How Does Sea World Entertainment Turn Around?

This is a question I’ve talked about a lot over the last year. Theme park fans, industry experts, and leaders, even financial analysts all have theories on what to do about the downward spiral Sea World Entertainment has seen over the last five years. To be clear, this is not what would make me personally happy. Theme park fans often have quick answers of “free all the animals,” “more coasters” and “free beer!’ to answer some relatively complicated issues. So let’s take a look at the bigger picture and see what Sea World Entertainment can do moving forward.

To do that, we have got to take a look at what got them to where they are today. If you think the documentary “Blackfish” is the reason why the company is struggling, you’re not wrong. But you’re also not even close to seeing the entire picture. A lot of these issues have to do with the company being publicly traded on the stock exchange. The timing couldn’t have been worse as the stock debuted in April 2013 at $30.56. To put that into perspective, Sea World Entertainment stock as of the writing of this article is priced at $12.76 a share.

Being publicly traded means that you’ve got to disclose a lot of financial information that you wouldn’t have to do if Sea World Entertainment were still privately held. Unfortunately, the timing of the stock going public coincided with “Blackfish” being released a few months later in June 2013. Is there a direct correlation to “Blackfish” and attendance and revenue taking some massive blows at Sea World? Absolutely. However, that doesn’t come close to telling the entire story.

 

In 2014, Universal and Disney decided to boost their competition into hyper drive. Expansions for the Wizarding World of Harry Potter were announced that affected both coasts, plus Disney was working on an Avatar land in Florida and a Frozen ride for Epcot.  Sea World Parks continued to open new attractions and even entire new lands such Antarctica to keep pace with the competition down the road.

That competition of branded attractions drives down the perceived value of a day at Sea World. What they have done, is keep prices at a more reasonable level than other parks down the road. This is true of any market from Orlando to San Diego. Sea World ticket prices aren’t nearly as high as Disney or Universal down the road, but they aren’t exactly a bargain either if you’re comparing them to truly regional parks like Six Flags or Cedar Fair parks. More on that in a moment.

Finally, let’s look at the marketing. For years and even now, Sea World continues to spend advertising dollars explaining just what they do for conservation efforts. This is nothing new. Not only have they always spent a substantial portion of their revenue on the rescue, rehabilitation, and research of animals (not just aquatic life), but they’ve always advertised it. A reason to “feel good” about purchasing a ticket to a Sea World park. Unfortunately, with the negative publicity “Blackfish” has given the parks over the last few years, those conservation messages are coming across as reactive and even defensive.

To summarize, the cause of Sea World Entertainment’s down fall is: “Blackfish”, not investing enough to keep up with competition, the stock going public at an inopportune time and marketing. Before we move on how to tackle these issues, let’s make something incredibly clear: Sea World Entertainment is a powerful brand.  In 2016, 22 million people went and visited their parks in combined total. Sure, numbers have slid, but you can’t deny that 22 million is a strong number. Meaning there is still potential in the brand and the parks which still have some fantastic attractions from Busch Gardens to Aquatica and yes, even Sea World.

What to do to turn things around? Clearly, there is a perception issue with the general public and that perception is key. Sea World Entertainment encompasses more than Sea World Parks, but the name that is publicly traded (thus mentioned in every article written about them including this one), puts that name front and center. I’d start by taking a page from Time Warner Cable’s book and do a name a branding change. They also had a huge perception issue on their hands of being incredibly expensive and terrible customer service. Changing their branding to Spectrum has changed the public perception over the last year. Changing the name to a more generic offering to reflect the entirety of their company: water parks, animal parks, even Sesame Street are not really encompassed in Sea World Entertainment. I’m not suggesting changing the name of Sea World Parks (yet, though it’s not a terrible idea)… but the name of the company has to reflect the entire brand and frankly should have been changed years ago, perception issues aside.

 

Short term, there are a few things that can be done at Sea World Parks in particular that can help steady the ship. If there is one thing that seems to be working fairly well, it’s seasonal offerings within their parks. From Electric Ocean to the Seven Seas Food Festival, they seem to not only boost attendance but increase per cap spending.  Keep in mind, these festivals and seasonal offerings drive in far more of a local crowd, which is actually not too bad in the short term.

 

The fact is, Sea World Parks need turnstiles to start spinning yesterday. Big capital improvements like new rides or shows haven’t really seen much of a spike in attendance over the last few years. Continuing to pour money into mega attractions, at this time, isn’t making a dent, plus those take years to get up and running. You want to get people in now? Let the locals have a theme park of their own that they can afford.

Let’s take Knott’s Berry Farm as an example. Despite what you may think, Knott’s doesn’t really compete with Disneyland head to head. Rather, they focus on being a family theme park that offers a good value for families with lots of festivals, shopping, and restaurants to spend their money once they come in. Tickets (both day passes and seasonal) are offered at less than half of what Disneyland charges and that’s an intentional strategy move. Aside from Fun Spot (which isn’t really a theme park), Orlando doesn’t have a park for budget conscious consumers and Sea World is in a perfect position to market themselves as the hometown park where locals come to play.

 

Which brings us to marketing.  That message, of being the cheaper park in town, needs to be echoed as often as possible. Stop with this nonsense of offering one price online if you buy in advance and another at the gate ($79 versus $99 for adults)… let everyone know that ticket prices are deeply cheaper than what the competition is offering. The message is simple: tired of the guys down the road price gouging you? Come to us, we are affordable for the entire family.

 

Secondly, stop marketing your conservation efforts. At least for now. Absolutely continue to do them. The message every potential customer needs to hear: “Sea World has unique and affordable fun experiences for the entire family and let’s highlight some of them now.” No one in Minnesota is going to buy a ticket to Sea World because they saw an ad talking about how Sea World saves manatees. People want to escape real life and have fun at a theme park. Every cent of marketing needs to convey that message. Full stop.

 

Short term, continuing to focus on seasonal offerings, marketing on fun family experiences and the park being a cheaper alternative competition should help bring in more people. It’s the only way you’re going to justify spending mega bucks on capital improvements for the future. Now let’s talk long term.

The biggest problem Sea World has (which is nothing new) is the lack of Intellectual Properties used within the parks. As Disney and Universal continue to grow, their own brands strengthen with every new movie that comes out of the cannon. People want to fly on magic benches because they’re obsessed with the Harry Potter movies and books. They want to walk into that world, to touch, interact and even taste it. Sea World doesn’t have that draw with any of their current slate of attractions or lands.

 

The problem, of course, is finding available and appropriate IPs to partner with. Appropriate being the biggest issue. What intellectual property fits in with an ocean/animal/conservation theme? I do not have that answer and clearly, neither does Sea World. My advice? Forget appropriate and start searching for available. Merlin even used the IP of Derren Brown, a magician, to draw people into one of their parks.  Search everywhere. Even if the IP doesn’t fit the branding, work backward and find a way to tie it in. Even if it doesn’t tie into the message at all, does it really matter? If Harry Potter opened at a park that wasn’t movie or adventure based, would they still go? Yes, they would.

 

Finally, and this is no doubt the most controversial thing I’ll offer up, perhaps stepping away from being an animal park and focusing on adventure is an easier path moving forward. It’s fair to mention that Animal Kingdom and the San Diego Zoo reside just down the road from the major Sea World Parks, but the perception is the issue here. Even Animal Kingdom continues to focus on adventure more than animal experiences as it continues to evolve. What does Indiana Jones have to do with (assuming it gets the green light to move forward) animals? Next to nothing. Will the public no longer come to the park because it doesn’t have to do with the park’s original vision? Of course, they’ll flock to the park in droves. Avatar has nothing to do with animals, though it does fit in thematically and does carry the conservation message. The public clearly seems to dig it.

So there you have it. Take it for what it’s worth. I will offer one final parting thought as I know many people have strong opinions on Sea World Parks. Every piece of advice listed above is what I think will help Sea World Entertainment. It has nothing to do with what I personally want to see in their parks. Would I like to ride more new coasters? Absolutely. More dark rides? Bring em on? Less animal shows? Sure, they’re not really my thing. But this advice isn’t about me… and it’s not about your individual opinions on how the park should proceed because you like coasters or maybe want to see more animals. It’s about driving attendance in a very complicated ship that already draws millions of people to it every year and has the potential to draw millions more. Your thoughts?

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