Good morning, ladies and gentlemen. Welcome to the Six Flags first quarter 2023 earnings conference call. My name is Betsy. I will be your operator for today's call. During the presentation, all lines will be in a listen-only mode. After the speaker's remarks, we will conduct a question-and-answer session. If you have a question at that time, simply press star, then one on your telephone keypad. If you would like to withdraw your question, please press star, then two. Thank you. I will now turn the call over to Evan Bertrand, Vice President and Treasurer. Please go ahead.
Good morning, welcome to our first quarter 2023 call. With me is Selim Bassoul, President and CEO of Six Flags, and Gary Mick, our Chief Financial Officer. We will begin the call with prepared comments and then open the call to your questions. Our comments will include forward-looking statements within the meaning of the federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in such statements. The company undertakes no obligation to update or revise these statements. In addition, on the call, we will discuss non-GAAP financial measures. Investors can find both a detailed discussion of business risks and reconciliations of non-GAAP financial measures to GAAP financial measures in the company's annual reports, quarterly reports, and other forms filed or furnished with the SEC. At this time, I will turn the call over to Selim.
Good morning. Thank you for joining our call. I want to introduce Evan Bertrand, our Vice President of Investor Relations and Treasurer. Evan has been our Assistant Treasurer for the last two years, and he has done a great job for us. We are thrilled to promote him to be our Vice President of Investor Relations and Treasurer. Evan, welcome to our earnings call this morning. Today, we will focus on three areas. First, I will provide an update on the progress we have made on our transformation. Second, Gary will provide details on our financial results and our outlook for the remainder of the year. Finally, I will return to discuss why we are excited about our future over both the short and long term. Our team continues to work hard to transform the company as we strive to reach our full potential.
Any transformation begins with a vision for what the company can be. For us, our vision is to deliver a truly exceptional experience for our guests and sustainable profit growth over the long term for our shareholders. The hard work is turning that vision into a reality. The first quarter is seasonally our smallest quarter, but we are pleased with the progress we are seeing. There are five items I would like to highlight that serve as indicators that our transformation is taking hold. First, our guest satisfaction scores are trending upward as guests are responding favorably to the investments we have made in our parks and in our new seasonal events. Second, our Season Pass sales trends continue to improve. Year to date, as of Sunday, April 30th, our Season Pass unit sales are more than double what they were last year over the same period.
Guests continued to respond favorably to our simplified product assortment and the compelling value that our Season Pass products offer. Third, we are proud to report the highest first-quarter revenue in the history of our company, which was driven by record guest spending per capita. That said, we still expect that our per capita spending trends to moderate this year, but we are encouraged that we have gained traction with our pricing programs and that guests continue to spend on our improved in-park offerings. Fourth, our attendance trends continue to improve. While attendance in the quarter was down compared to last year, our results were negatively impacted by adverse weather condition in California and Texas. Excluding the extraordinary weather impacts, we estimate that attendance would have increased by 6% compared to first quarter of 2022.
Finally, I am proud to say that our team continues to stay focused on costs, which enables us to deliver the second-highest first-quarter adjusted EBITDA in Six Flags history. Looking back on the past year and a half since I was appointed CEO, it's clear that 2022 was a year of transition. We rethought our business model from top to bottom, and we tested numerous initiatives. Many were successful and some were not. I'm proud that we were willing to be bold and to challenge the status quo. We learned along the way, and last fall we course-corrected in many areas. The path toward progress never follows a straight line, but we are encouraged by the progress we have made over the past two quarters.
Our focus remains to deliver an exceptional experience for our guests and sustainable profit growth over the long term for our shareholders. We are still in the early stages of our transformation. We are excited about the opportunity to take this company to the next level. I will now turn the call over to Gary, who will provide details about the quarter as well as our outlook for the remainder of the year. Gary?
Thank you, Selim. Good morning, everyone. I will start with attendance, revenue, and per capita spending and then transition to expenses and EBITDA for the quarter. I will finish with our active pass base metrics, select balance sheet items and capital allocation. Total attendance for the quarter was 1.6 million guests, a 5% decrease from first quarter 2022. As Selim mentioned, we experienced unusually cold and rainy weather in California and Texas during the quarter, which we estimate accounted for a loss of 180,000 in attendance based on a five-year average attendance excluding 2020. Adjusting for the weather, we estimate that attendance would have increased by 6%. Revenue in the quarter was up $4 million or 3% to $142 million and was a Q1 record for Six Flags.
This was the result of total guest spending per capita increasing $5 or 7% versus first quarter 2022, partially offset by the decline in attendance. Admission spending per capita increased $4 or 10%, and in-park spending per capita increased $1 or 3%. The increase in total guest spending per capita compared to 2022 was driven primarily by higher revenue from memberships beyond the initial 12-month commitment period, what we call Membership 13+, which includes a portion of revenue that is allocated to admissions revenue and a portion that is allocated to food, retail, and other revenue. Approximately $5 of the admissions spending per capita increase and $1 of the in-park spending per capita increase was due to the higher 13+ membership revenue recognition.
13+ revenue is recognized in the month it is received. It has an outsized impact on the first and fourth quarters as the attendance is lower than in the second and third quarters. Excluding the impact of 13+ revenue, admissions and in-park spending per capita were essentially flat with the prior year. On the cost side, cash operating and SG&A expenses versus 2022 increased by $5 million or 3%, primarily driven by higher advertising spend. As we have previously mentioned, we decided to meaningfully increase our advertising spend this year with a focus on digital channels to support our Season Pass products. Adjusted EBITDA for the quarter was a loss of $17 million compared to a loss of $17 million in the first quarter of 2022, with the increase in revenue offset by higher advertising expenses.
Our active pass base as of April 2nd, 2023 comprised 3.2 million pass holders, representing a decline of 11% versus the same time last year. As Selim mentioned earlier, our Season Pass unit sales are up significantly year to date, but our Season Pass sales last fall were significantly lower than the prior year period. Thus, we entered 2023 with a lower active base. We are closing the gap, and as of Sunday, April 30th, our active pass base is down 4% compared to last year. deferred revenue as of April 2nd, 2023 was $152 million, down $33 million or 18% compared to first quarter 2022. The decrease was primarily due to the lower active pass base as of April 2nd, 2023.
Our improvement in Season Pass sales this year is reflected in the growth of our deferred revenue during the quarter. Our year-end deferred revenue balance as of January 1st, 2023, which was $129 million, grew by $23 million or 18% in the first quarter of 2023. This compares to a $7 million or 4% increase in deferred revenue during the first quarter of 2022. Total capital expenditures for the quarter were $25 million. We expect our full year 2023 capital spend to be approximately $150 million with a balanced approach between exciting new rides, continued infrastructure improvements, and an increased emphasis on implementing guest-facing technologies and amenities in our parks. Our liquidity position as of April 2nd was $224 million.
This included $159 million of available revolver capacity, net of $21 million of letters of credit. Last week, we successfully upsized our revolver from $350 million to $500 million and raised $800 million of eight-year, 7.25% unsecured notes, which we used to pay down $893 million of the 2024 unsecured notes in a tender offer. Over the next 15 months, we plan to use the excess free cash flow to pay down the remaining portion of our 2024 notes in addition to our revolver balance. Before I turn it back over to Selim, I want to highlight a few items to help you think through the remainder of the year.
First, in 2022, our year-over-year attendance trends were consistent with our 2021 attendance trends until mid-June, at which point we began to see meaningful declines that continued to accelerate through the end of September, before our attendance began to improve sequentially in October through the end of the year. This is important as you think about our year-over-year attendance comps. Second, we expect inflationary cost headwinds of approximately 6% in 2023 relative to 2022. While we expect to offset much of these cost headwinds through additional cost savings programs, we are selectively adding back costs that directly and positively impact the guest experience. As a result, we expect to see full year 2023 costs increase by low single-digit percentage versus last year.
We continue to expect our full year 2023 adjusted EBITDA to be higher than our previous record of $518 million of adjusted EBITDA achieved by our core North American operations in 2018, which excludes international licensing revenue. Compared to 2022, we expect this result to be driven by higher attendance, partially offset by lower per capita spending. We expect to grow revenue faster than costs, driving margin expansion. I will pass the call back over to Selim.
Thank you, Gary. There continues to be a growing consumer demand for local out-of-home entertainment, we believe Six Flags sits squarely in the middle of everything a consumer is looking for. We believe the way to capture this demand and optimize profit in a sustainable manner is by continuously improving the guest experience. That will continue to be our intense focus. Our strategy rests on four strategic pillars. First, our park experiences. Second, pricing and products. Third, seasonal events. Fourth, organizational culture. Our first priority is to improve park experiences for both our guests and our employees. The investments we are making focus on the areas that directly impact guests' time spent in the parks, including safety, cleanliness, food quality and variety, speed of service and guest amenities.
As a facilitator of all these priorities, we are currently undergoing an extensive digital transformation aimed at creating a more seamless guest experience, increasing sales through both existing and new revenue streams, and making it easier for our frontline team members to serve our guests. We plan to roll out our new mobile app in June, which will deliver features such as a schedule of events to help our guests plan their day in the park. The seamless ability to purchase and access Flash Passes without visiting guest services. With the click of a button, guests will be able to upgrade from single-day tickets to Season Passes or from lower-tier Season Pass categories to higher-tier options. Interactive maps, features that helps guests navigate our parks. An improved mobile food ordering system, which we expect will help increase the usage of our mobile dining system.
We believe this will help raise our in-park spending because our average mobile food order value is 10% higher that in on-mobile orders. In addition to technology, we are investing more in our infrastructure than we have in any year over the last decade. Our primary focus is on guest amenities, including shaded areas to help guests keep cool during the hot summer months, extra seating options throughout our parks for our guests to sit down and relax, and our new and refurbished restaurants and bars. We are also focused on park beautification and have added flowers and greenery throughout our parks, in addition to lots of paintings of rides and buildings to improve our appearance. We have also introduced new luxurious VIP lounges in several of our parks to allow our most loyal guests to relax in a comfortable environment during the day.
We continue to prioritize investments in food service quality and delivery, and recently hired a new operations chief to standardize equipment and processes, including increased automation and to create a culinary training program in the parks. E-gaming is an exciting new opportunity that we are launching at Six Flags Fiesta Texas in conjunction with our partner, Coca-Cola. Our e-gaming facility is state-of-the-art and a first for theme parks, and the grand opening is on May 20th. We look forward to offering our gamer enthusiasts an outlet in our parks to enjoy alongside our signature rides and other attractions. In 2023, we are making a concerted effort to improve our water park experience. Not only are we adding significant new water rides and attraction with a focus on family-oriented entertainment, but we're also adding new food and beverage facilities as well as expanded cabana seating.
We are excited to launch wristband technology that allows our guests to purchase food and drinks without having their credit card with them. Six Flags offers something for everyone, and our team is particularly focused on adding experiences and amenities that cater to families in addition to our core thrill-seeker guests. As part of our focus on families, we'll be amplifying the IP in our parks, including our exclusive rights to use the Looney Tunes and DC Comics character in our parks. In 2023, we plan to further incorporate these beloved characters into our seasonal events and festivals. Of course, we will always be committed to adding thrilling rides and roller coasters to our theme parks for guests of all ages. One final point on the guest experience. The number one complaint from our guests is ride downtime.
Rides will always be down from time to time due to scheduled maintenance and other safety precautions. We do have an opportunity to improve our own performance. A few weeks ago, we announced that we are consolidating our maintenance and engineering departments and restructuring our operation to make us more efficient and provide greater oversight and accountability for our rides. This will take time to improve, but we know that our guests will appreciate greater ride availability and uptime when they visit our parks. It's worth prioritizing our time and energy in this area. The second strategic priority is pricing and products. Our goal is to deliver a premium guest experience and to charge prices that are commensurate with the value we deliver to our guests.
For single-day tickets, we are piloting a dynamic pricing program in our parks that will enable us to automatically change a specific price point based on demand for that park and that day. If successful, this program will enable us to extend our booking curves, drive yield on our busiest days, and drive volume on our slower days. We believe we have pricing power, but only if we deliver an exceptional guest experience. We have learned that price increases should be gradual and should be accompanied by continuous and meaningful improvements to the guest experience. Our goal is to continue the success we saw last year in improving our guest satisfaction scores across all our parks. If we can do that, then we can increase prices gradually over time. Our third strategic priority is adding quality seasonal events.
Events and festivals drive urgency to visit our parks and provide our members and pass holders reason to visit us multiple times throughout the year. In 2023, we plan to amplify our focus on festivals and events. So far this year, we have introduced several new events, including Scream Break, Tacos and Beer Fest, and Viva La Fiesta, all of which have received positive guest feedback. Looking ahead, our summer schedule includes new events such as Flavors of the World, Six Flags Fireworks Spectacular and Parades. The fall and winter months will feature an enhanced Oktoberfest, Fright Fest, Kids Boo Fest, and Holiday in the Park, amongst others.
In addition to giving guests more reason to visit our parks, we believe our events, in particular, those hosted at night, give guests more reason to stay in our parks longer, resulting in more fun and more value to the guest and increased guest spending per visit. The fourth strategic priority is changing our culture. What I am most proud of is the talented and dedicated team we have built to execute our strategy. We have a powerful combination of internal theme park expertise and externally recruited talent with new skills and fresh perspectives. We are a much leaner and more nimble organization. We move fast, we challenge the status quo, and we innovate. We empower our frontline team members to make decisions that will delight our guests, and we hold each other accountable for performance.
Above all, our team has created a customer-obsessed culture, and this is what gives me the confidence to say we can take our performance to the next level and unlock the potential of Six Flags. I look forward to updating you on our progress as we strive to continue to improve the guest experience and increase our profitability. Operator, at this point, could you please open the call for any questions?
We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jamie Hardiman with Citi. Please go ahead.
Hey, good morning. Thanks for taking my call. Just a point of clarification. Help us walk through what looks like some per cap benefits that you called out as a result of the 13+ cohort. Obviously, the membership pass is something that was discontinued. I understand it, that there were some people that are grandfathered in, but I would have thought that if anything, there are fewer of those Less of those revenues coming in today than a year ago. Help us sort of understand the puts and takes and how we should think about that going forward. Should there be incremental benefits from these shoulder periods from these membership revenues going forward? Thanks.
Jamie, let me answer first the first part of the question about memberships. Memberships are our most loyal guests, and they are in essence, when you reach membership 13+, meaning they've been with you over a year, they are not only the most loyal, they are the most profitable. However, our membership had a lot of perks and a lot of complication of execution in our parks. However, it doesn't eliminate the fact that members by themselves are very loyal and very profitable once you get to 13+.
Yeah. I'll turn it over to Gary now to address specifically the impact.
Yeah. Thank you, Selim. Jamie, what happens is we recognize the revenue on 13+ monthly. As we don't have any new members coming in, we're not ratably allocating that through the year based on visits per park. The dollar impact of booking the revenue of 13+ and almost all of our members are now 13+, has an outsized impact on Q1.
Right. I understand the Q1 benefit-
Yeah.
-relative to the rest of the year, but maybe help us understand versus a year ago, right? I mean, are there more members?
Yeah.
Coming into the system somehow, or what's happening there?
Yeah.
More of them hit that 13-month.
Exactly. Exactly. That's the key, Jamie. You got it. Last year, many of them were still in their monthly payment mode to hit their first 12 months. That's allocated differently. As they get to 13+, it's booked as we receive it.
Okay. It sounds like given the fact that you're not selling new memberships, that the retention rate of those members must be exceedingly high if we're still getting, you know, if the sort of the people hitting that 13-month, you know, anniversary are still greater than the number of people that are dropping out of that membership total.
Jamie, we have not been willing to give those figures on membership. I'm gonna tell you anecdotally where we are. As I travel extensively the parks, I am in the parks almost every weekend. Literally, I am visiting parks every weekend. The number one question people ask me: could you please bring back membership? This is what I receive, and this is what I get. It's something that we're studying and analyzing and evaluating. This is, I can tell you, the number one question, and this is why people value the memberships.
Okay. That's helpful. I guess just, sort of open-ended question, Selim, I'm sure you're gonna wanna talk about this one, but you mentioned how guest satisfaction scores are trending upward. Maybe just give us some more color on that. You know, how much of that is the reintroduction of some of the products that were eliminated? How much of that is just, you know, fewer crowds? You know, the role that events are playing. You know, any color we could get there would be great.
Well, I'm gonna give you two colors. I'm gonna give you a color that happened this specific weekend and a color that's happening online for the last, I would say, six, seven months. Our online postings, specifically in respect of our own internal guest satisfaction scores that we measure, have been very positive. We remain having negative comments about our ride downtime and others, and we're trying to improve that, and we'll talk about that later in the call. Ultimately, people are looking at our cleanliness of the park, about friendliness of our staff, talking about our ease to get into our park, the flow of our food service choices and variety, our amenities.
People talk about the shades, the benches, even though they look simple, but literally, the ability to position those shades, making sure they are all over the park, to make sure where people can sit. We're introducing our VIP lounges. Our guest satisfaction were have gone up. Let me talk to you anecdotally. For the first time, Well, I've been invited in the past, but the first time I decided to attend the annual shareholder meeting of Warren Buffett, of Berkshire Hathaway. I went to Omaha. I did the pilgrimage to Omaha. I was in line. I was all decked out in all Six Flags paraphernalia. I had my jacket with Six Flags, my shirt with Six Flags, I was in line. There was thousands and thousands of people.
I understand it to the record attendance. It was fun to be there. I picked up a lot of tips from those two icons, Charlie and Warren. What is most important, as I was walking the line, almost every person said, "Do you work at Six Flags?" I said, "Yes, I work at Six Flags." They said, "We have cherished memories at Six Flags. We love that brand." I ran into a professor who grew up just a couple of miles away from our Gurnee park in Illinois, and now he is a professor at University of North Florida in Jacksonville. He said, "Selim, my memories of Six Flags are unbelievable." My brother still lives just two miles away from your park in Gurnee, in Chicago. He goes there with his family all the time.
He told me that the parks have gotten better and better and better. Kudos to you, because he understand that I was the new CEO. He said, "Selim, I can tell you, hearing from my brother, the parks are much better, more invested in. Food is better. The ambiance, the vibes are fantastic. The staff is so friendly and welcoming and hospitable. The water park is a lot more better than it's ever been. This made my day being through there this weekend." That's basically telling you where we are.
That's really good color. Thanks a lot, Selim, and good luck.
Thank you, Jamie.
The next question comes from Steve Wieczynski with Stifel. Please go ahead.
Hey, guys. Good morning. As we think about the remainder of the year from an attendance standpoint, Gary, I know in the last call, you kinda called out you were expecting kind of a double-digit attendance growth, you know, for this year. Just wanna understand if you're still kinda thinking about the year that way. Obviously, you had some weather impacts in the first quarter. I would guess that April weather wasn't that great either. You know, should we think about attendance, you know, for the second quarter, you know, as still being up relative to last year, but not that high?
Then, you know, you start to see some significant growth in the back half of the year, and that could still get you into that double digit, you know, kind of growth range for the year.
Yeah. Thank you, Steve. Excellent line of thinking. When I look at our attendance leading indicators, I look at Season Passes, I look at group sales, and both are very strong. We're seeing some really impressive growth that definitely supports what I see as a double-digit growth for the full year. What is interesting compared to Q2 is Q2 was still pretty solid in terms of attendance until, say, the middle of June, when things started to drop off, and we talked about that on our opening remarks. At the Q2 attendance certainly has a chance to be up double digits, but will show really remarkable gains against the third quarter, which will be where the majority of our lifts will be done on attendance. We're seeing...
What is interesting is the Q1 being down 5%, weather-affected. April is up nicely, and May is also showing even greater progress for attendance than April. We're moving in the right direction. Things point to fairly confident on double-digit growth in attendance.
Okay, that's great color, Gary. And then second question probably for you, Selim, but you know, marketing spend. You know, I guess what I'm trying to understand here is how we should be thinking about marketing spending for the rest of the year. It seems like, you know, there's been high correlation here between, you know, marketing spend and visitation to the parks. You know, do you think at some point in the future you'll actually have the opportunity to pull back on marketing with, you know, without impacting or losing attendance?
Excellent question. I think that marketing is sometimes very difficult to measure the impact. We've seen, compared to the testing between last year when we cut back on marketing and this year, that there is a correlation, as you well said, about marketing, media spend, and attendance. We have realized that this year specifically, we are increasing our marketing spend to promote all the initiatives we have. I want to just give a color of all what we're doing very briefly about what's happening. We are, this year, adding a record number of festivals, which we have to promote. Flavors of the World, Viva La Fiesta. We're gonna continue building on Oktoberfest. Summer Night Celebration, which includes fireworks and lighting and synchronized fireworks.
We are also adding Season Pass appreciation calendar for our Season Pass holder. We are adding 20 new food and beverage items that are popular amongst all demographics, especially our young adults, such as mocktails, Korean Corn Dogs, and many, many other things. We also are introducing a brand new mobile app, and we are trying this year with all the initiatives, we're trying to send the word out that there's a lot more exciting to come to Six Flags. It's not only about rides, and in fact, we are investing in more rides and adding more water rides for families. We have more events for families. We are also doing a lot of immersive family events such as Family Bingo, Scavenger Hunt, Eating Pie Contest. All of this happening this year in 2023 makes it very important i ncluding indoor kids play area.
All of this needs to tell people it's a revamped, reinvested Six Flags. This is why we're gonna spend more money this year in marketing to tell about all those things that's happening, all the innovations happening in our parks.
Okay, great. Thanks, guys. Appreciate it.
Thank you.
The next question comes from Ben Chaiken with Credit Suisse. Please go ahead.
Hey, good morning.
Good morning, Ben.
On pricing, I think last quarter, there was a discussion around admission per caps and your expectations for the year implied year-over-year declines. This quarter was up. It was flat, ex the pass accounting. I guess that my question would be, given the traction you're seeing on attendance, your commentary on April and May, have your expectations around price changed at all now that we're a few months into the season? There's some pretty healthy results on attendance.
Thank you, Ben. At this stage, no. It's important to recognize Q1 is less than 10% of our total activity really for the year on, certainly on the revenue side. I think we raised prices significantly last year. Q1 2022 over Q1 2021, we were up guest spending, I think it was about 34%. We're holding onto that. You remove the impact from 13+ and we're flat with spending. That to me says that we're delivering on the value and we've reset the baseline for future growth on attendance and per caps.
Remember.
Okay.
January, we simplified pricing by reducing overlapping confusion. We also made it easier for people to understand our pricing. It was very confusing last year. Also at the same time, we realized one thing very important is we last year pushed pricing a little bit more ahead of our premiumization. We realized that we cannot push rates as high we've done in just a single year. We readjusted, and we're realizing the impact of the adjustment. Our Season Passes have increased, and we're comfortable where we are right now. We also... I'm gonna share with you something that as our Season Pass have increased, we've seen a few things also go out of balance. Season Pass holders don't spend as much money on Flash Passes as single-day ticket holder.
Last year we had a tremendous number of single day passes sold, and that generated a lot of Flash Passes. As we take the mix back away from single day ticket to Season Passes, we've seen our Flash Passes, which are highly profitable, come down a little bit. We have to readjust our business model. It's a lot of learning in the last, most probably 18 months for me and for this team. We are figuring it out and we're very optimistic. I'm not looking at a quarter or two. We have always said that this is a three-year plan. When I took that job, I signed up for a three-year transformation, and we're seeing the impact. We start with the guest satisfaction score. We started to...
How we started learning and optimizing our pricing structure. We are now launching a lot of initiatives that are guest friendly, that will increase the time spent in our parks and the visitation of those Season Pass holder in our parks. We've learned also that technology is a big thing for us, and we needed to revamp our mobile app. I'm proud to say that we have a new mobile app launching in June. We are having a lot of technology happening also that I can talk about now. Gary would like to add something to it.
Yeah. I'd just like to finish up with that. Thank you, Selim. It's excellent. Ben, Flash Passes are also very much a part of attendance, and attendance is relatively light in the first part of the year. As we go into May, we're seeing pretty nice uptick. I still believe per caps, as I said on the last earnings call, will be down modestly. That is more of a function that we raise prices very aggressively, as Selim just said in 2022.
Okay, understood. That's all helpful. Just if I could squeeze one more in. I think you made a comment, I believe, Gary, that 2023 costs are gonna be up low single-digit percentage versus last year, if I caught that correctly. Just to confirm, is that excluding COGS, cost of products sold? Then if you could kind of help us in the context of a growing top line, 6% inflation, can you help us better understand some of the cost offsets?
Yeah, absolutely. One of our most successful initiatives this year has been our procurement strategy. We have centralized procurement here at Six Flags, and our new Vice President of procurement is doing a wonderful job. We're seeing some real gains there. This takes a little bit of time to filter through the financials because most of the activity, of course, is in Q2 and Q3. We are also optimizing our cost structure in relation to what we've done with maintenance. As Selim mentioned, we have maintenance, we have operations, and we have engineering now all under, in general, one leadership at each park. This is providing some efficiency gains there. We're selectively looking at cost optimization strategies throughout the company.
Thank you.
The next question comes from Thomas Yeh with Morgan Stanley. Please go ahead.
Thank you so much. It sounds like from your previous answers that you're happy with the simplified Season Pass pricing strategy. Maybe as we hit the mid-June timeframe and we lap the increases from last year, is there any way to help dimensionalize how the blended pricing on a pass-specific basis kind of shakes out versus last year?
I can just go back to the blended overall look at both admissions and in-park spending. Thomas, we'll be down modestly for the year. I can't easily break it down much more granularly than that.
Okay. No, that's particularly helpful. Yeah, on just in-park spending, being flat ex memberships, maybe help us dig into some of the headwinds or tailwinds there during the quarter. Do you expect to see, you know, continued tailwinds on premium product mix or any signs of consumer slowdown on attachment rates or order sizes or anything like that?
Yes, a good question. It's on a lot of our minds. We're seeing just really good customer appreciation for the value we're bringing. As I mentioned on our call this morning, satisfied might be the word I would use for the being flat to prior year. It's really important to remember we raised prices 34% and offerings for our overall guest spend per cap. Most of that came from the IPS changes. We're lapping some really high comps. I'm satisfied. Now, is the team here sitting and [resting on laurels]? Absolutely not. We have mobile ordering, as Selim mentioned. We have dynamic pricing, we have VIP lounges, we have e-gaming. We've been installing some new premium cabanas.
Lots of initiatives going on that we believe will drive the in-park spending throughout the year.
Okay, great. Just maybe last one for me. Following up on Jamie's initial question about the membership revenue accounting. As we think about 2Q and 3Q, is it right to assume that you saw less non-13+ members over the course of last year? Maybe the 2Q, 3Q headwind related to that particular accounting quirk becomes less of a factor? Going forward in 2024, I would imagine everybody is 13+, and so you start to see less of a 1Q, 4Q kind of shoulder period benefit.
Yeah. It actually, because the attendance, goes up so dramatically in Q3 and Q2, the impact from recognizing 13+ revenue monthly is much more muted. You don't see the upside impact being that dramatic.
Okay. Thank you.
The next question comes from Chris Woronka with Deutsche Bank. Please go ahead.
Good morning, guys. Thanks for all the details so far. wanted to ask your thoughts on how much you plan to use kind of dynamic pricing this year, as you head through the, you know, the peak months and get some more data points on where attendance is shaking out and how weather and other things are impacting you. Can you give us a few thoughts on, where you might stand on using more dynamic, flexible pricing?
Yeah. Thank you, Chris. We are essentially piloting dynamic pricing at three of our largest parks. This begins in July. The impact will hopefully be immediate, there's a lot of work to do to get the dynamic pricing fully developed. It's a lot of data sharing, a lot of data aggregation. As it rolls out and becomes promising, which we believe it will have a nice, a very nice upsized impact, it'll be even more powerful in 2024.
Okay. Thanks. Thanks, Gary. As a follow-up, you know, I know last year you talked a lot about variation in performance by park and some pretty big variations based on, you know, the pricing strategies and other things. When you look at this season knowing that it's still early, but do you think, do you expect there's gonna be a still very wide variation among your parks? Or do you think you maybe do some things that narrow the, you know, kind of the delta between the top and bottom parks?
The investment cycle that we're in really makes a difference. As we invest in our parks in all the areas that Selim has laid out in front of us today, it makes a significant impact in bringing the outliers more towards the mean. Happy with that and I'll take a moment to congratulate our folks. The team in Mexico, they had a wonderful first quarter and great job, guys.
It's a great question. I would like to step in and tell you last year we had a tremendous variation between our parks. Not only between the big and the small, but between the big among themselves also. Even some of the big ones had variation among themselves. I think this year, your question is right on. That's something we've been watching, me and the leadership team and all the park presidents. I think the variation is a lot better this year. We are more in sync. All the parks seem to be in sync right now. We are charging all ahead, all together, much, much more synchronized.
Okay, very good. Thanks, guys.
Thank you.
The next question comes from David Katz with Jefferies. Go ahead.
Hi, good morning, everyone. Thanks for taking my questions. Selim, I wanted to go back to a comment you made earlier on about the number one question people addressing with you when you see them, you know, about membership. Can you just elaborate a bit more on the puts and takes of, you know, how you're thinking through the membership? I think you may have made a comment earlier that, and I wanna make sure I have it right, is that membership people tend less to buy Flash Passes. What are all the issues and, you know, help us kinda understand how you're thinking about that.
I think, first of all, when you think about the membership we had, we had I think four or five membership program. They were very complicated for our park to execute because every members, Diamond Elite, VIP Elite, Gold, I can't remember how many they were. Was very complicated.
Thank you.
For our park frontline employees to honor. It created a lot of friction and a lot of most probably arguments between our most loyal fans and our frontline employees. That's number one. Number two, there were tremendous perks. We could not execute, simply. Either from technology-wide or from ability to execute. They would come in, they had specific area in our park, in the parking that they had to park, specific area up in our amusement park. You should not put strategies that alienate and create friction between you as your loyal guest and you as our frontline employees. It was not working at the end. I can tell you very clearly that our park president will tell you the biggest friction was with our most loyal employees.
Having said that philosophically, we understand that those members are loyal. We understand that they are very profitable. We need to be able to give them the service that they expect, and that we have to build technology, we have to build a way to train our employees to service them well. We need to reduce the simplicity of that. Internally, we are debating reintroducing maybe a membership in the second half of this year, but it's gonna be a very different membership. It's a membership that has a lot of value, and it's something that maybe would most probably be simple, and we can create that satisfaction to our employees. Now, let's talk about certain things that people spend. Single-day ticket holder are also very valuable to us, but they visit a lot less our parks.
However, they pay parking and the attachment rate on single-day ticket holders and Flash Pass, which is a very profitable program for us, is, I don't know, very high. From that perspective, that doesn't happen to be the same with members and Season P ass holder. Why? Because they can come often to the park. They're not gonna keep on buying Flash Passes. Our job is to find other ways to monetize them.
Yeah. David, if I could add a little to that too as well. We really are focused on the mix of our Season Passes, and Diamond is, of course, our highest priced product. To what Selim's point has been earlier, we are really focusing on a Diamond entrance, a Diamond entrance to the park, to go through quickly and to have the VIP lounges.
To be able to give them a special section in our water park, special section in our parks, making sure that they get a special attention, making sure that. That requires two things, training of our frontline employees and technology. We want to wow those members. We want to wow our most loyal fans, which are our Diamond holders, our members, if we ever reintroduce that membership, and our basically Platinum Season Pass holders. Those three categories need to be wowed, and that's why I'm very excited about what we're doing both in innovation, in technology. Single-day ticket holders we have, they will come. They will continue come. They've always come to our park.
Some of them have transferred into buying Season Pass holder, and we have data that suggests that given the friendliness, the amenities, the beautification, premiumization of our park, we have data that tell us that several of those single-day ticket holders have converted into Season Passes to a higher rate than we've had in the past.
Okay. If I can just ask a quick follow-up, you know, given sort of the context of the day, are you seeing any indications or data points or any numbers that suggest any consumer trepidation or weakness or, you know, anything? It's such an odd time as we've been waiting for a year for a settlement to arrive.
Yeah. David, we're wondering when that will happen, if it does. At this stage, our consumer, our guest is spending, and they're strong. They're doing just fine.
Okay. Perfect. Thank you.
The next question comes from Eric Wold with B. Riley Securities. Please go ahead.
Thank you. Good morning. Just quick follow-up question on the dynamic pricing pilot. I know we're early on that, but maybe if you can share some additional thoughts on how wide of a band you might be thinking we could see prices on the high end, on the low end, versus kind of the baseline as you kind of think about where the demand fits in there. Then how do you balance, you know, the desire to drive attendance on the kind of slower days without starting to push up against, you know, kind of guest satisfaction and crowds in the parks and whatnot? Any thoughts would be helpful.
Eric, on the dynamic pricing, I think it's still too early to be able to make some predictions as to the impact. If I was an airline, it would be a little bit easier. As the consultants we're working with, it certainly is promising. I think that's something that we can talk about on the next quarter.
I can address a little bit your balancing attendance and guest satisfaction. We have basically told from the day we've joined, we have data that tells us that our parks will always be agreeable to our guests within that 25 million-27 million guests a year. We're still striving to get to that number, and that's where we are trying to achieve. Last year, we ended up in the roughly in the 20+ million, and we are now climbing back up to go up towards that 25 million-27 million.
Yeah. Eric, I really believe in this strategy that we're on because it's a better experience for our guests at $25 million rather than in 19 I think we had $33 million or darn close to it. It's just too crowded. When you go that model with you want a lot of attendance and less on the per cap, again, the experience is not what we're after. I'd much rather have $25 million at a higher per cap. That's where we're headed strategically.
Helpful. Thank you both.
The next question comes from Barton Crockett with Rosenblatt Securities. Please go ahead.
Okay. Hi. Thanks for taking the question. I wanted to just understand a little bit better this calculation of the weather impact. You said it would have been up 6%, was down 5%. You know, I think a lot of it, these dates were disrupted by weather. I know, Cedar Fair said 30% of their days were disrupted by weather, and that's, you know, mainly Knott's Berry Farm in L.A. I know that if it's rainy on Saturday, a lot of people will not go on Saturday, they'll come on Sunday. There's a risk of extrapolating from the good weather days that, you know, may be benefited by the bad weather days. I'm just curious if you could explain how you came up with that, you know, so we can get, you know, make sure we're comfortable with it.
Yeah. I'll throw a little humor out there. If it rained on Saturday in California, it also rained on Sunday. It was a rough quarter. What we did, Barton, is we compared to a five-year average of what the attendance would be with normalized weather, and we compared it against that metric and came up with our math. April supports that directional that we have given.
Okay. Well, you know, maybe we can follow up more offline. In terms of, you know, talking about April, I'm just curious, what is April and early part of May, is that weather impacted, or is the weather okay? Are you seeing the Season Pass base continue to kind of grow?
Yeah, the weather in April, I haven't followed directly. So I'm, I can't comment on that. It feels like year-over-year was somewhat normal, at least for us, in that regard. What was the second part of your question? Sorry, Barton.
Okay. Season Pass based on-
Yes. Yes.
Yeah, what's happening?
Yeah. Yeah, very strong versus the prior year.
It's continued to grow in April, year-over-year and sequentially versus March?
Absolutely. Yeah. Into May.
All right. Then, just one final thing. you know, this comment that you can consolidate the maintenance and the engineering, save money, and improve the performance of downtime with rides, doesn't necessarily, you know, wonder about that because it seems like cost saving, yet you're talking about improving the performance. I was wondering if you could kind of flesh that out a little bit. I mean, how is it that you can be more efficient and yet improve the ride performance?
Yeah. Really good point, and it's actually why we did it. We have had traditionally in our parks operational silos, and so maintenance would be separate in leadership from operations, and operations would be separate from engineering. They really need to work together to give the guest the best experience in the minimal downtime. Then what we're also doing is we're combining that effort, and I'd really call it coordinated effort under one really excellent leader with the CapEx investment that's going into the rides where we renovate the drive systems, we renovate the control systems, when we provide new trains. You put all that together, and we get a really nice, I believe, lift in or I should say, reduction in our downtime.
It's not about reducing the heads out in those departments. It's about getting them to work together and to delivering the best experience for our guests. We believe this will have a positive impact.
Okay, great. Thank you.
You're welcome.
This concludes our question and answer session. I would like to turn the conference back over to Selim Bassoul for any closing remarks.
Yes. First of all, I want to thank you all for your continued support. We have one of the most iconic brand in the U.S., as witnessed during this weekend as I was waiting in line and everybody approached me to tell me how much they love Six Flags. We have not kept pace with brand building in the past few years. Our innovation was lacking. Our guest experience was average at best. Our parks were under-invested in terms of infrastructure, technology, and guest amenities. Today, we are pushing more events and more interactive family initiatives to getting our guests to spend longer time in our parks and to increase Season Pass holders' visitations per year. As the world's largest thrill and regional theme park company, we are back adding more exciting rides to our parks and water parks.
We have increased the annual CapEx budget for the company to a record number in 2023, 2024, and 2025. We are investing in our park to become more kids and family friendly. We are boosting our R&D on technology. We are increasing our marketing and media spend in 2023 to promote all those initiatives, and let me remind you what they are. We are basically rolling out several festivals such as Viva La Fiesta, Flavors of the World, Summer Night Celebrations, Oktoberfest, Boo Fest, in addition to our Fright Fest and Holiday in the Park. We are launching family coasters. We are putting kids slide and play area in our water parks. We are building kids indoor play area.
We are launching for the first time an all-day dining. That all-day dining is different than our seasonal pass dining, which has higher cap than our regular food service. It's something that our customer and single-day ticketholder have asked. We're adding parades and dazzling fireworks with lights and music, synchronized music in the evenings. We are launching trendy food items such as Korean Corn Dogs and mocktails and more. 20 more items coming. We're adding interactive family entertainment shows such as Granny's Garden Challenge, Pie Eating Contest, Family Bingo, Scavenger Hunt, among others. We are revamping our merchandising offerings. We are leaning more heavily in ride-specific merchandise, something our guests have been asking for. We are also introducing a host of new merchandise with posters, toys, train models, and apparel with higher quality fabric and more trendy designs.
We are launching our new mobile app this June. We are so excited about that. It will make it easier for our guests to navigate our parks, less friction. We are putting in QSR touchscreen order stand to take out wait line, to reduce wait line for our guests, similar to what you see at the fast food chains. Such as McDonald's and Taco Bell. We are rolling out our Roller Coaster Coffee stores across the chain, offering hot drinks, cold brew, as well as baked goods, including themed baked goods, which guests can relax into. It create impulse buying opportunity for our guests. We are launching, and we've opened several of our VIP lounges with all the bells and whistles that guests will love. I could not talk about this without talking about those initiatives, without starting with our employees. They are the foundation of our culture.
As a leader, I try to build on that. We take care of our people so they can take care of our customers, and the rest take care of itself. Our people show up every day, they are working hard to improve the guest experience, to make our parks cleaner, friendlier, and more beautiful. We all work hard to reduce friction and to make us easier to do business with, smoother to navigate our parks. We are not all there yet, we have made steady progress in our front gate, in our restaurants, in our parking. The beauty of what happened this past year is the great working collaboration amongst our team. This has never been like this at Six Flags. It was always heavily tilted toward corporate decision-making. Now it is more balanced.
With our parks being able to make more local decisions, it is beautiful to see. I am proud to say that most of our employees today are acting like owners. Thank you. I hope you can come and experience all the new infrastructure changes, the technology improvement firsthand, and hopefully this summer you come and celebrate with us our summer celebration, our Flavors of the World. We welcome you. Thank you.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.