Operator: The next question comes from Chris Woronka with Deutsche Bank.
Chris Woronka: Question on — as you look at your portfolio parks, would you say that the top to bottom, are these parks getting closer together in performance in terms of year-over-year growth? Are they getting further apart? So not asking about specifics really but just kind of rank ordering. Curious as to how that’s going the way you guys look at it.
Gary Mick: We don’t really give out individual park performance metrics, Chris, at this stage. But Selim’s vision and strategy has been applied equally across all parks and it has certainly responding. Each park has a different demographic, each park has a different locale and a different appeal and different ride package. But yes, they are — they are moving in the same direction.
Chris Woronka: Okay. All right. And then as a follow-up and it’s not a merger question but as mentioned, Cedar Fair. I know that one of the things they talked about heading into the season was kind of adjusting some of the operating days and even the hours. And I know you mentioned, your days were roughly flat in Q1. Is that something you consider as we move into through shoulder season into prime season, should we expect any changes in your operating days or hours?
Gary Mick: We don’t have anything published at this stage, Chris but we will always look at a day as to whether it’s EBITDA accretive. But the other thing we look at is our events. And last year, we talked about this on our third quarter earnings call where we executed a significant number of new events. And this year, in Q2, Q3 and Q4, we’re going to focus on EBITDA accretive, ROI-accretive events and so we should save some OpEx.
Operator: The next question comes from Thomas Yeh with Morgan Stanley.
Thomas Yeh: I appreciate all the puts and takes on the per cap. Gary, I think you mentioned in-park, continuing the same kind of directionally in terms of growth into April and May. So maybe just to put a finer point on that. If we strip out the $10 million headwind from membership revenues, should we think about kind of the organic per cap growth? You did 3% this last quarter in 1Q. Is that still kind of holding up in that zone through the course of the year?
Gary Mick: Great question, Thomas. Yes, I think that’s fair to say and it’s more meaningful in Q3 and Q4.
Thomas Yeh: Okay. Great. And then I think you cited the 4% cost inflation. Is that inclusive of essentially what your view is on the impact you’re seeing from the minimum wage increases for the parks that are opening back up? And should we kind of think about labor costs generally moving in that direction, offset by potentially some efficiency initiatives that you’re kind of putting in place?
Gary Mick: Yes. The 4% is a blended overall average which includes the wage rate increases and it also includes merit increases for our full-time staff.
Thomas Yeh: Okay. Awesome. And maybe just to squeeze one last one in. On the Active Pass Base, can you maybe just elaborate a bit on that dynamic that you mentioned about the annual pass comparison sold in ’22 versus not in ’23? Is that revenue timing headwind that’s impacting the cadence of quarterly revenues in a meaningful way? How should we think about that as it translates into your revenue recognition?
Gary Mick: The annual passes, Thomas, were included in the last year’s deferred revenue. So they certainly contributed to prior year’s revenue stream and they won’t this year. So that helps the correlation between Active Pass Base and deferred revenue.
Thomas Yeh: So to the extent that you’re kind of seeing it flow through into other pass sales, you presumably — the timing of the season pass sales kind of makes up for some of that over the course of the year? Is that how to think about it?
Gary Mick: Yes. I think that’s exactly right. And I’ll follow up a little bit with the 13-plus. I mean it’s a lot of noise, right? It’s a time-based revenue recognition as opposed to a visits per pass active with the parks open revenue recognition. But essentially, it’s nothing more than a season pass. And so to make up for the 13-plus, we sell more season passes. And that’s how that will all balance out.
Operator: The next question comes from Lizzie Dove with Goldman Sachs.
Lizzie Dove: Just wanted to go back to attendance trends. I think excluding the 90,000 benefit in the first quarter, it grew around 1%. And so I just want to kind of get a sense of what’s the right exit rate to use here? Mexico is a big piece. I think some of the parks opened a little earlier. Your pass units are also up to double digits. So just kind of, what’s the right kind of underlying excluding these kind of puts and takes rate to use going forward?
Gary Mick: Great question, Lizzie. It’s a complex equation, right, with many, many, many elements in it. I certainly think that the full year has a meaningful lift of attendance. Based on what we see on our season pass sales trends, the group sales, I mean all the rides that we have coming in, we talked about the media. Exactly how that ends up is a function of many things, including weather and the economy and other things we can’t control.
Lizzie Dove: That makes sense. I guess to kind of follow up. James mentioned the 1.5% headwind in 2Q with the calendar shift. But you’ve got an important, call it, 6 weeks to play for with volumes going up. Do you think there’s a chance that you can grow in 2Q and make up for that headwind that you’ve got or kind of too early to say at this point?
Gary Mick: It is too early to say at this point, Lizzie but yes, there’s a chance. It all depends on — we have the meat of Q2, when you take April out of the equation, 85% of our active volume is in the next — is in May and June. And we’re set up very well for May and June to be good. But as you know, the parks are frequently open on the weekends for the first, let’s say, 3 weeks of May before we go into full operation. And if it rains on those weekends, that’s always a challenge. But assuming normalized weather, per cap lift is possible, yes, it is possible.
Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Selim Bassoul for any closing remarks.
Selim Bassoul: Thank you for being with us on this conference call this morning. I think we have laid the ground work for profitable growth in 2024. This is a year we’re very excited about. Our solid 2024 pass sales up double digits, both in higher units and in pricing; the higher mix, I’ve just mentioned, me and Gary, about the mix of diamond and platinum, the higher all-season dining and FLASH pass, our group sales, now near pre-pandemic levels, 20% above last year so far; strong in-park growth, record first quarter IPs [ph], 5% underlying per cap growth, new immersive experiences, glamming a lot of rides coming up and the best Fright Fest ever with brand new IP that are amazing. I think the next phase — we start — we kept on talking about originally the premiumization in part of our transformation.
And premiumization has most probably helped us be where we are today. But the second phase is reinventing the customer journey, engaging guests before, during and after park visit. And we’re doing a lot of all of this through technology. Nearly half of our guests now are using our speedy gate, a very innovative technology. Our self-serve kiosks streamlining operation and expanding it into retail. We are driving IPs [ph] seeing growth in nearly all our revenue channels. We believe we can grow attendance and per cap this year. We have a continued underlying price growth in admissions and IPs [ph]. We are raising the bar. We are focused on families, appealing to all ages. Thrills have no age or know no age. People are staying longer, as I mentioned, in my example, where people at 7:00 p.m., 3/4 of the people came at 11:00 in the morning are still in our park.
Rides and attractions geared to all members. We invested a lot in our kids area and now we are upgrading our big rides. And now we are also putting water structures and slides in our water park. It took some time. We spent a lot of money in the first 2 years making sure that we’re providing shaded structure, VIP lounging, gaming houses, cooling system, better restaurants; and now we are going back to what’s our core making sure that our rides and our slides are better. Our new technology, making it easier to do business with. Our digital wallet, our Gen AI planning, our easier website to navigate. We are putting a lot of amenities in our park infrastructure. And at the end, to make a memorable experience, it’s all about convenience, value, ease of doing business and premiumization and personalization of experiences.
Again, making memorable experiences are very simple. We want to provide a convenient way to do business, want to provide value, want to be easy to do business with and we need to personalize and customize premium experiences. On behalf of the Six Flags team, we appreciate your continued support. Have a great day and we look forward to seeing you in our park this season. Thank you. Bye-bye.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
