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Fearing Carnival Consolidation, Canada's Western Fair Inks 10-Year Deal with NAME

10/27/2014

By Timothy Herrick

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Another midway has lost its independence. 

Western Fair in London, Ontario announced last week they signed a 10-year contract with North American Midway Entertainment (NAME) to be the sole Midway provider. The Western Fair was first held in 1867, and the independent midway is at least four decades old.

In 2104, the Western Fair midway featured 50 rides and 35 games, contracting with about six ride operators, including NAME.

"We are very excited to bring our presentation to London and the Western Fair" said Tony Diaz, President of North American Midway Entertainment upon the signing of the new agreement. "We have been involved with the Western Fair for years, and we've built a relationship with them. In 2015 we are bringing many new rides that have never appeared at the Western Fair before."  
  
Consolidation Concern
According to Hugh Mitchell, Chief Executive Officer, Western Fair District, the decision to relinquish independence had less to do with the present, but the future. Current industry trends indicate that the carnival segment of the fair industry becoming populated by fewer and fewer players. "The independent midway has worked quite well and we have a great relationship with the carnival operators, but we saw growing consolidation in the industry," said Mitchell. "We are looking at stability and consistency in the future," 

Consolidation is not unique to the amusement ride industry - many economists and business observers theorize that gravitating towards fewer players is the natural evolution of most industries - but from Mitchell's perspective, committing to one midway provider for an entire decade, protects the Western Fair from possible disruptions due to shrinking pool of carnival operators. "A long term contract give us economies of scale," said Mitchell. "We can work with the operator, give them the assuredness of our site for ten years, they have the security to reinvest in their equipment. Ultimately, that will maximize and optimize our midway and give a quality experience to our customers."

He added, "it was a difficult decision, but it is a business decision. There are fewer and fewer operators able to reinvest in their equipment and buy million dollar rides." 

In recent years, consolidation trends had already affected the Western Fair midway. Ten years ago, the fair was contracting with 12-14 operators, more than twice the number of contracts in 2014. "Canada is a smaller market and we looked at the number of our major fairs," said Mitchell. "Our concern is not 2014, but will we be able to have enough choice of rides in 2024?"

While the issue of accelerating consolidation has been discussed internally by the Western Fair District organizers for a few years, one incident this year crystalized the potential dilemma of multiple ride operators. Three weeks before the fair, a provider had to cancel and the fair had to scramble to fill in the gap. "We have a 10 day event, and the smaller operators are finding it harder to come to some fairs," said Mitchell. "The smaller fairs are also finding it difficult to find ride operators to do their dates, and operators are being squeezed by costs. Labor costs, cost of transportation, safety issues, costs are going up. It is harder to continue without some guarantees."

Smaller ride operators are finding it challenging to cope with theses costs. For the fair, especially with labor costs, some savings from going to a solo-operator midway are expected. "There will be a reallocation of labor," he said. "We will no longer need a Western Fair Midway manager to coordinate the midway. Savings was an element of the decision, but they are small savings and the primary decision was looking ahead, how can we can make sure the midway operations is provides consistency and quality, and adding new rides to the mix." 

Improved Service
In addition, going with one ride vendor potentially provides an enhanced customer experience. "With one supplier, it is a single look, everything is colored coordinated, and there's consistency from one ride to the next," he said. 

Diaz speculated that while there may have been some advantages to an independent midway,  "what finally enticed them to one operator midway was the customer service, the safety department, the guest services, and the uniformity of all the staff you can get with the company," said Diaz. "They did their due diligence, and they were happy with they saw."

Now that the deal is completed, Diaz said both parties are "taking a look at a fresh layout and we are working other on a master plan of future development and a newer look." 

The Western Fair also fits into NAME's existing Canadian touring schedule, which includes: The Calgary Stampede; Edmonton K-Days; Saskatoon Prairieland Exhibition and the Canadian National Exhibition in Toronto. North American Midway owns 200+ amusement rides and operates five Midway units, covering five Canadian Provinces and 20 U.S. states, providing Rides, Games and Food to approximately 15 Million fairgoers every year. 

New Rides
"We are committed to the Western Fair and are comfortable with the length of the contract," said Diaz. "We have been producing family friendly events in Canada for the past decade and our clients are very happy."

Diaz said that new for 2015 Western Fair will be the a Blitzer Roller Coaster; Niagara Falls Water Flume Ride;  a 110-Foot Giant Ferris Wheel;  Mega Drop Tower and Mach 3 ride. "We are looking to bring new and exciting rides to the fair," said Diaz. 

He expects the midway size and number of rides will be the same. NAME's arsenal of midway rides can fill the amount of rides necessary for this large fair, but Diaz doesn't rule out partnerships with some of the operators who have previously been at the fair. "That's yet to be determined," said Diaz. "We have a high percentage of  what they need,  it is not something that we expect to subcontract out, but we it is too early to tell what the final midway will be." 

The Western Fair attracted 194,000 in 2013, an increase in previous years. This year, attendance declined about 11 percent, blamed on severe weather patterns including a storm that forced  an early closure. The 2015 Western Fair will be held Friday, September 11 through Sunday, September 20. 

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