Skift Take

The news has been consistently positive for SeaWorld lately after a long stretch of disappointing results. With new leadership and a strategy that has been working, 2019 is shaping up well.

SeaWorld’s long climb out of the Blackfish hole may finally be over.

The theme park operator reported that full-year attendance climbed to the highest number since 2013, the year the critical documentary was released. Revenue also increased in 2018 for the first time since 2013.

Those numbers didn’t just inch up; both attendance and revenue jumped 8.6 percent year-over-year.

SeaWorld Entertainment said 22.6 million people visited its properties, which include 12 theme and water parks around the United States. Revenue jumped to $1.37 billion.

The company also made a profit of $44.8 million last year, unlike the net losses it posted in 2017 and 2016.

For the fourth quarter, attendance increased 8 percent to 4.6 million visitors, while revenue was up 5.5 percent to $280 million. The company reported a loss of $11.1 million for the quarter, though that was less than the net loss in 2017.

Shares rose nearly 8 percent to close at $27.29 Thursday.

Admission fell again, by 5.6 percent, to $35.46 per person in the quarter. For the year, per-person admission was down nearly 4 percent to $35.37, though per-person spending in parks rose 6 percent to $25.40.

Total Revenue Play

The company has been promoting its value proposition — what it’s calling “new pricing strategies” —  to draw people to parks, but that has meant lower prices at the gate.

“This marks the fourth straight quarter of meaningful declines in ticket pricing, although unlike 3Q where in-park spending increases were enough to offset the ticket declines, the 6 percent ticket decline was far too much to overcome,” Wedbush analyst James Hardiman wrote in a note to investors. “Given the strong attendance numbers and overall better-than-expected top-line and bottom-line numbers, this strategy seems to be worth it.”

Chief operating officer John Reilly said during an earnings call that the company’s goal has been to drive attendance and total revenue, even at the expense of declines in per-person admissions. That strategy will continue this year, but he said there are opportunities on the pricing front.

“You can expect us to further refine our pricing strategies in 2019 to continue to drive total revenue, which we expect over the course of the year, particularly as we get to the back half of the year and lap certain strategies from 2018,” he said. “That will ultimately lead to increases in both in-park per capita and admissions per capita.”

Since the Blackfish documentary, which examined the company’s treatment of captive orcas in light of the death of a trainer, SeaWorld has ended its breeding program for killer whales. The company has also been transitioning its orca shows to highlight “natural behavior” rather than entertainment and focusing more on thrill rides and family experiences than animals.

The public backlash was harsh, but SeaWorld also faced an investigation for comments made by executives about the impact of the scrutiny. Last year, the company agreed to pay a $4 million penalty while former CEO James Atchison agreed to a $1 million fine. The CEO hired to replace Atchison, Joel Manby, resigned a year ago.

Reilly had served as interim CEO since then, before moving to chief operating officer when the new CEO, Gus Antorcha, was hired away from Carnival Cruise Line in February.

Executives didn’t spend time on the past Thursday, instead laying out a confident future. They reiterated a goal to reach $475 million to $500 million in adjusted earnings before interest, taxes, depreciation, and amortization in 2020. That figure reached $401.3 million in 2018, up 35 percent from the previous year.

“We’re early into this year, but have a lot of confidence that we will reach that goal that we laid out for 2020,” chief financial officer Marc Swanson said.

In the past year, the company has found success with its pricing strategy, incentives such as free beer in some parks, and in new rides and attractions. Reilly said season pass sales have also been a focus, especially since redesigning the program late last year with better value, flexibility, and benefits.

New Attractions

The company is trying to keep guests coming back this year with new roller coasters, attractions, rides, slides, and even lands. SeaWorld Orlando will open a new Sesame Street-themed area this year.

“We believe 2019 will be the company’s most exciting year ever for new attractions, with brand new one-of-a-kind rides and experiences coming to every market, providing many reasons to visit our parks over and over again,” Reilly said during the call.

Thursday’s results came out as larger rival Disney started revealing more details on its upcoming Star Wars lands in Orlando and California. Between those lands opening in summer and fall of this year and a new Harry Potter-themed roller coaster coming to Universal Orlando Resort in June, theme park competition will be fierce.

“We also believe that SeaWorld is smart to bring in as many season pass holders as possible ahead of an unprecedented slate of competitive rides and attractions that begins late this year with Disney’s Star Wars: Galaxy’s Edge in Orlando and Anaheim,” Wedbush’s Hardiman wrote.


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Tags: earnings, seaworld, theme parks, travel advisor innovation report

Photo credit: Riders are shown on a roller coaster in this promotional photo from SeaWorld Orlando. The company saw attendance and revenue increase in 2018. SeaWorld

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