Aside from meteorology, the perennial concern for every fair and their carnival company partners is the economy. Is unemployment down or up in any given area? Do families seem to have more or less disposable income compared to last year?
Chris Lopez, Vice President of Ray Cammack Shows has noticed a positive change in an economic indicator he always keeps an eye on. This tell-tale sign is not found on the fairgrounds but in the towns that he visits throughout the year. Lopez “takes notice of how filled are parking lots, how long the lines are at the restaurants. That catches my eye, the local surroundings. Are people spending money, do you have to wait in a line to eat at a local restaurant.”
Great Business Model
Lopez is seeing and sometimes even standing in more lines this year than last year. This economic upswing has also been apparent on the midway, with spending at fairs healthy so far. “We are having a pretty good year,” said Lopez, hesitant to say more because he doesn’t want to “jinx” the season. “I’m very optimistic about the fair business. We have a great business model that works. We share the same vision as all of our fair partners.”
RCS was formed in 1963 and according to its website: “Each year, we ride over 10 million people on our amusement rides.” Like most well-established carnival companies, the majority of the route is the same or at least similar year every year. But Lopez’s perspective on economic indicators might be more authoritative due to the unique routing of RCS. This company specializes in long fairs, its route dominated by fairs that can span up to five weekends, including the Houston Livestock Show, Orange County Fair, and the LA County Fair.
RCS does provide midways to a few shorter fairs during its southwestern tour –mainly Texas, California and Arizona, their home base – but the bulk of the dates are lengthy, where a carnival company can see “the grass grow around our feet,” he said.
Compared to more traditional carnival company routes, the long-stays have several advantages, not the least of which is less travel for the company, resulting in cost savings ranging from less fuel usage to reduced wear and tear on vehicles . “It’s easier on the equipment and the employees,” said Lopez. We can also do more regular maintenance during the down time. “
Work Force Challenges
In addition to taking up more calendar days, the magnitude of the fairs RCS typically plays requires bigger midways. The company is one of the largest carnivals serving fairs in North American, with a ride inventory for any given event ranging from 69-71 and approximately 58 games and 22 food stands on the midway. The workforce required to run the operation is immense, upwards of 700, a mix of foreign guest workers, full-time American personnel and local, temporary workers.
The largest portion – 300 – of the labor force the RCS midway requires is H-2B workers. Unlike delays and other problems of the H-2B program, this year the company was able to secure their sizable allotment of visas. “We didn’t have any problems this year, but it is always a challenge when you participate in the H-2B program,” he said.
Despite having a relatively problem-free year regarding caps and other foreign guest worker visa requirements, Lopez believes the H-2B issue is the most critical problem facing the fair industry. The biggest hurdle may be how easily politicians, the public and the press conflate the H-2B system with the hot-button illegal immigration issues. “Too many times people think is it comprehensive immigration reform, but it is not,” he said. It’s a stand-alone product, the program is not taking away jobs from any Americans. It is providing jobs to the best of the best foreigners. They pay taxes into our system, they are spending money here too.”
Labor issues this year unfortunately do not end with visas. In addition to the approximately 200 American employees that make up the traveling staff of RCS, the company hires 200-300 local workers at any given event. Facilitating these temporary workers -- most of whom are in the non-safety sensitive job category – falls to the human resource department at RCS.
With the economy improving, it is a more of a challenge finding part-timers. “I visited with our HR department and they do a great job recruiting well in advance of any fair. They are going to schools, job fairs.”
Labor cost has become the fastest rising line item on the 2018 ledger sheet. “All labor is more expensive,” said Lopez. “You have more regulatory issues than ever before, and everything from workers comp to insurance is going up. When you get to states like Arizona and California , we have new minimum wage requirements.”
The minimum wage in both states increased this year – Arizona to $10.50/California to $11 – in addition, California has different local minimum wages, creating another layer of regulatory compliance. When asked by how much labor costs increased for the carnival company, Lopez replied, “chunk.”
The 2018 RCS ride inventory features a new Konga Ride and Jumbo Elephant Ride. The signature ride of the company, setting a highly visible tone of excitement for the entire midway, is the company’s La Grande Wheel XL, which they premiered in 2017 at the Houston Livestock Show and Rodeo. The ride features 36 climate-controlled gondolas, .5 million LED lights and a 10-foot convex LED screen on its center axle.
Unlike other routes, the bigger but longer fairs makes the season very different for RCS. Many other carnival companies have as long or even longer season, but the dates include many parking lot gigs and smaller events. August and September are peak opportunities, often generating 70 percent or more of the season’s total revenue. If the early leg of the route falters because of weather or other issues, the carnival company still has those peak months to make up the losses. With only nine fairs per season, every fair becomes critical to the bottom line. There’s fewer opportunities to make up loses.
“We are on par to hit our numbers,” said Lopez. “There’s been ups and downs, and in June we were dealing with some extreme humidity. But it’s been a good year so far overall. The good economic news you’re seeing is reflected in the attitude of people coming to the fairs. Spending is up.”