Stormy Waters: Sea World's Blues

Sea World Killer whale

Photo courtesy of Sea World

Stormy Waters: Sea World's Blues
| published August 14, 2014 |

By Thursday Review staff


Despite Global Warming and a belief by many climate change gurus that the world’s water temps are rising (and not air temperatures), the tanks and pools of Sea World have been getting chilly lately. And that’s with some record-breaking hot days last month.

Sea World, which has seen its take at the gate and its profits fall dramatically in the last year, had its worst quarter this spring. After the company’s announcement in early August, its stock prices fell—part of a long pattern of falling value for the once-popular theme park franchise.

Sea World’s attendance has faltered in the last couple of years, but it has gone flat the last two quarters. Total attendance declined by 13 percent between January and March of this year, and its own projections suggest that it may see revenue slide by as much as seven percent this year. Sea World has fought back with feverish attempts to stop the slide—offering deep discounts, specials for Florida residents, student discounts, promotional advertising, and more. These steps may have helped to stave off the falling attendance, but they have done little to halt the decline in revenue, nor the price of shares, which have fallen off a cliff in recent weeks.

Its two largest facilities—Sea World Orlando and Sea World San Diego—have seen the worst numbers of all, and business analysts familiar with theme park profits models say that those two parks alone may be dragging the company down. Once fierce competitors with rival parks owned by Walt Disney and Universal (in Florida and California), each have recently seen such serious declines as to place the entire company in financial jeopardy. (Sea World Entertainment also operates Sea World in San Antonio; it also recently closed its unprofitable Sea World theme parks in Aurora, Ohio and Sandusky, Ohio).

A variety of factors have been blamed, and weather has wrought a small toll. The same severe winter which affected so many other U.S. industries—from home sales to home construction, from cars sale to retail activity—may have had a modest negative impact on Sea World. After all, many of its Central Florida visitors drive from locations as far away as Wisconsin, Michigan, and Ontario. Extreme winter conditions brought much of that highway travel to a halt, and even affected air travel for tens of thousands.

But this fails to address how competing theme parks—Orlando’s Magic Kingdom (Disney) and Islands of Adventure (Universal), for example—managed to eke out respectable profits even with all that ice and snow blanketing at least 35 states (Florida included!). And by spring, weather conditions had bounced back with such a vengeance that hotel and restaurant receipts in Orlando have reached their highest since 2005, and Florida’s tourism numbers may yet break even that record by the end of the year.

The biggest problem for Sea World may be its abysmal public relations response to negative news, and, most especially, a documentary which has received thousands of hours of viewing on the internet and Netflix. Sea World also earned a dubious distinction this year: it was voted first runner-up as one of the worst companies in the United States by Consumerist, a website which ranks companies based on customer experience, consumer satisfaction, corporate ethics, and community and public engagement. Sea World joined those at the top of the list, and landed behind Comcast, but slightly ahead of Time Warner, Monsanto, Chase, and Walmart. Unfortunately for Sea World, this was its first venture into the gallery of The Usual Suspects.

Its proximity on that survey to cable and internet giant Comcast is made even more ironic by the fact that with Comcast’s huge buyout of NBC/Universal—which was completed in 2011—Comcast owns highly profitable Orlando competitors, Universal Studios and Islands of Adventure, a ten-minute drive along I-4 from Sea World’s front gate.

Sea World’s lousy showing on customer service rankings was bad enough. But the aforementioned documentary may have done the most serious damage to the company’s already sinking reputation. Shot and edited in 2012 and early 2013, the film Blackfish paints an ugly portrait of Sea World, its captive animals, and their handlers. The film raked in about $2.1 million in box office sales—average for a documentary, even fair-to-middling by some measures—but its replays on the web and on Netflix have been enormous.

Among other things, Blackfish tells the sordid story of killer whales in captivity, including Tilikum, an Orca at Sea World responsible for the death of at least three people. The film also illuminates poor treatment of animals held in captivity on Sea World properties, as well as other accidents and injuries which have occurred at the Orlando facility—so many, in fact, that Sea World found itself on the losing end of OSHA rulings and other occupational lawsuits. Worse, Sea World has taken a beating in the press which follows animal rights’ groups and their campaigns. Facilities in both San Diego and Orlando are routinely picketed by crowds protesting the treatment of whales, dolphins and other animals held in the entertainment venues.

Another documentary film, The Cove, accuses Sea World of complicity in drive hunts. Though Sea World has vigorously denied that it purchases dolphins from such methods, rumors and some anecdotal evidence suggests Sea World has in fact obtained sea animals through drive hunting. Despite the differences of opinion on the accuracy of charges of how Sea World obtains its animals, The Cove won a variety of filmmaking awards, and has therefore—according to some analysts—been instrumental in Sea World’s rapid decline at the gate.

Such bad publicity can quickly spill over into a variety of problems, especially for large theme parks which link entertainment value and celebrity appearances to park admission. As a direct result of the bad publicity generated by the documentaries and animal rights campaigns, Sea World experienced a surge of cancellations by musical artists scheduled to appear at the parks’ music venues. Artists as varied as Willie Nelson, 38 Special, REO Speedwagon, Cheap Trick, Trisha Yearwood, and Martina McBride have shunned Sea World by cancelling performances at the theme park. Sea World also lost the business partnerships it had forged with other travel and tourism companies, including Southwest Airlines—which terminated its decades-long partnership with Sea World amid the protests.

Sea World has defended both its treatment of animals and its guidelines for insuring the safety of its employees and theme park visitors. Last year and early this year, it produced advertisements which attempted to counter the claims made by the documentaries, but eventually the ads were pulled after they proved to be largely ineffective in changing its attendance figures at its two largest parks. Sea World also defends itself by pointing out its huge contribution to the welfare of animals, to conservation, and to marine research.

“Sea World Parks & Entertainment,” its website says, “inspired more than 24 million guests in 2012 to celebrate and conserve the natural world. Through close-up animal encounters, educational exhibits and innovative entertainment, our guests leave with a heightened sensitivity to the world around them, and an awareness of the plight of animals in the wild.”

Still, such proclamations have not been enough to reduce the freefall.

Since last year at this time, Sea World shares have fallen in value by 22%. Sea World announced this week that it will cut costs at all facilities and implement a company-wide plan to reinvest in new attractions at existing locations.

Sea World also owns multiple Busch Gardens locations, as well as theme parks in California, Virginia, Florida, Ohio and Pennsylvania.