U.S. Business

Fatal Six Flags accident may limit summer crowds 

July 22, 2013 at 3:21 PM ET

Image: Texas Giant roller coaster ride
LM Otero / AP
The Texas Giant roller coaster ride sits idle in the foreground as people take in another ride a the Six Flags Over Texas park Saturday.

A fatal accident on a roller coaster at Six Flags Over Texas may cause consumers to rethink a trip to the amusement park—or any amusement park—this summer. But it's unlikely to keep people off roller coasters in the long term.

Six Flags has said it is investigating the death of a woman who fell from its Texas Giant roller coaster Friday. On the company's second-quarter earnings call Monday, CEO Jim Reid-Anderson said the ride "will remain closed until we are certain it is safe to ride."

The park, in Arlington, Texas, has not seen any immediate effect on attendance.

"History in this industry would suggest there is a lag in reaction time after an accident," Reid-Anderson said. "There could be a short- to medium-term attendance impact at the affected park." He declined to comment on any future financial impact, saying that executives would have more information for the third-quarter earnings call.

Serious incidents often prompt more consumers to stay home for a while or, if they attend, reassess which attractions they take in, said Nima Samadi, a senior analyst with IBISWorld. The effect is more pronounced at the park where the accident occurs, with some ripples to sister parks and to competitors.

Regional parks, which attract primarily local, drive-in traffic, are more likely to get smaller crowds. "Those visitors—it's a lot easier for them to reconsider," he said.

Video: “Six Flags Over Texas” is conducting its own investigation into the death of a woman who was thrown from the world’s steepest roller coaster on Friday. But government regulators are not investigating the incident, because no federal agency has the authority to. Amusement ride safety inspector Ken Martin joins NewsNation to discuss the safety concerns surrounding the 17 states that have no government oversight of amusement park rides.

Destination parks such as those operated by Disney Parks & Resorts probably will see less of a decline because travelers' fears don't usually outweigh the cost of changing plane tickets or forgoing a planned vacation, Samadi said.

Consumers tend to return to parks quickly, however, because serious accidents are rare, said Michael Broudo, an equity analyst and managing director at Miller Tabak. "Longer term, people will be persuaded that parks are safe," he said.

In 2011, reported ride-related injuries totaled 1,415, according to a joint report from the National Safety Council and the International Association of Amusement Parks and Attractions. Of those, 61 were serious enough to require overnight hospital care.

According to the NSC's assessment, the chance of being seriously injured on a ride at one of those parks is 1 in 24 million, and the chances of being fatally injured is 1 in 750 million. (In comparison, the odds of being struck by lightning in a given year are as low as 1 in 500,000, according to the National Weather Service.)

It's tough to assess the true bearing of an accident on attendance, according to Broudo. Factors like the slow economy, high gas prices and bad weather have greater sway over the number of visitors.

Video: A 52-year-old woman was thrown from the "Texas Giant" ride at a Six Flags in Texas, resulting in her death, reports CNBC's Jackie DeAngelis. Bill Avery, amusement industry safety consultant, weighs in.

"If there's a drop in attendance, do we know it's related to this or anything else?" he said.

Accidents may not noticeably shift company performance,either. In 2007, for example, a teenager lost both her feet while riding Superman: Tower of Power at Six Flags Kentucky Kingdom. The company saw attendance rise 0.2 percent and revenues rise 3 percent, to $972.8 million. Attendance and revenue gained 2 percent and 5 percent, respectively, in 2008, the year in which a teenager was decapitated by the roller coaster Batman: The Ride at Six Flags Over Georgia.

On Monday, Six Flags also announced record-high revenues of $451 million for the first half, up 2 percent from the year-earlier period. Attendance was up 1 percent, to 10.7 million guests.

"I am pleased with our record year-to-date financial performance, despite cooler temperatures and unprecedented levels of precipitation at our Eastern and Midwestern parks during the second quarter," Reid-Anderson said on the earnings call. "Our exciting new attractions and all-time-high guest satisfaction ratings have propelled our performance to new highs."


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