Amusement is serious for plain-spoken CEO
8/20/2005SANDUSKY - Mulling over what to do about a dud of a roller coaster named "Avalanche Run" in his fourth year as Cedar Point chief executive officer, Richard Kinzel decided to go Disney.
Burning through $4 million in cash, the amusement park created a Disney-like theme - a calamitous mission to Mars - inside a building erected around the ride.
When the coaster, named Disaster Transport, made its debut in the spring of 1990, riders were unimpressed.
" We had a dog ride in a garage," Mr. Kinzel recalled with a hearty laugh in a recent interview. "That ended my theming."
Nearing his 20th -and second to last - season as head of parent company Cedar Fair LP, Mr. Kinzel is not afraid to discuss missteps.
"If everything in general is successful you can laugh at your mistakes," philosophized the amusement park chief, who is a product of Toledo's Catholic school system.
At 65, he has spent most of his working life at Cedar Point. He and his wife, Judy, live just outside the park entrance in a home built on the Lake Erie peninsula on lots purchased from Cedar Fair in the mid-1980s.
Although 2005 has not been without headaches, Mr. Kinzel has assembled a healthy string of accomplishments over the past two decades.
Under him since 1986, Cedar Fair has gone from a pair of regional amusement parks to a $542 million empire. Its dozen parks stretch across the United States from the east to the doorstep of Walt Disney's Magic Kingdom, which in the 1950s gave birth to a new style of amusement park that once threatened to snuff out traditional ride parks like Cedar Point. Knott's Berry Farm, in Buena Park, Calif., near Disneyland, was acquired by Cedar Fair in 1997.
With a series of ever higher coasters, the Ohio firm helped define a new category called thrill parks. In 2003 Cedar Point broke through the 400-foot threshold with Top Thrill Dragster, which reaches 420 feet and top speeds of 120 mph.
Meanwhile, the firm's publicly traded partnership units have paid owners a steady 5 to 6 percent annually for years.
In some ways, the CEO is a study in contradictions.
He marvels at the advanced technology that propels the park's 68 coasters and other rides but has never used an automatic teller machine. His musical tastes lean toward the Beach Boys, but he is clearly mesmerized watching a young rock act pump out a version of the Van Halen cover tune "Jump" in a Western-themed saloon where can-can girls once danced.
And although he helps others enjoy their summer vacations, he has never taken one. (To be fair, however, an Eastertime trip to Florida or another warm place is a family tradition).
Strolling the grounds of Cedar Point on a recent weekday, the CEO stooped down to pick up wrappers and a cigarette butt. As he talked about the amusement park business, he was forced to speak above the park's roar - screeching steel and coaster riders blending nearly indistinguishably.
"We leave theming to Disney," he said. "It's very, very expensive. We can't justify it, being a seasonal operation. Our theming is the ride itself. You walk under the ride. As you enter the park, you see the ride in operation."
He and other company officials are struggling to identify the reason for a 4 percent drop in attendance, through July 31, at the firm's flagship park. Overall attendance at Cedar Fair's seven amusement parks and five water parks, which attract about 12.5 million visitors annually, was down 2 percent. Weather was a problem in some places.
But that is not the case here, where skies have been sunny. The decline in Cedar Point attendance follows a 4 percent weather-related drop last year, when 3.2 million people passed through the turnstiles. (Attendance peaked at 3.6 million in 1994).
Last year, profits slipped 10 percent to $78 million on higher revenues of $542 million.
Mr. Kinzel flatly rejects the suggestion that middle-aged and older people are staying away because of the park's emphasis on coasters and other thrill rides.
"Even though a lot of our marketing dollars are directed toward the thrill market we still have a variety of shows and filler rides and round rides anyone can enjoy," he said. "The landscaping and live shows are fantastic."
Still, marketing is aimed at people 12 to 32 years old, and park officials make little attempt to go after the senior market on the belief that most elderly people stay away because of the amount of walking involved.
The struggling economies of the park's prime markets, which include Ohio, Michigan, and Indiana, are believed to be major factors.
Although up to now officials have discounted the impact of rising gasoline prices, a new survey suggests they may be more important than initially believed. When queried by an outside firm, 15 percent of respondents in Detroit and Indianapolis - key markets for Cedar Point - who hadn't visited a park this year cited fuel prices.
The top response, however, was "no money" followed by "family reasons."
In the past, Cedar Point touted itself to investors as "recession proof," saying that in tough times, people forgo vacations to distant locations in favor of nearby attractions.
But that hasn't proven true this year, Mr. Kinzel acknowledged. Still, said he doesn't believe prices are too high. Although admission for adults and most grade-schoolers is $45, parking is an additional $9, and a snack as simple as a soft pretzel is nearly $4, he said prices are on par with those of rivals.
Among other problems this year is Cedar Fair's $145 million-plus investment in Geauga Lake & Wildwater Kingdom, southeast of Cleveland. The firm bought the attraction last year after a failed attempt by Six Flags Inc. to merge a traditional 19th-century amusement park and an adjoining animal park known as Sea World.
Cedar Fair closed the animal park and opened a new water park in its place last year. Still, the property has been a drag on profits.
Mr. Kinzel is not ready to concede defeat, however, saying, "The mistake there is that I overestimated how quickly we could turn it around."
Cedar Point continues to experience problems with the $25 million Top Thrill Dragster. It has had all-day shutdowns six times this year, compared with 10 times in 2004, spokesman Robin Innes said.
The coaster was down for several hours the day a Blade reporter visited.
Spotting Mr. Kinzel touring the grounds, a young man commented to a friend in a stage whisper that was more of a stage scream: "The Dragster would be great if it worked!"
"I hear you," the Cedar Fair CEO replied good-naturedly.
Rick Munarriz, a Cedar Fair shareowner and analyst for the Web-based investment advice site Motley Fool, praises the longtime CEO.
"He's about as good as it gets in the amusement park business," Mr. Munarriz said. "You have to admire someone who started out as a lowly seasonal hire and worked his way up the chain."
Still, he said the normally well-run company stumbled this year. The firm's focus on affiliated developments like Castaway Bay, an indoor water park in Sandusky, appears to have distracted executives from what should be their core mission: attracting park visitors.
Mr. Kinzel grew up in the Willys Parkway area of west Toledo as the son of a bar proprietor. He graduated from Central Catholic High School in 1958.
He joined Cedar Point in 1972 as a food supervisor after working 10 years as a manager with Toledo's Canteen Service Co.
After 15 years at Cedar Point and Valleyfair in Minnesota, he was named head of the parent company in 1986.
He assumed the additional title of chairman in 2003. Despite Cedar Point's attendance problems, he predicts sales and profit will rise this year.
Factors include strong performance by the firm's water parks, increased spending on food and games by amusement park visitors, and the success of affiliated restaurants and motels, especially Castaway Bay.
Securities filings show that as of Dec. 31, he owned individually or jointly 551,310 partnership units of Cedar Fair worth $17.1 million at the trading price of about $31.
In 2004, he was paid $1.3 million in salary and bonus, according to securities filings.
As Cedar Fair has grown, Mr. Kinzel's management style has changed. Day-to-day management is now overseen by Jack Falfas, appointed to the newly created position of chief operating officer on April 4.
Mr. Falfas, who is Mr. Kinzel's heir apparent, was formerly director of West Coast operations.
Mr. Kinzel said he still enjoys riding the park's coasters, but concedes that his stomach will no longer tolerate spinning rides.
He calls himself a "hands-on" manager but adds: "I concentrate my efforts on where the problem is and if there is no problem I stay out of their hair."
He is working seven days a week now.
But with the 2005 season winding down, so will the pace of daily activity at Cedar Point, especially with the gradual departure of 5,000 seasonal employees.
After Labor Day, the park is open on weekends only through Halloween.
"The nice thing about this business is that Labor Day comes," Mr. Kinzel said.
"And when Labor Day comes, you know the next day you can take off. It stops. It's the end of the season and nothing's going to change it."
He is scheduled to retire in January, 2008 but will stay on as non-executive chairman for a time.
After retirement, he will spend time at his condo in Naples, Fla., but won't move there permanently because he and his wife want to stay close to their four children and seven grandchildren.
"I'm not sure what I'm going to do, but I'm going to join Jimmy Buffett and we're going to look for our lost shaker of salt," he mused.
Contact Gary Pakulski at:
gpakulski@theblade.com
or 419-724-6082.