SeaWorld still suffering attendance woes

SeaWorld Entertainment failed to break out of its attendance slump during the first three months of this year, blaming a sharp decline on a later Easter holiday and the absence of a killer whale attraction at the San Diego park since early January when the final Shamu show was performed.

The company reported Tuesday that visitation across its 12 parks dropped 15 percent during the first quarter compared to a year earlier, while overall revenues fell to $186.4 million — a 15 percent decline from the $220.2 million during the same period last year.

With the Easter holiday falling in April this year, that affected the timing of spring break for a number of schools, SeaWorld said. Also a factor, although to a lesser degree, is ongoing construction at SeaWorld San Diego as it prepares to debut at the end of this month its new Orca Encounter, which will showcase the natural behaviors of killer whales in the wild.

A year earlier, SeaWorld saw an overall attendance uptick of 2.6 percent, although that was helped along, in part, by an earlier Easter holiday, which fell within the first quarter.

The company sought to put a positive spin on the disappointing quarterly report, noting that attendance overall for the year was flat through the end of April, thanks to rebounding visitation that month, which helped erase losses during the first quarter.

“With our strong attendance in April, we have recaptured the entire Easter attendance shift,” SeaWorld CEO Joel Manby said. “Remember, this is without any new rides or major attractions, except for InvadR (a wooden roller coaster) at Busch Gardens Williamsburg.”

He noted that so far this year, revenues from season pass sales are up nearly 6 percent. And in an improvement over last year, the company reported a net loss of $61 million, or 72 cents per share, for the first quarter, compared with a year-ago loss of $84 million or $1 per share.

Wall Street seemed unbothered by the earnings loss, pushing the SeaWorld stock up by 3 percent to $18.11 a share at market close.

SeaWorld executives are banking on new attractions this year, which Manby described as “one of the most robust and exciting lineups” ever, to help bolster the company’s financials and turn around a years-long slide in revenues.

Along with the Orca Encounter, SeaWorld San Diego will debut its new Ocean Explorer attraction, which will include a three-minute mini submarine ride. And in Orlando, the park will transform its Kraken roller coaster into a virtual reality experience, providing riders with VR goggles to simulate an underwater experience.

It also will be launching in San Diego the first of its deep-sea virtual reality experiences, which it is calling Orca360. Manby said the new attraction, which will come with an additional charge, will allow guests to experience being under water with the killer whales, using VR technology.

In an earnings call with analysts Tuesday morning, SeaWorld noted that as it saw slumping attendance in San Diego early in the first quarter, it started moving quickly to help reverse the slide. One of those moves was introducing All Day Orca Play, which gave visitors opportunities to view the killer whales throughout the day during presentations at its underwater viewing pool.

Manby, however, blamed intense media coverage of the final Shamu theatrical show for overshadowing the company’s promotion of the new Orca Encounter. The Orlando and San Antonio parks, which have yet to end the Shamu shows, will replace them with an Orca Encounter over the next two years.

“We can’t control, frankly, what the press does, and even though we were marketing the new Orca Encounter, they focused 2,000 articles on the last One Ocean show,” Manby told analysts. “Two thousand press impressions are hard to overcome. But we are learning from that.”

While the company would not break out any specific numbers for the San Diego park, payments made by SeaWorld to the city for leasing the Mission Bay site did show a decline during the first quarter. According to figures provided by the city, those revenues dropped 3 percent compared with the same period a year earlier.

The Tuesday earnings report comes just a day after SeaWorld’s new investor, Zhonghong Zhuoye Group of China, finalized its acquisition of Blackstone Group’s stake in the company. The new partnership is expected to open up opportunities for new theme park development in Asia over the next several years.

Manby said SeaWorld is in the early stages of negotiating a deal for theme park development in China, but an actual park is still five to seven years off.

That is in addition to already planned global expansion in the Middle East. Whatever new parks are developed overseas with its partners, Manby reiterated Tuesday that none would feature orcas.

Last year, in a move to blunt growing criticism of the company’s treatment of killer whales, highlighted in the 2013 documentary “Blackfish,” Manby announced the end of captive breeding of the orcas. At that time, he also said the long-running Shamu shows would be phased out as the company transitions away from animal entertainment.

Analyst James Hardiman of Wedbush Securities pointed out that while SeaWorld’s investment in more traditional rides and thrill-inducing attractions makes good business sense, it still faces daunting competition from mega attractions like the opening of Avatar Land at Disney’s Animal Kindgom in Orlando and the Star Wars lands coming to Disney’s Orlando and Anaheim parks in 2019.

“I think they’re doing all the right things — de-emphasis of orcas in particular and live animal attractions in general,” Hardiman said. “But that still doesn’t factor in what their competitors in key markets are also doing. As much as SeaWorld says rising tides lift all boats, that remains to be seen.”

lori.weisberg@sduniontribune.com

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