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Peter Herschend, Herschend Family Entertainment Corp.
Peter Herschend, Herschend Family Entertainment Corp.

2016 Economic Impact Awards Lifetime Achievement in Business: Peter Herschend

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Although Peter Herschend would like to take credit for the idea behind Silver Dollar City, he can’t.

Neither can his stepbrother and business partner Jack Herschend nor his father Hugo, a Danish immigrant who moved his family to the Ozarks in 1950 and subsequently bought a hole in the ground now known as Marvel Cave.

The way Peter Herschend tells it, the mastermind was a man named Russ Pearson.

“Russ was kind of a showman, kind of an architect,” Herschend recalls, “but he had a flair. He said, ‘You ought to build an old Ozarks mining town that would give people something to do before they went in the cave or after.’”

The commercial cave had 5,000 visitors the year the Herschend family bought it, and by charging $1.25 per person, plus nickel Coke sales, the business grossed about $7,000 in 1950.

Pearson entered the picture nine years later, offered his idea, and the Herschend boys went to work replicating an 1880s village square complete with a blacksmith, makers of candles and lye soap, a general store and a country church – “all the things you had to do if you were going to live, literally,” Herschend says.

In 1960, the storefronts opened as Silver Dollar City – named after the promotional concept to give visitors silver dollars as change so when spent later the stories of where they came from would be told. Again, the Herschends give credit elsewhere; publicist Don Richardson came up with this idea that turned into a word-of-mouth jackpot.

“We made the shift that year from being in the cave tour business to the entertainment business,” Herschend says, recounting when some 125,000 people visited their new attraction.

For the excerpts that follow, the 81-year-old Herschend sat down in the theme park with Springfield Business Journal Editor Eric Olson to talk at length about his lifetime in the attractions and entertainment business.

What was that initial investment in Silver Dollar City?
It was all the money we could beg, borrow or steal – literally, except the steal part. $35,000. My brother was the head builder. We carried hammers in our pocket and nails in our other pocket.

So a combination of bank loans and friends contributing?
And a little bit of revenue from the cave. It was a good investment that paid off very nicely. We grew from there. We had to learn the transition from just being a tour cave.

Growing it from that spot here in Branson, now to 22 properties, did you ever think it would blossom like that?
No. Silver Dollar City is 56 years old. From 1960 up through 1980, we were pretty focused on growing Silver Dollar City. In 1980, we started our first expansion, White Water, six miles down the road. It was intended to take the entertainment, as we knew it, to the marketplace. We did that because of the second Arab oil embargo. In 1979, the Middle Eastern nations put a clamp on the oil flowing out. It changed travel patterns overnight. It was a tough year here.

From that, we learned that one of the things we need to do in the entertainment business is not be dependent on people having to get in their car to come see us. White Water was birthed.

We opened White Water in Oklahoma City, two in Dallas and one in Atlanta. We put a total of five White Waters out there. In the process, we also started what was then called SDC-Tennessee; today it’s Dollywood. We were moving out to where the people were, at least with better concentrations than here.

It seems the growth of Branson and this park are unified. How have those two interacted over the years and what’s the market like right now?
Here’s what it takes in rural America to have a travel destination: The two ingredients are a large body of water – the Corps of Engineers gave us Table Rock Lake – and hills or mountains. You’ll have a significant amount of people coming with those two.

Silver Dollar City was the start of the entertainment industry for our community. Now we had the lakes, the hills, and parallel with that started the entertainment industry in Branson – Presleys, Baldknobbers, the Foggy River Boys were really the first three bedrock shows. Other entertainers came in and the reputation of Branson started to grow as a place of entertainment. The music show industry is very properly called a traffic generator. Silver Dollar City this year will have 2.1 million or so visitors.

And Branson as a whole has 7-8 million visitors.
I use the number 6 million. I can defend six. About a third of the visitors who come down will come to Silver Dollar City. We know that over time.

When we look back at that history, the evolution of it, and you put “60 Minutes” on top of that in the 1990s, what’d that do for business here?
It wasn’t just “60 Minutes.” In the mid to late ’60s, the first real break happened. It was called “The Beverly Hillbillies.” It was 1967. The reason I know it was 1967, my oldest son, John, his birth was announced, Elly May said, “Hey, I hear Pete Herschend had a new baby boy.” And Clampett said, “No, no, no. That was JoDee’s.” Corny line. When the show was still in syndication, about once or twice a year, we’d have friends say, “Hey, we heard John was born again.” Forty years later.

It was a huge factor. “60 Minutes” was a huge factor. They called us and said, “Hey, we want to come down.” We said, “Eh, OK.”

You were a little nervous?
Well, yeah. Much of what you see then and now, it’s investigative journalism. We were thinking, “What are they going to say about us? What has the mayor done wrong?” And as it turned out, it could not have been more laudatory. It was tastefully done. It was not just Silver Dollar City. It was on the area. “60 Minutes” was on top of the TV chain when it ran. That was just an immense factor in terms of taking Branson from a nice regional attraction into one with national standing.

Today, it’s not just Silver Dollar City but parent company Herschend Family Entertainment spans to include the Harlem Globetrotters.
We’re wrapping up our third season with the Harlem Globetrotters. But it’s their 90th year. They’re older than we are.

What are the gross revenues for HFE these days?
More than what we made in 1960.

Quite a bit more.
We don’t share those numbers. It isn’t where we like to focus. Stanley Marcus has a quote that, to me, is much more important. He said, “We do not earn profits in our company. We earn customers. Our customers will give us all the profit we need or deserve.” That philosophy is where we are.

We have five metrics for the success of this company. Is profitability one of them? Of course it is.

You wouldn’t be around long, if not.
Profit is what makes the expansion possible. It is what makes the acquisition of the Harlem Globetrotters possible and a new one we’ll announce this fall. You’ve got to have gas in the tank. But every one is important and on the scale of 1-10, these are all a 10.

1. Guest satisfaction. How often do guests come back? Are we doing a good job to bring them back time and again. 2. Guest safety. In our business, that’s immense. 3. Every bit as important is employee safety. 4. We’re a Christian company, without apology. That doesn’t mean we’re a church. But it means we do our best to operate in a way, as best we can do, in a way that we believe is pleasing to Christ. 5. Profit. Are we successful all the time in all five of those? No, not on your life. But you strive to get there.

Let’s talk about failures. That’s a reality in business and life. If you could have one redo, what would that be?
Two quick answers, and both of them sit here in Branson. One is called the Grand Palace, the biggest theater in Branson. We knew we could run a stage theater and bring in big name entertainment better than everyone else, because look how smart we are and how good we are at entertainment. We don’t own it anymore. We haven’t owned Grand Palace for a long time. We lost our shirts. We did great things for the community – for 10 years we brought the Rockettes into Branson, perfect – but never made a dime on it. The fact is that wasn’t our wheelhouse.

Around the corner from Grand Palace is a business that isn’t there anymore called Celebration City. We reasoned, incorrectly, that we have all these people – 2 million visitors to Silver Dollar City – in the daytime. What we can do is make a park for them to go to in the evening. We did our research. Oh, we were thorough on that. We had models and tests, and only one thing was wrong. We were wrong. People didn’t respond. We bought, actually, an existing park, and they’d been doing a half-million people. So we reasoned in our ego that we’re good enough in our first year, we’ll do 600,000, then 650,000 and maybe 700,000. We knew we wouldn’t get to 1 million. First year, we did 450,000. The next year we worked harder, and we did 400,000. We managed to get it all the way down to 350,000. It wasn’t because the product was bad.

What was it?
Excellent competition. The music show industry had gotten better and better. In the evening, they were attracting people. They had been to Silver Dollar City, and Ralph said to Mable, “Uh, we’ve done all that. Let’s go to the Presleys, or Foggy River Boys or Shoji Tabuchi.”

What are your takeaways from that?
We learned to do a better job of research, and I think we do that now. Of our 22 operations in 10 states, two would be close to life support today. They’re having a tough time, and in each case we’re turning them around.

We hunt and hunt within our ranks for the right men and women to be leaders. It all depends on how good that leader is.

How do you choose your leaders?
In the organization chart, for the CEO and his direct reports and their direct reports, underneath each name is three blanks that have to be filled in. One is “qualified,” second is “emergency,” and third is “in training.” To the best of our ability, those must be filled in all the time. Then, we know who to turn to.

You’ve recently gone through that in a CEO change for HFE. What do you look for in qualifications?
Let’s tell that story. A year ago, last April, Joel Manby, who had been our CEO for eight years – class act CEO; we still use his book here, “Love Works,” as a reference point all the time – someone came along and hired him away. SeaWorld made him an offer that he couldn’t refuse and we couldn’t begin to match, because their board of directors recognized a good job of leadership. The difficulty for Joel was that he was being hired into a crisis situation at Sea World. They’re still in crisis, but you can just see his hand written all over their marketing program. He officially left us April 1, 2015. By April 3, we had our interim CEO in place, Andrew Wexler. He was CFO for nine years. The board does the hiring, not Jack or Pete. Jack and Pete are not on the board anymore. That was part of the transition plan.

The board said we are going to do a search; give us eight weeks to see if there is a person out here who is better qualified than Andrew. That makes it a little nervous for Andrew, but you have to do that. The board did that in six weeks and came back with two names. What they found was the two people are very good, every bit as good as Andrew. But why in the world should we hire if they’re only as good as Andrew? At that point, Andrew was moved up to the permanent position of CEO.

What is your favorite amusement park?
I’m sitting in my favorite.

This is the one I helped build from the ground up. Dollywood is actually a bigger park; they’ll do more visitors by 300,000 more a year – that puts them in the 2.5 million-visitor range. If you went to Dollywood, you would find a property not like Silver Dollar City but pretty close. That’s No. 1 and No. 2.

Outside of Herschend Family?
Busch Gardens Williamsburg [Virginia]. It’s a big park, 3.5 million visitors a year.

What’s the last ride you’ve been on?
Outlaw Run. I go on every ride every year. Don’t ask me if I like to do that. I’m not a ride guy.

If you could speak to your younger self, what advice would you give?
Three things. 1. Learn to trust God more and earlier. 2. Spend more time with my wife and family. 3. Be a better selector of the people to run the components of the business.

Did you have a dream as a child and are you living that dream?
Oh, I had a dream. I was going to be a forester. I was accepted at the University of Montana in their school of forestry. Then we built the first part of Silver Dollar City. My other dream was to be an international shipping executive and my third one was to be a hospital administrator. None of them worked out thank God.

What do you want to be remembered as or by?
If we can have created a company that is able to keep our mission statement and our purpose statement alive and well 20 years from now, that’s all the legacy I need. We are in the business of – four words – creating memories worth repeating. It took 13 men and women sitting together for a day to talk about nothing else 20 years ago. And then it took us a year to make sure we were right, because a mission statement does not change.

A purpose statement doesn’t change: We believe we best serve God by – four words – bringing families closer together. The purpose statement answers why you do it and the mission statement answers what.


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