Theme Park Industry - Book Report/Review Example

Six Flags The theme park industry can best be described by other names as holiday parks, pleasure parks, recreational parks, or even amusement parks, these parks attract visitors both young and old who want to have a wonderful fun experience. The biggest known theme park on offer in the world’s Disney parks and amusement centers within the market six flags have infiltrated the business and offer remarkable sights. They have a number of parks most of which are located in the unites states of America on offer here are thrill rides, water attractions, shows ,game venues, concerts, restaurants concerts and a whole range of family oriented shows. Six flags revenue streams come from a number of activities including: Entrance ticket sales Merchandise, food, beverage sales and parking services licensing, sponsorship and other fees Weekend days are typically the best peak days for attendance at the parks because the number of visitors is very high. Opportunities for revenue growth do exist by embracing the high end innovations and development in information technology six flags look forward to a high end constant revenue generation stream. The industry is exposed to some risk which are best described below Lack of reaching the growth strategy This includes lack of capital investment and lack of improvement of the various attractions and amusement parks, lack of product innovation, which would materially affect the business. Terrorist activities, natural disasters, contagious diseases can adversely affect park attendance. There is the constant terrorist alertness and threats of future terrorist activities, natural disasters and contagious diseases may send customers away. The reality that the financial target of project 500 by 2015 may not be reached There is no assurance that the desired programs changes may bring in the desired $500 million by 2015.thhese program changes include improvement on Key revenue drivers, marketing programs, pricing programs, operational changes, and process improvements Bad economic conditions that exist world over may have an adverse impact on the businesses operations and financial outlay These conditions include global recession, the current negative economic conditions for example the decrease in discretionary spending due to decreases in consumer confidence tastes and preferences. Competition from other entertainment alternatives There are other entertainment sports such as movies, home entertainment options, sports Attractions and vacation travel these may cut in on the number of visitors to the theme parks and thus greatly compromise the revenue stream. Changes in consumer tastes and preferences as well as adverse weather conditions individual tastes and preferences may change and thus take the customer away from visiting the sights another factor could be the changes in weather conditions since most of the amusement centers are outdoor this can affect the number of visitors thus reducing the revenue income. Accidental risks within the parks Much investment has been directed towards safety within the parks but there may still be inherent risks an injury may occur and with the constant incremental use of the social media, this poses a great risk of publicity of any minor event. Risk of Product recalls, product liability claims and associated costs Toys may be recalled if there is a defect; food may too be recalled if there is a suspect of food contamination, this may materially affect customer attendance. Cyber security risks and the failure to maintain the integrity of internal or guest data thus data loss, litigation and liability Because of the large volumes of internal and guest data, including credit card numbers and other personally identifiable information, for business purposes, including for transactional or target Marketing and promotional purposes and our various information technology systems enter process. As per the companies suspicious activity it was found during the review of annual report that it had taken a senior secured credit facility worth $890 million this is part of the $120 million loan. The loan had the option of increasing up to $150 million under certain circumstances. Another $250 million senior secured loan facility on exit facility in which the company repaid $25 million on Exit First Lien Term Loan. This caused the company’s to report net loss of $1.0 million primarily to extinguish debt. Financial arrangement Six flags use both debt and equity financing to source for funds. As described in the consolidated statement of cash flows, it’s worth noting that the company has borrowed $800,000 thousands funds in the year 2012. While in 2011, it has borrowed a total of $934,400 thousand. Off-Balance Sheet Arrangements and Aggregate Contractual Obligations The company had an off balance sheet item in the form of a guaranteed the payment of a $32.2 million construction term loan incurred by HWP Development LLC (‘‘HWP’’) for the purpose of financing the construction and development of a hotel and indoor water park located adjacent to The Great Escape theme park in Queensbury, New York. Operating Leases The company has some operating leases mainly long term sites as Mexico, La Ronde and a small parcel near Six Flags New England as at December 31, 2012, a brief summary is as follows (in thousands): Year ending December 31, 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,581 2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,154 2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,841 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,794 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,614 2018 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159,147 Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $194,131 Read More