Selim Bassoul took over as CEO of Six Flags on Nov. 15th, 2021. At the time of his taking over Six Flags, Stock was up 19 percent over that year. Not even a year later under his management, he has somehow been able to cut the stock price in half! There are many factors that have led to this.
Selim Bassoul made a lot of changes.
Selim Bassoul took over and announced big changes were coming to Six Flags. First, he did away with the popular Membership plans. They allowed people to pay for their pass on a monthly fee instead of all upfront like with a Seasons Pass. Next up he abolished the Meal plan option that allowed people to pay for a plan that allowed them to eat for free while in the park. The Memberships and the meal plans were very popular and their abrupt end had an effect.
While ending those programs he added his own programs. A series of very confusing Season Passes and meal packages. The passes offered less value and cost more. The Meal packages allowed you to prepay for some meals in the future for a slight discount. At a time when there is a lot of uncertainty about the world and an economic downturn was happening, he decided to raise prices and offer less value. The result was less attendance at the parks.
Selim Bassoul Blames all the issues on anyone but himself.
Attendance went down by 21.2 percent and caused their stock to act like a B&M dive coaster and plummet. On a call with investors, Selim Bassoul gave just about every excuse you can imagine on why the company is having such a stark downward turn. Selim Bassoul even claims they wanted less people in the parks but they overshot it some What a short-sided way to run a theme park empire.
More guest means more revenue. More revenue means more ability to invest. Lines in parks are long when all the rides are filled up, and so guests just choose which long line they are willing to put up with. Having more guests in your park brings in more revenue. That gives an opportunity to build newer and more exciting rides. Which of course will only drive more guests to your park to experience the new investments. Not understanding this concept alone makes him unfit to manage Six Flags. That and he doesn’t like roller coasters! Okay, that isn’t enough reason to fire him but his dislike of investing in new roller coasters is.
Can this be fixed?
Yes, but time is running out!
Step one: If you want to raise prices then you need to do it slowly. This overnight-business-model-change was half-baked. Most would be glad to pay extra if new roller coasters and better experiences were on the way.
Step Two: Make a commitment to your guest that investments, and yes, new roller coasters are on the way. Next year attendance will be way up at Worlds of Fun when their new coaster opens. You need excitement at a park to get guests through the turnstiles One thing is sure, charging more, and having no future investments on the way will not work.
Step Three: Bring back Memberships and Dining Plans. They should have never been removed in the first place.
Step Four: Either Selim Bassoul starts acting like someone who likes and understands why people go to theme parks or he needs to be let go. When you hear him talk it is clear that this is just like any other business and can be treated just like he ran Spirit Airlines. A CEO of a theme park should never be quoted saying things like “I’m migrating a little bit from what I call the Kmart, Walmart to maybe the target customers.”
Final Thoughts
The CEO before Selim Bassoul was a guy named Mike Spanos. He kept the company afloat and even thrived some during about the worst time to be doing business in the US since the great depression. Investments came and good value for the product being offered was the mode of business. He also never said things that would get him fired if he wasn’t the CEO. Another great quote from Selim Bassoul is that “we became a daycare center for teenagers.” No one should be talking about their customers like that and keep their job.
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External Links
Six Flags (SIX) Q2 2022 Earnings Call Transcript | The Motley Fool