On August 13, 2014, after a weak earnings call, shares of SeaWorld stock plunged 33% to levels below its opening price when it went public in 2012. The news coming out of 2013’s attendance report wasn’t good, and it looks like 2014 has not been kind to the Sea World family of parks either.
Here are four things to know about the current state of SeaWorld, and what these facts might mean for SeaWorld moving forward.
1. Attendance is not growing
SeaWorld reported that attendance so far in 2014 is down 4.3% and second quarter growth is only 0.3% above last year. That second quarter growth is especially troubling, as many had hoped that SeaWorld Orlando would see substantial growth, due to new attractions at Universal and Disney drawing visitors to the area. Analysts had hoped that SeaWorld would benefit from a “rising tides lift all boats” effect, but with growth essentially stagnant from the second quarter last year (and down overall), it looks like SeaWorld wasn’t able to take advantage of the extra visitors to the area.
Though SeaWorld Orlando debuted a new attraction last year (Antarctica: Empire of the Penguin), if it wants to get visitors back into its parks, it’s going to have to create a compelling reason for them to get to the parks, which means more substantial investment for new attractions.
2. Revenue is down
However, investment in new attractions requires capital, and unfortunately, revenue is down at SeaWorld parks in a big way. For the year, SeaWorld is forecasting overall revenue to be down between 6-7%.
This downward trend is certainly troubling, and the opposite of what investors were hoping for. Unfortunately, the low revenue forecasts contributed largely to the stock plunge SeaWorld experienced earlier, as doubts are beginning to surface about the prognosis for SeaWorld as a brand.
3. SeaWorld is going to employ cost-cutting measures in the near future
During the earnings conference call, SeaWorld said that it was planning to employ some unspecified cost-cutting measures to help raise the capital needed for new attractions and shows. SeaWorld has not specified what these cost-cutting measures might be, but a reduction in operating hours as well as fewer shows during the day are could be potential options that won’t have too much guest impact.
4. New attractions are in the pipeline
Although cost-cutting due to decreased revenue and sagging attendance paints a bleak picture, SeaWorld did say during its earnings call that its is committed to developing new attractions to draw in visitors. Though its looking like some extreme measures will need to be taken to secure financing for whatever SeaWorld has planned for the future, the fact that it at least has a plan to attract visitors moving forward is encouraging, and a sign that not everything is doom and gloom at SeaWorld. The company clearly isn’t ready to give up, and fans should take heart that there is still hope for SeaWorld to rebound after these setbacks.
It’s impossible to predict what the future holds for SeaWorld, and there are likely a number of contributing factors to its current status. However, there is hope that SeaWorld can get their financial house in order and introduce new attractions that will get guests back into the parks and get revenue levels back to where they should be.