Skift Take

After arrogantly dismissing criticism of its treatment of killer whales, SeaWorld has found a bit of religion now that attendance has fallen at parks in Orlando and San Diego. Enlarging the orcas' habitats, though, still doesn't get at the heart of some of the outcry.

SeaWorld Entertainment Inc. will build new habitats for its killer whales to blunt criticism that has hurt the company’s business and toppled its shares.

SeaWorld will build the first new location at its San Diego theme park, which will have a water volume of 10 million gallons, or almost double that of the existing facility, the company said today in a statement. The San Diego habitat will be open to the public by 2018 and new killer whale homes will follow in Orlando, Florida, and San Antonio, Texas.

SeaWorld is responding to controversy sparked by the 2013 documentary “Blackfish,” which focused on the death of a trainer. The Orlando, Florida-based company said for the first time this week that activists’ efforts to stop the use of killer whales in shows have hurt park attendance. The changes show SeaWorld hasn’t kept up with public opinion.

“SeaWorld is doing the same thing it has done for decades,” John Gerner, a theme-park consultant with Leisure Business Advisors in Richmond, Virginia, said in an interview before the announcement. “What has changed is the audience and the perception of the attraction.”

David Koontz, a spokesman for SeaWorld, said the new habitats will cost several hundred million dollars. The company will also pledge $10 million in matching funds for killer whale research.

SeaWorld rose 0.6 percent $18.10 at 8:36 a.m. in New York. Through yesterday’s close the shares had tumbled 37 percent this year after losing 33 percent on Aug. 13, the day the company discussed a drop in attendance at its theme parks.

Annual Forecast

On Aug. 13, SeaWorld reduced its annual forecast, saying sales will fall as much as 7 percent this year and earnings before interest, taxes, depreciation and amortization will decline as much as 16 percent.

SeaWorld sold shares to the public at $27 each in April 2013. Blackstone Group LP, which once owned the entire company, retains a 22 percent stake.

Atchison said on Aug. 13 that he was increasing capital investment to 13 percent of sales from 10 percent so he can build more attractions and draw more visitors.

Last year, attendance at SeaWorld San Diego fell 3 percent to 4.31 million visitors, while SeaWorld in Orlando saw its visitors drop 5 percent to 5.09 million, according to a report by the Themed Entertainment Association, a trade group.

SeaWorld’s initial response to the controversy included taking out ads criticizing “Blackfish,” according to Henry Harteveldt, a travel industry consultant at Hudson Crossing LLC in San Francisco. The company came off as belligerent, dismissive and condescending, he said.

“Maybe now that they see people voting with their wallets, they’ll take action,” Harteveldt said before the announcement. “I’m sure their stockholders will want that.”

To contact the reporter on this story: Christopher Palmeri in Los Angeles at To contact the editors responsible for this story: Anthony Palazzo at James Callan, Niamh Ring

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Tags: orlando, san diego, seaworld

Photo Credit: SeaWorld is building larger tanks for its orca whales and plans on donating $10 million to whale research. Rich Jacques / SeaWorld Entertainment