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SeaWorld Drops After Cutting Prices Amid Visitor Decline

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Aug. 29 (Bloomberg) -- SeaWorld Entertainment Inc. fell to its lowest level since the stock began trading in April after it slashed ticket prices amid a drop in attendance.

The Orlando, Florida-based company, which sold $807 million in shares in an initial public offering, dropped 6.5 percent to $29.70 at the close in New York, its lowest price since the company went public on April 19. The decline pared SeaWorld’s increase over the $27-a-share IPO price to 10 percent.

SeaWorld’s original park in San Diego is offering area residents a free kid’s ticket with an adult ticket purchase midweek, a $71 value, according to its website. SeaWorld Orlando cut $42 off the price of a midweek ticket, a 46 percent discount, if purchased in advance online.

The current promotions are a reaction to consumer demand and part of an effort to fill parks on weekdays, Fred Jacobs, a spokesman for SeaWorld, said in an e-mail. Attendance fell 9 percent in the second quarter, mainly because of higher prices instituted earlier this year, bad weather and the timing of Easter on the calendar, Chief Financial Officer James Heaney said earlier this month when the company reported its results.

“I’ve never seen a SeaWorld promotion that aggressive in the 10-plus years I’ve been listing SeaWorld coupons and deals,” said Mary Waring, who runs the MouseSavers.com website for theme park visitors. She said the Orlando discount started this month.

Pricing Strategy

SeaWorld is also getting negative publicity from a critical documentary over the use of killer whales in its theme parks. “Blackfish,” released in U.S. theaters on July 19, began attracting attention after its premiere at the Sundance Film Festival in January.

“We can attribute no attendance impact at all to the movie,” Jacobs said.

SeaWorld, which owns 11 parks in five states, introduced a new ticketing strategy this year that involved higher prices and less reliance on third-party distributors. SeaWorld Orlando increased its single-day ticket price three times, or 12 percent, to $92 in June from $82 in July 2012, according to the Orlando Sentinel.

The June price increase put SeaWorld Orlando on a par with neighboring attractions at Universal Studios and below Walt Disney Co.’s Magic Kingdom, Jacobs said.

“We are continually refining our consumer offers and have various types of ticket packages in the marketplace at all times,” Jacobs said.

‘Sobering Year’

“Blackfish” argues that killer whales shouldn’t be held in captivity, and that the company ignored warning signs of the danger to handlers. SeaWorld has countered with a detailed critique of the film, calling it “a dishonest movie” in a statement distributed to critics and refuting many of its conclusions.

Videos posted recently on the Internet of a dolphin and a pilot whale left out of water at SeaWorld parks in San Antonio and Orlando may also be affecting public attitudes, according to “Blackfish” director Gabriela Cowperthwaite.

“It’s been a sobering year for SeaWorld,” Cowperthwaite said in an e-mailed statement yesterday. “It’s likely people are realizing that nothing at that place is what it seems. The jig is up.”

The animals in the videos were never in danger and were tended to quickly, SeaWorld said in a statement yesterday.

“There is no higher priority for SeaWorld than the safety of guests and staff and the welfare of our animals,” the company said.

Ticket Discounts

SeaWorld said on Aug. 13 that its parks welcomed about 600,000 fewer visitors in the quarter that ended June 30, and overall revenue fell 3.4 percent to $411.3 million. The company lowered its full-year revenue forecast by $10 million to a range of $1.45 billion to $1.48 billion.

SeaWorld’s ticket discounts and the partial closure of dining options at its Busch Gardens Tampa park indicate that attendance is down, according to Dennis Speigel, president of International Theme Park Services Inc., a consulting firm in Cincinnati. The visitor numbers are surprising given that in May the company opened Antarctica: Empire of the Penguin, its largest investment in a new attraction to date, at SeaWorld Orlando, Speigel said.

“When you’re seeing those kinds of discounts in the first part of August, that’s telling you attendance is off,” Speigel said. “Something didn’t gel.”

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net

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