capacity on a programmed basis of reinvestment. 4. Gradually bring employment expenses into line with an objective of a cost $12 per attendee by 2000. That would be equivalent to an operating expense ratio of 60 percent of gross revenues, down from the present park level of 89 percent

(1995 projected park expenses exclusive of cost of goods sold, $40.07 million + $44.775 million gross revenues). 5. Invoke a short term total operating cost reduction program in 1995 to the $40 million level discussed by Management or more if possible.

6-2 Section 7

FIVE YEAR ECONOMIC PROJECTIONS FOR THE RECOMMENDED ALTERNATIVES

Table 12 shows a five year asset buildup, primarily in major rides, years 1995-2000. Total addition cost is $44.7 million, 1996/97 totals $15.0 million. This would announce new programs to the industry and the marketplace in a major way. The plan calls for five years of expansion of major ride capacity with additions totalling 7,800 units per hour (1996-2000).

As projected in Table 12, market penetration builds up to 20.5 percent, above its current level of 17.3 percent, but below its 1992 level of 21.9 percent.

Attendance grows with market increases and improved penetration to 2.3 million. It is assumed that Sea World will also grow and that the combined penetration will likely reach 37 to 38 percent.

Table 13 outlines a program for park season per capita improvement rising from $25.71 in 1995 to $33.53 in 2000. Christmas, if continued, could add a dollar plus. This requires obtaining a better yield on an adult ticket at $25.00 (without change), a rigorous diminishing of free categories, and a programmed control of discounts. The admission yield reaches $18.75 per person in the year 2000 up from its present level of approximately $12.16. Parking, merchandise, food service, and other categories which are performing well are inflated at two percent per year.

Table 14 projects a developing positive profitability based on reduction of costs to $20.13 per capita from its present level of $23.56. The total of park operating expenses rises from $40.1 million in 1995 to $46.8 in 2000. Attendance rises to 2.325 million. Net revenues rise from $36.3 million to $62.4 million. Key to the projection is a reduction of employment expenses to $12.00 per capita by 2000 and total operating expenses to 60 percent by 2000.

7-1 Table 12

THROUGHPUT PARAMETERS FIVE YEAR PROJECTION

1995 1996 1997 1998 1999 2000

Market (000) 9,808 10,098 10,396 10,703 11,018 11,343

Market Penetration (o/o) 17.3 18.5 19.0 19.5 20.0 20.5

Attendance (000) 1,701 1,868 1,975 2,087 2,204 2,325

Hourly Ride Capacity (Major Rides) 6,792 8,192 9,392 10,592 12,592 14,592

Increment 1/ 0 1,400 1,200 1,200 2,000 2,000

Price/Unit ($) 5,400 6,300 5,800 4,500 4,000

Cost ($ millions) 2/ 5.7 7.5 7.5 7.0 9.0 8.0

Cumulative Cost 5.7 13.2 20.7 27.7 36.7 44.7

1I Fiesta Texas can obtain the large ride offering more capacity in 1996. 2/ Assumes the higher capital expenditure for 1996 (see Appendix A).

Source: International Theme Park Services and Harrison Price Company.

7-2 Table 13

PARK SEASON PER CAPITA PROJECTION{$)

1995 1996 1997 1998 1999 2000

Admissions 12.16 1/ 13.12 14.35 15.69 17.15 18.75 8/ Parking 0.66 2/ 0.66 0.68 0.69 0.70 0.72 Merchandise 5.79 3/ 5.83 5.95 6.07 6.19 6.32 Food Service 6.00 4/ 6.04 6.16 6.28 6.41 6.54 Sponsor 0.39 5/ 0.40 0.41 0.41 0.42 0.43 Other 0.71 6/ 0.71 0.73 0.74 0.76 0.77 25.71 26.76 28.28 29.88 31.63 33.53 Catering 0.62 7/ 26.33

Gross Revenues $Millions 44.8 50.0 55.9 62.4 69.7 78.0

1/ (44.775 million x 0.462) + 1 ,700,501. 2/ (44.775 million x 0.025) + 1 ,700,501. 3/ (44.775 million x 0.220) + 1,700,501. 4/ (44. 775 million x 0.228) + 1, 700,501. 5/ (44.775 million x 0.015) + 1,700,501. 6/ [(44.775 million) x (0.019 + 0.001 + 0.007)] + 1 ,700,501. 7/ Catering excluded after 1995 -continuation uncertain. 8/ Per capita increase on admissions is based on improving yield on $25 adult ticket to 75 percent by 2000. All other categories increased 2 percent per year.

7-3 Table 14

IMPROVED PROFITABILITY PROJECTION

.1.995. 1996 1997 199B 1999. 2000

Gross Revenue ($ millions) 44.8 50.0 55.9 62.4 69.7 78.0 Cost of Goods Sold (0/o) 18.8 19.3 19.5 19.7 19.9 20.0 Cost of Goods Sold ($ millions) 8.4 9.7 10.9 12.3 13.9 15.6 Net Revenues ($ millions) 36.4 40.3 44.8 50.1 55.8 62.4

Expenses: Employment (o/o of gross) 50.4 47.8 45.1 41.8 38.6 35.8 Other (o/o of gross) ~ 34.4 ao.J3. 28.2 26.2 24.2 Total 89.5 82.2 75.8 70.0 64.8 60.0

Employment ($ per cap) 13.26 12.79 12.76 12.50 12.25 12.00 Other ($ per cap) 10:..aQ a22. a.z.t 8.44 822 ~ '-J I Total 23.56 22.01 21.47 20.94 20.51 20.13 ~ Employment ($ millions) 22.6 23.9 25.2 26.1 26.9 27.9 Other ($ millions) 1L.5. 17.2 17.2 1L.6. 18& 1M Total ($ millions) 40.1 41.1 42.4 43.7 45.2 46.8

Cash Flow: Operating Profit/Loss ($ millions) (3.7) (0.8) 2.4 6.4 10.6 13.2 Capital Addition ($ millions) (5.7) (7.5) (7.5) (7.5) (7.5) (8.0) Cash Flow ($ millions) (9.4) (8.3) (5.1) (0.9) 3.1 5.2 Cumulative Cash Flow ($ millions) (9.4) (17.7) (22.8) (23.7) (20.6) (15.4) EBD IT A Operating Profit % (8.2) (1.6) 4.3 10.3 15.2 21.2

Assumptions: Park expenses 1995 $40.1 million. Major ride addition secured for 1996. Key to this grid is reaching operating expense ratio of 60 percent in five years. Cumulative cash flow rises to negative $23.7 million in 1998 and declines to negative $15.4 million in 2000 as the park transitions to an EBDITA operating profit of 21.2 percent ($13.2 million). The cross over to profitability occurs in 1997. Market values of the park in 2000 if based on 7 to 8 times EBDITA would be in the range $95 to $106 million.

In the opinion of ITPS and HPC these are rational, obtainable objectives if major reinvestments are made as outlined and cost reductions are pursued as a major strategy.

Reduced Scale Alternative

The alternative, without reinvestment, is a steady decline in attendance and a drastic reduction in services as necessitated cuts in staff and operational expenses are invoked. Management is studying such a drastically reduced alternative with total costs including costs of goods sold at $8.3 million being reduced to $40 million. Their interim finding predicts a 1.40 to 1.45 million attendance result and a $5 or $6 million cash flow loss in that mode.

It should be noted, however, that a standard pro forma for a regional park of reduced scope along these lines should show the following numbers:

Attendance 1,200,000 1,400,000

Per Capita Objective ($) 26.00 26.00 Gross Revenue ($ millions) 31.2 36.4 Cost of Goods Sold 19o/o ($millions) 5.9 6.9 Net Revenues ($ millions) 25.3 29.5 Available for Operating Costs at 60°/o of Gross Revenue ($ millions) 18.7 21.8 EBDITA ($ millions) 6.6 7.7 EBDITA (o/o) 21.2 21.2

7-5 Operating this park at a total of $19 - $22 million operating expenses (about half of the present budget) would require a total change in operating philosophy and a major reduction of program and services. Impact on La Cantara would need to be addressed. Fixed costs and their reduction should be studied carefully. Some support facilities might necessarily be mothballed.

A typical expense budget for a regional park operation of this scale would look like this:

Percent of Gross Revenue Exgenses (SOOO) Expense Present Required 1.2 M.illion 1.4 Million Category Level Level Attendance Attendance

G&A 14.7 6.0 1,872 2,184 Marketing 18.4 8.0 2,496 2,912 Operations Park 14.8 11.8 3,682 4,295 Food Service 7.7 7.7 2,402 2,803 Merchandise 5.5 5.5 1,716 2,002 Shows 9.7 6.5 2,028 2,366 Maintenance 7.9 6.5 2.028 2.366 Total 45.6 38.0 11,856 13,832 Utilities 3.3 3.0 936 1,092 Insurance 4.1 3.0 936 1,092 Other 1.3 2.0 624 728 87.4 60.0 18,720 21,840

Whether or not this park can be operated on this budget scale would necessarily be reviewed in depth.

7-6 If the reinvestments required for long term maximum development and reinvestment are not forthcoming, the above context of operation is better economics than shutting down which is the last stand of a technically bankrupt operation and technically this operation on its own without access to capital additions could have been bankrupted in its second year.

The final issue will be determined by the best interests of ownership in the context of these two alternatives, long term redevelopment and reinvestment or cutting the operation drastically to stem the cash flow drain. International Theme Park Services and Harrison Price Company stand ready to assist in this evaluation.

7-7 APPENDIX A

CAPITAL ADDITIONS PLAN

Prepared by

INTERNATIONAL THEME PARK SERVICES, INC. As we developed the five year product capital plan, many factors were taken into conaideration. These conaiderations included:

• Exlatlna ride capacity untta. • Existing ride proaram with regard to attendance by demographic segment. • Ride marketability as an attendanCe generator. • Competh.lvc ride program offering including , Six Flags AstroWorld, and Seaworld. • Ride manufacturer product availability. • Ride attraction oost analysis.

It 11 me opinion of bOth HPC and lTPS that m~or product introduction must occur during the next five (5) yean to support the attendance growth forecast projected in this report.

Attraction plannina which includes typically the final selection, design and procurement of the equipment, is done 12 to 16 months in advance of opening.

Due to reuona understood by Fiesta Texu mana1ement and explained to HPC and ITPS, thi1 normal prooe1a has already been delayed. · Thia delay will most likely affect the product selection for 1996 should management receive approval to proceed.

1996: For 1996; we have suuested two options:

(A.) 'The most desirable plan would be to Introduce a spectaCUlar new coaster. (We have provided $7.5 million dollars for a major coaster.) It is, we assume, too late to purchase anuvor couter which would open in April or May of 1996. We have. however, dilcuued tho development ·or a major couter with otie company who baa indicated they could have one ready for operation in ~. 1996.

(B.) This option provides for a smaller coaster almilar to a Boomerang. Ncilher HPC or ITPS believe that a coaster of this nature bu the momentum to generate enough attendance to warrant the investment .

.12!1: Baaed ou the aotua1 capital ride addition program completed in 1996. we are recommendlni the followfnl:

(A.) A large ~or coaster be introduced. Thia assumes that no major coaster wu introduced in 1996; or

(B.) 1bat If a ~or coaster was introduced in 1996, the park would follow in 1997 with a mtJor /attraction. We believe whichever ride ia selected that they both have the capacity and marketability to provide significant attendance and revenue increaaea. 1998: In 1998, we have proposed a simulator attraction on the order of "Back to the Future". This product selection was dctcnniucd baled on current and future attraction component requirements u they relate to attendance demography. An attraction of this namre Will generate, we believe, the forecuted growth in attendance and revenue.

The capability to develop sophisticated attractions of this type is existing in the manufacturer marketplace. We believe thls type of attraction can be realized with the planned budget of $7.5 million.

l9t9: For 1999. we have provided for another spectacular coaster. This coutcr would be developed cotally indoors. The indoor couter would feature , darkness~ lipt, IOWld and other special effects to addeve tbe dealred attendance. revenue and marketability impact.·

This coaster could be themed in such a way to carry riders into the new millennium.

~: The tum of the century 2000 AD prov ldc~J for a maJor water ride installaqon that utilizes the canyon rim as well u the park basin floor for its back drop and operating footprlnt.

This ride, the .. Over the Falls" ride designed by AG will be fully designed and ensineered for introduction into the park CKpital expansion plan. This ride has the eneray and excitement to generate the proposed attendance and revenue prqjecmd tn this repon. It can be realized for the proposed budget scheduled in this report. #I#

AB stated above, many issues were taken into consideration in recommending this five year plan. Many types of rides and attractions were ·a110 analyzed and CODiidered.

Other opdonasuch as 3-dimenaional/4-dimenlional atttactions (ala the Muppet Show at MOM Studios/Florida) could also be conaidorcd for introduction into the park attraction program. 'Ibis would allow for utilization and convertlna of existing. expelllive live ahow proaram to more Wit effective attractions.

The product recommendations outlined above present the proper solution to enhancing the overall ride and attraction proaram. At the aa1n" time, they provide the necessary and correct capacity Incrementa to bring the total ride entertainment units up to the proper park lcvcla. ThOle recommendations also have the "horsepower• to generate the necessary attendance and revenue growth required to put Fiesta Tex.u on a profitable trcndlinc.

We Rtrongly recommend that this five year program be given immediate consideration in order to properly address the 1996 and subsequent years expansion proarama.

### TableA·l

flannfffi futurc &pansimy 4t Fkm Tgs %S96 to 2Q!l0

Estimated EstimtJted DnJ1.lopmmt Pltumei Hourly Cost Ycq B~quiDH CapadtJ(

(*) 1996 A - Small Coaster 800 $4.0 -or .. B - Large Coaster 1,200 - 1,400 $7.5

1997 A - Large Coaster 1,200 $7.5 -or· B .. Water Ride 1,200 $7.5

1998 Motion Base Simulator 1,ZOO · $7.5

1999 Indoor Coaster 2,000 $9.0

2000 Water Ride ~000 $8.0

(*) Assumes utilization of Large Coaster.

Source: International Theme Park s.vtces, Inc. ~· I

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