Tuesday, May 22, 2018
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Facing identity crisis and slumping profits, can SeaWorld rebuild?

ORLANDO — "See how he uses his tail to swim really fast?" a dolphin trainer at SeaWorld told the crowd on a steamy June day. "He uses his powerful muscular peduncle to help him jump really high. Want to see him jump really high?"

The trainer, Ashley Orcutt, taught a volunteer to point at the water and make a check-mark sign to signal Tiger, the dolphin, to leap. The crowd roared as the animal soared.

It was a different show last summer. At the new Dolphin Days, it was still theatrical to see four dolphins jump in unison. But now, the audience also knew about their muscular peduncles.

The new dolphin show is one of many changes the troubled company is making, along with an end to orca breeding. It's also indicative of SeaWorld's current identity crisis. Built on Shamu's image, it will have no killer whales in a few decades.

The public is losing its taste for performing animals. Just as the Ringling Bros. and Barnum & Bailey Circus saw already dwindling crowds disappear after it got rid of performing elephants, SeaWorld's shift has yet to shore up needed goodwill.

Tuesday, the company reported a second-quarter loss of $175.9 million. SeaWorld's stock has fallen 28 percent since the beginning of the year.

EARNINGS: SeaWorld reports loss as 'Blackfish' and competition continue to haunt fortunes

It has been a rough ride since the 2013 documentary Blackfish questioned the park's handling of killer whales, especially the orca Tilikum that killed a trainer in 2010. Meanwhile, deep-pocketed rivals at Disney and Universal open blockbuster attractions every year.

Joel Manby, hired as CEO in 2015 to turn the company around, said in an interview with the Tampa Bay Times after Tuesday's earnings report that SeaWorld isn't getting the credit it deserves for facing its problems.

AP

SeaWorld Entertainment CEO Joel Manby

 

"There are changing public sentiments and I think people are much more aware of animal welfare issues and much more sensitive to them," Manby said. "Our goal at SeaWorld is to go along with that changing sentiment and be the leaders in what we call the Blue Planet. We have been the leading rescue organization in the world for a long time, but people don't know that."

SeaWorld partnered with the Humane Society in 2016 to move away from its signature shows and use more humane sources for food served in parks. The company also stepped up ocean advocacy, urging Japan to end its dolphin hunts and commercial whaling.

Enlightened consumers, wrote Humane Society CEO Wayne Pacelle in his book The Humane Economy, are forcing food companies and the entertainment industry to be kinder to animals. You can't find an animal act like Siegfried and Roy anymore in Las Vegas, and McDonald's is switching to cage-free eggs.

Pacelle stood by him when Manby announced that SeaWorld would no longer breed killer whales in captivity. By 2050, the current population of orcas will likely be gone at SeaWorld. After the announcement, the company's stock shot up 14 percent.

That short uptick was followed by four consecutive quarters of slumping revenues and either flat or declining attendance across SeaWorld Entertainment's 12 parks.

"Our whole relationship with animals continues to change and change pretty rapidly," said Bob Boyd, who analyzes theme parks and the leisure industry for Pacific Asset Management. He expects to see zoos and animal attractions become filled with rescue animals, not those bred for our entertainment.

WARMTH: SeaWorld's wardrobe department made a coat for a featherless penguin

Manby said Disney's zoo-like Animal Kingdom, or Tampa's Busch Gardens, a SeaWorld property and the company's best asset, are closer to the model for the SeaWorld of the future. Merlin Entertainments, which owns Legoland, has expressed interest in buying Busch Gardens. Manby said Busch Gardens is not up for sale.

At SeaWorld, he envisions an ocean-themed attraction with shows and roller coasters, but without animal performances as its centerpiece. The performance-based orca shows in Orlando are set to change in 2019.

"We have to entertain people for four to six hours and there will be plenty to do," Manby said. "I wouldn't want to be needing killer whales to survive in this (business) environment 50 years from now."

The orcas aren't the only reason SeaWorld's attendance has been under water.

Thanks to the magic of Harry Potter, Universal now rakes in a whopping 25 percent of the Orlando theme park market share, compared to 16 percent in 2009 before any Potter-themed attractions opened.

SeaWorld ranked 12th in attendance globally with 4.4 million guests in 2009, just before the dawn of Harry Potter and the Tilikum incident. Since then, it has fallen to 25th globally.

"I don't think they can compete with a Disney or Universal," Boyd said. "So the best thing to do is not try."

SeaWorld has shifted from the $100 price point for admission found at Disney and Universal. Two years ago, admission to SeaWorld was $99. Now, you can get in for $79.99 and multi-park passes cost $59.99 per park.

NEW THRILL: Mako the hypercoaster full of high speeds and weightlessness

As Disney continues to create elaborate lands based around Avatar and Star Wars, SeaWorld has tried to tune up its rides. It opened Mako, Florida's first hyper coaster with a 200-foot drop, in June 2016. And this summer it brought the first virtual reality addition to a Florida theme park, adding goggles to 18-year-old coaster Kraken.

SeaWorld

Riders use the VR goggles for SeaWorld's Kraken roller coaster.

 

COASTER: We rode SeaWorld's Kraken coaster while wearing virtual reality goggles

The Humane Society is happy with SeaWorld's progress, Pacelle said. He continues to talk to Manby about the company's evolution.

"The important takeaway is you can't really make just a partial commitment on these issues," Pacelle said. "The public was generally happy when the circus retired the elephants, but they still had tigers and lions and other animals. They didn't fundamentally re-engineer their presentation."

More extreme groups like People For the Ethical Treatment of Animals have mercilessly stalked the company on social media. They want orcas and dolphins released to the wild, even though many scientists say they wouldn't survive.

"In some ways, SeaWorld does seem to acknowledge what they had been doing was wrong," said Stephanie Shaw, PETA's corporate liaison. "But unless they want to shut down like Ringling Bros., they need to move away from using captive animals entirely."

It's hard to say if SeaWorld will ever win back public approval. That's Manby's frustration.

"I haven't heard any of the critics articulate that this is the wrong direction we are taking," Manby said. "But the good news is that, for those that know the most about us, it's working."

Attendance within 300 miles of SeaWorld's parks are up. Season passes and Orlando resident attendance is up. What's lagging is domestic attendance outside 300 miles. Populations in cities like Los Angeles have refused to be swayed.

"If we solve the domestic attendance outside 300 miles and Los Angeles, then we are fine," Manby said. "But it will take time. Look at what happened to BP and the oil spill in the Gulf. They were just hated and vilified. But they've gotten through it. It takes longer than people think and unfortunately being a public company you don't get a lot of patience from investors."

That day in June, Sally Schneider and her 12-year-old daughter watched the dolphin show from the stands. The expansive open air Dolphin Theater is one of their favorite attractions.

And SeaWorld is their favorite of all the Orlando theme parks when they visit from Grand Rapids, Mich. The Schneiders even honeymooned at SeaWorld.

"We just like to be able to sit and watch a show and be entertained and not just spend our time waiting in line," said Schneider, 43. "We do love animals and we don't feel like they are mistreated at all."

They still liked the dolphin show. It just felt different.

Contact Sharon Kennedy Wynne at [email protected] Follow @SharonKWn.

     
       
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