With Its New Mystery Lodge Attraction About to Open, Knott’s Berry Farm Pins Strategy on Outsmarting Bigger Rivals

Half a century ago, the Knott family stapled brief messages to menus in the Chicken Dinner Restaurant.

“Patrons please note,” they read. “Rumors we have sold out are being persistently circulated. We have NOT, nor is the place for sale.”

Similar rumors, coupled with quick and adamant denials, still surface periodically. But where the buzz was once fueled by the runaway success of Knott’s Berry Farm, the recent whispers have centered on a merger or sale to a big corporation after three years of weak attendance.

As the old Ghost Town enters its 54th summer, Knott’s struggles to compete as the lone family-run theme park in Southern California surrounded by four larger and much better funded theme parks owned by entertainment or consumer products conglomerates.

The corporate-owned attractions, including Disneyland nearby, spend tens of millions each year for new rides and advertising campaigns. By contrast, Knott’s new attractions of late have been relatively meager, it has reduced its executive ranks and downsized plans to spread the Knott’s name worldwide.

Readying a comeback, Knott’s is set to officially unveil a special-effects show called Mystery Lodge on Saturday. It is the park’s most ambitious undertaking since the recession hit California in the late 1980s.

Through it, Knott’s hopes to regain ground in the theme park wars by outsmarting, if not outspending, its rivals.

“We find ourselves in a business that is incredibly dominated by media and communications giants. It leaves us as one of the last independent amusement parks in a major market--and probably at a competitive disadvantage,” said Darrel Anderson, one of the founders’ grandsons and a former board chairman. “But we have carved out a niche (for) family, wholesome entertainment that is still in demand.”

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Mystery Lodge is the kind of attraction Knott’s executives hope will land their prime target audience: young parents and their children.

Inside the barn-size, wood-covered building bedecked with totem poles, guests will hear an actor portraying a mystical Canadian Indian who spins stories as images waft from the smoke of a simulated campfire and fly around the room.

Admittedly, a storytelling attraction is hardly conventional in an industry dominated by white-knuckle roller coasters and gut-wrenching ride simulators. But that’s OK by Knott’s President Terry E. Van Gorder, who explained that he wanted something that would set Knott’s apart.

“It’s a celebration of the human spirit, of the magic and mystery of life,” said Van Gorder, who became enthralled when he saw a forerunner of this attraction at the Expo ’86 world’s fair in Vancouver, Canada. “It dwells on the family, the need for bonding of one generation to the next.”

Besides being different, Mystery Lodge is significantly less expensive than most theme park attractions. It cost $10 million, compared to the estimated $60 million that Universal Studios spent last year on its “Back to the Future” simulation ride and the like amount that Disneyland is reportedly paying out to create an “Indiana Jones Adventure” ride opening next year.

“We used to be outgunned 5 to 1. Now it is more like 10 or 15 to 1,” Van Gorder said.

Mystery Lodge may be a relative bargain, but it is a strategic risk. No one knows whether children will bug their parents to take them to hear an Indian storyteller. Mystery Lodge adds another Native American-themed attraction to the park where the last, an “Indian Trails” crafts village of two summers ago, did not spur much additional attendance.

It also breaks a basic rule of theming an amusement park: Put an attraction into a familiar or popular setting. In a park that built its reputation on the Old American West, Mystery Lodge will ask that visitors imagine themselves sitting around a tribal campfire in Alert Bay, British Columbia--north of Vancouver.

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Van Gorder dismisses those concerns. The story, he said, is universal. As for Knott’s Western image, he said, “The culture of the West should be a strong part of the Knott’s experience, but not the whole part. They don’t make that many cowboy movies anymore.”

These days, Knott’s can’t afford many duds. The recession has been so hard on the park that Van Gorder refers to it as “the depression.”

The Buena Park institution has fallen in popularity along with other Southland parks when compared to the nation’s other theme parks. Knott’s ranked ninth last year, with 3.7 million in attendance, according to an annual listing by the trade magazine Amusement Business in Nashville, Tenn.

Knott’s was listed behind MCA’s Universal Studios-Hollywood and Anheuser-Busch’s Sea World of California in San Diego. It was ahead of Time Warner’s Six Flags Magic Mountain in Valencia. And, as usual, all trailed Walt Disney Co.’s Disneyland in Anaheim, which was second in the nation last year with 11.4 million visitors--just behind its sister park, Walt Disney World in Florida.

For Knott’s, “it is harder for them each year,” said Dennis Speigel, a theme-park consultant in Cincinnati. “The bigger companies can market smarter. They can buy advertising cheaper. And out there in California, advertising has to be your biggest cost outside of labor.”

There has been talk of a merger with or buyout by Walt Disney Co., Marriott Corp. or more recently, Paramount Communications. But the family will hear none of it.

“That will never happen,” said Virginia Knott Bender, a daughter of founders Walter and Cordelia Knott.

The economy has taken its toll on all local parks, but Knott’s has largely stayed profitable because, in keeping with its founders’ frugal ways, it is virtually debt-free. The $200-million operation has been helped, too, by steady growth in the family’s packaged foods division and products like premium ice creams and Nutrasweet-sweetened boysenberry preserves.

Still, the theme park is the core business, and it sets the pace of the company. “We’ve had earthquakes, floods, a poor economy, companies moving out of the state, riots, murders--so many things,” said Bender, 80, who works around her gift shop at the park. All of them, she said, have affected attendance.

Because the visitor count is down, Van Gorder said he has been holding off from launching major new projects, or replacing outdated rides.

To change that, the Knotts are proceeding with a new five-year plan that will add, among other things, a third roller coaster.

And there is still plenty to build on. Knott’s is one of the region’s most beautifully landscaped amusement parks; founder Walter Knott planted many of the trees himself. It has the best-quality food of any park in the nation, according to one poll.

Perhaps most of all, it has a certain earnestness, a lack of pretension, that sets it apart from the competition.

It’s a place where you can still see a miniature Ferris wheel made of toothpicks, feel the heartbeat of a desperado who was supposedly buried alive in Boot Hill, or sample a funnel cake.

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Such simple pleasures reflect the humble roots of the Knott family. The Berry Farm grew from a roadside stand where Walter Knott and his bride scratched out a living on 20 acres. To supplement their berry sales, Cordelia started serving chicken dinners on her wedding china in 1934.

The restaurant was so successful that Walter started hauling in desert shanties to create a Ghost Town in 1940. A history buff, Knott wanted to keep guests occupied while they waited for a table.

The park kept growing, and by 1968 the Knotts finally put a fence around it and started charging admission.

While remaining sentimental, Knott’s has adopted innovative marketing methods to attract crowds to the 150-acre park.

A monthlong Halloween Haunt, in which workers dress up as ghouls and the rides are re-themed to be scary, sells out every year. Other parks have tried to emulate it without similar success. Knott’s is also a leader in ethnic marketing--from a gospel choir day to Fiesta Filipino.

“Our niche is counter, in a way, to the other theme parks,” Van Gorder said.

Knott’s distinctive path is largely the work of Van Gorder, a Yale-educated veteran theme park executive who is probably best known around the farm for having the foresight to create a dinosaur attraction before the first T-Rex smashed through “Jurassic Park.”

His vision came in a visit to the fossil-laden Museum of Natural History in Los Angeles in the early 1980s where he saw people snatching up dinosaur books in the gift shop. The result was Knott’s Kingdom of the Dinosaurs ride, which cost a mere $2.6 million to develop but brought in droves of new visitors to the park in the summer of 1987.

Van Gorder also landed the “Peanuts” comic strip clan as the icons of Knott’s Berry Farm, where previously the only signature characters were gunfighters and sourdoughs.

But there have been disappointments too. Knott’s started a three-unit Mrs. Knott’s restaurant chain, which so far has been a limited success.

In the late 1980s, Knott’s was geared up to build and operate theme parks around the globe. There were a few bites in the Far East, and one in Indianapolis, but none materialized. The strategy fell by the wayside as the recession deepened--and more than a dozen top executives have since departed in the consequent downsizing.

There was, however, one benefit of the expansion effort--Knott’s Camp Snoopy inside the Mall of America near Minneapolis. Knott’s reaps royalties and management fees from the Minnesota operation, while the profits go to the mall developers who paid for it.

Through it all, the Knott family has never lost sight of what they affectionately call “the farm.” It’s been a quarter century since the last agricultural crop was planted there--rhubarb as a side dish for the chicken dinners--but family members believe they can find a way through the heady competition and provide for future Knotts generations.

“It’s still home,” Anderson said in an interview in his Lido Island home. “There is tremendous opportunity there.”

Amusement Parks

Faced with declining attendance, Knott’s Berry Farm is striving to maintain its foothold among the top 10 amusement parks in the nation. 1993 attendance figures in millions:

% change Park Attendance from 1992 Walt Disney World*, Orlando (Lake Buena Vista, Fla.) 30.0 -0.8 Disneyland, Anaheim 11.4 -2.0 Universal Studios, Orlando, Fla. 7.4 +10.0 Universal Studios, Universal City 5.0 +3.0 Sea World, Orlando, Fla. 4.5 +5.0 Sea World, San Diego 4.0 No change Knott’s Berry Farm, Buena Park 3.7 -5.0 Cedar Point, Sandusky, Ohio 3.6 +15.0 Six Flags Great Adventure, Jackson, N.J. 3.5 +13.0 Busch Gardens, Tampa, Fla. 3.5 +13.0

* Includes EPCOT Center and Disney-MGM Studios

Knott’s Attendance Trend

Attendance at Knott’s Berry Farm dropped 26% from 1989 to 1993. Attendance in millions:

1989: 5.0 1990: 5.0 1991: 4.0 1992: 3.9 1993: 3.7

Source: AB Research; Researched by JANICE L. JONES / Los Angeles Times