You do know that a child died on the Schlitterbahn’s “Verruckt” last year, don’t you? I was surprised it took as long as it did, because that thing was a disaster waiting to happen.
Whoever designed and approved that thing was a Darwin Award winner by proxy.
As much as I hate to mention his name, after all that’s happened, but isn’t this one of Bill Cosby’s 1960s stand-up jokes? We had the LP, called Bill Cosby, Right!
Sure is. Hey, he was a funny guy. Just as OJ was an outstanding running back and likable celebrity. People are complex.
Um, about a million guests a year, at $50 a pop, plus ancillary sales of food and gifts, which I’ll generously put at $20 a person (to include kids who came in free). We’ll call it $70M in gross revenue; profit margins on theme parks run from 20% to 40% but scale helps that, so we’re gonna go low-end, which is possibly still generous at 20% because I don’t know their fixed costs, and so realistically we’ll say $10M-$15M gross profit to investors, which might not actually bad given the locality helped fund a lot of it.
My guess is he can hold off the creditors for a while, IF he can keep the turnstiles going at that rate.
Now I remember better–the title was Bill Cosby Is A Very Funny Fellow, Right!
When you think about the stand-up comic part of his career it really reminds you there was more to him than Jello Pudding commercials and Dr. Huxtable. His contribution to the 1960s wave of stand up comedy was highly creditable. And for some reason this makes his predatory criminal side all the more disappointing.
Sent from my SM-G950U using Tapatalk
you really think 3,600 people are going to this stupid Ark Museum every single day?
Was he only letting visitors in two by two?
The Ark Encounter must be cleaning up on souvenirs. From an online review:
“We spent $90 in the gift shop and got tons (o)f stuff for my entire family.”
The diorama of humans hunting dinosaurs to extinction a few hundred years ago is probably one of the big sellers.
Hey, I’d love to have a model of this diorama.
I’m curious, I looked around, but couldn’t find a good cite. Where are you getting a 20-40% profit margin from? That seems ridiculously high for any industry.
Also, a business like that, profit margin is very reliant on sales. For restaurants, it is only about 20% of the revenue that goes to fixed costs, the rest goes into controlables, products, and labor. If a restaurant loses half its sales, fixed costs go up proportionally, but labor, products, and contralables can be scaled back.
For an amusement park I would expect that to be the opposite, where the fixed costs dominate, labor can’t be cut by too much without actually shutting down exhibits, there aren’t all that many products to cut, and you can’t really cut controlables when doing so would mean shutting down parts of the park.
And that may be the way that they manage to stay open a bit longer. Not through volume, but through upselling. There may not be as many fundamentalist young earth christians as he thought there would be wanting to come see his boat, but the ones that do are fanatical in their devotion.
Actually I would go see it just for laughs.
Sent from my SM-G950U using Tapatalk
But would you pay the $50 entree fee for laughs, too?
Table at the bottom.
That’s not profit margin, that’s EBITDA.
Which means that it does not account for a significant part of fixed costs.
It is useful in comparing two similar companies to see which is more efficient at operations outside of finance, but once finance is factored in, that cuts into that 20-40% quite deeply. Earnings after Interest, Taxes, Depreciation, and Amortization will be much, much lower.
And the entire point of that paragraph, where it says “EBITDA margins at **successful parks, **regardless of their size, seem to be constrained in a tighter range of between 20-40%.” is that it is talking about successful parks, of which status we are debating whether applies to the Ark.
The idea being, that if you are a successful park, you get to raise your ticket prices until you are profitable. I define success at business in being able to turn away customers, and turning them away by pricing them out while still staying at capacity is the most profitable way. Disney doesn’t need to charge as much as it does to make a profit, they charge as much as they do because they can. They charge the appropriate ticket price to make their park at capacity, and that price point makes them very profitable.
Unless the Ark is operating at or near capacity, raising ticket prices will probably lower revenue. And if they are not operating at or near capacity, they are not one of the “successful” theme parks that your cite is talking about.
Videos taken inside the Ark show long empty corridors with few or no other people in sight.
And videos taken outside the Ark show empty parking lots with few people going in and out.
Are there any Dopers who live in the area and have more to say about this?
I’m going off the site linked above where they’ve been pulling the tax filings every month, though I note a number of complications after digging further:
In any case, some guy from the Kentucky Paleontological Society pulls the Ark Encounter tax filing every month, so yes, the numbers are believable. And reading through the raft of TripAdvisor reviews (4.5 average), people seem willing to pay out a shitload of money…at least once.
I reworked the numbers a little.
Over the past 12 months, they’ve had 847,732 visitors, using the tax data, which is below projections. Jul-Aug 2018 came in below Jul-Aug 2017. Adults are charged $48 each, but youth are charged $25 and younger kids $15. Seniors are $38. Assuming 40% of visitors are adults, 10% seniors, and 50% children or youth, split 50-50 for each. I would think those are optimistic numbers and that children should be weighed heavier. Assume each visitor spends $15 each after subtracting out cost of goods sold. That sums to $40.7 million in revenue and falling.
I don’t know what their labor costs are. But my WAG is that the park will be around for a while. Investors are angel investors. Private individuals can even light their money on fire by purchasing bonds in this venture. They receive public subsidies. Their labor pool is motivated and can be persuaded to take below market wages. Even if attendance halves, I suspect they can still cover their labor costs. You’re in pretty good shape if your investors are willing to take a bath.
Change assumptions: 25% adults, 65% children, 10% seniors. $37.1 million revenue. Huh. Not too different.
Ninja’d
I like the math work you did here, especially because I took the reported tax owed (2.28M, before the state gave 1.8M back in credits), and divided it by Kentucky’s corporate tax rate of 6%, and got $38M in revenue. It’s not clear that there are any deductions in that corporate tax rate, but eh…looks good to me.
It would also be an extremely useful vehicle for money laundering.
