SeaWorld is focusing on rides, not whales, and revenues are skyrocketing
SeaWorld is experiencing something it hasn’t seen in nearly a decade – a slew of good news.
The park is launching new coasters, fetching free beer, and earning heaps of accolades for its rescue efforts.
Oh, and one more thing: his financial prospects are booming.
The company recently reported record earnings and passholder buys and has become such a darling of Wall Street that a recent headline said analysts had reached a “consensus buy rating” on shares of the society.
Yes, Wall Street is now enamored with a company that some expected to go bankrupt a few years ago in the wake of the bloody documentary “Blackfish.”
At the time, analysts’ recommendations for SeaWorld shares were more like “run away screaming and don’t look back.”
It is too early to declare SeaWorld’s turnaround complete. The company still faces challenges. But he certainly seems to have righted the ship – largely because he finally recognized the need to move on.
The company’s initial response to “Blackfish” – the film that cast SeaWorld as the profiteering poster child in the deadly world of captive orcas – was dishonest and clumsy.
Executives lied about the fallout — privately selling stock while publicly saying all was well — and tried to dig into their fins, arguing that the whales would forever be the park’s central brand.
It just wasn’t doable. You can’t expect people to watch an orca kill an employee or beat another whale in a gruesome, bloody battle inside a tank from which no animal could escape – and then say : Sign me up for another whale show!
“Blackfish” helped cement a notion that was already percolating into the public consciousness – that intelligent, giant sea creatures weren’t meant to live in tiny tanks and treated like show ponies.
Maybe the average Omaha soccer mom wasn’t joining the PETA protests. But if she came to Orlando and had to choose between visiting a theme park with a bloody history and one where the only battles involved Simba and Scar dueling in a musical chant, she chose the latter.
So slowly — sometimes painfully, as SeaWorld watched a parade of executives come and go — the park pivoted. He started to focus more on the rides and less on the whales.
A milestone day came in 2016 when SeaWorld announced the end of its killer whale breeding program. In a surreal scene, the then CEO of SeaWorld stood arm in arm with the president of the Humane Society. The two announced that this day was the beginning of the end for captive orcas.
At the time, I suggested SeaWorld adopt a simple four-word motto: “Bigger rides, smaller animals.” And that’s pretty much what the company did.
During last month’s quarterly earnings call, SeaWorld CEO Marc Swanson talked about new roller coasters, water slides, shows and attractions in Orlando, San Antonio, San Diego and Virginia. He never even mentioned a whale. Equally significantly, no analyst has ever asked the question.
One of the analysts on that call, Paul Golding of the Macquarie Group, said in an interview that SeaWorld had made a “strategic pivot…away from animal enclosures and animal-related shows and more towards zoological education and complementing this with thrill rides”.
Don’t kid yourself. The company is still not some kind of altruistic nonprofit and animal welfare organization. If you want to save an animal’s life, donate to a worthy charity. But the society’s rescue efforts are indeed significant — and appreciated more than ever in Florida, where manatees are dying at a record rate. The company tries to focus more on education than exploitation.
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And also thrill rides. Golding says the company has earned a reputation for running some of America’s best roller coasters, and analysts appreciate how many SeaWorld customers don’t have to board a plane to get there. That means its parks aren’t as impacted by price or panic issues related to air travel. “It’s a structural advantage,” he said.
In a research report he published a few weeks ago, Golding described SeaWorld’s financials as “solid…with room to go” and was so optimistic he set a target price of 84. $ on SeaWorld shares which trade in the 50s for most of the past month.
Obviously, SeaWorld still faces challenges, including the same staffing issues as other theme parks and businesses. But he largely paved the way to redemption, or at least solvency, by evolving.
Some activists will never accept the park as long as it benefits animals in captivity. And some die-hard fans are still angry or sad that SeaWorld agreed to cut the big animal attractions that made the park famous.
But somewhere between those two extremes, SeaWorld seems to have found its sea legs.
And that’s something a lot of people didn’t expect, probably including executives who were selling their stocks back in the days when they couldn’t imagine a day when someone would think they were a buy again. clever.