SeaWorld Orlando General Updates

[Jake S]

A strong American dollar is good for Americans traveling abroad. It's much less good for international tourists visiting the United States.

 

[OhHaiInternet95]

I'd like to think locals will keep them afloat.

 

[IzzyB]

A strong American dollar is good for Americans traveling abroad. It's much less good for international tourists visiting the United States.

This also means lower domestic tourism if everyone is traveling abroad. Which I have seen more and more people I know traveling outside of the country. So it may also explain a slight downturn of attendance in Orlando.

 

[vgp]

Had a bit of free time earlier today, so I decided to figure out (based on public information) what in the world SeaWorld United Parks is doing from a strategic perspective.

I'm no expert, but I'd have to imagine increased cost of in-park offerings is resulting in an overall decline for the company.

This is great stuff, but what I might add as context is operating income by year. In 2013 they had $201M of operating income on $1,460M of revenue, in 2019 they had $213M of operating income on $1,398M of revenue, and in 2023 they had $460M of operating income on $1,726M of revenue. So operating margin has gone up from 13.7% in 2013, to 15.2% in 2019, to 26.7% in 2023.

They've been remarkably disciplined with opex/SG&A and so while the top-line numbers show a decline, they're much more efficient than they used to be and that's reflected in the bottom line.

 

[Mad Dog]

This is great stuff, but what I might add as context is operating income by year. In 2013 they had $201M of operating income on $1,460M of revenue, in 2019 they had $213M of operating income on $1,398M of revenue, and in 2023 they had $460M of operating income on $1,726M of revenue. So operating margin has gone up from 13.7% in 2013, to 15.2% in 2019, to 26.7% in 2023.

They've been remarkably disciplined with opex/SG&A and so while the top-line numbers show a decline, they're much more efficient than they used to be and that's reflected in the bottom line.

Efficient bottom line but a continually eroding guest experience. Somehow, that's probably related.

 

[UniversalRBLX]

This is great stuff, but what I might add as context is operating income by year. In 2013 they had $201M of operating income on $1,460M of revenue, in 2019 they had $213M of operating income on $1,398M of revenue, and in 2023 they had $460M of operating income on $1,726M of revenue. So operating margin has gone up from 13.7% in 2013, to 15.2% in 2019, to 26.7% in 2023.

They've been remarkably disciplined with opex/SG&A and so while the top-line numbers show a decline, they're much more efficient than they used to be and that's reflected in the bottom line.

...because they've failed to increase employee wages and are inadequately staffing their parks. So those "cost savings" are coming from a lack of proper staffing. In 2023 they dropped to 26.6% from 29.3% in 2022... so they actually got worse the last two years now. Will be interesting to see how 2024 shapes up.

If your viewing this from an investor POV, sure their margins have improved... but long-term what is the plan? As an investor, while I'd be happy with improvements to margin, can they sustain that with Epic on its way? They already operate their parks with near skeleton crews... what happens next year?

 

[Thatguyoverwhere]

This could just be me projecting my own opinions, but I can't not see this as the result of cost cutting. Every aspect of the in-park experience has gotten worse, from the quality and variety of rides and entertainment to the efficiency of operations to the quality and price of food. They've basically transformed their parks into Six Flags, and now we're seeing the result. I think the best solution would be to take a thorough look at the things that are keeping visitors away, causing APs to cancel, and frustrating in-park guests, and focus spending on addressing those complaints. If that means not opening a new ride every year, so be it. I will say SWSD seems to be doing that to some extent right now, and recently announced efforts to fix a laundry list of guest complaints from food quality to staff training; that needs to happen at every park.

 

[HandsomePete]

If your viewing this from an investor POV, sure their margins have improved... but long-term what is the plan? As an investor, while I'd be happy with improvements to margin, can they sustain that with Epic on its way? They already operate their parks with near skeleton crews... what happens next year?

It's being run as if the shots are called by people who haven't really run parks and all live multiple states away... oh right.

When Disney or Universal starts to slip, like during the #ThanksShanghai days or with some of the cuts people are critical of at Universal like 3D on Kong, it's largely driven by the fact that we all know that they know better. SeaWorld today... I'm not certain that the private equity folks have any idea that they're headed toward a buzzsaw because everything is just a margin made up of digits and they don't understand how everything in the Orlando market is interconnected.

 

[Mad Dog]

It's being run as if the shots are called by people who haven't really run parks and all live multiple states away... oh right.

When Disney or Universal starts to slip, like during the #ThanksShanghai days or with some of the cuts people are critical of at Universal like 3D on Kong, it's largely driven by the fact that we all know that they know better. SeaWorld today... I'm not certain that the private equity folks have any idea that they're headed toward a buzzsaw because everything is just a margin made up of digits and they don't understand how everything in the Orlando market is interconnected.

Unfortunately, it's the nature of private equity ownership. This is what happens with just about everything they touch.

 

[Disneyhead]

It's being run as if the shots are called by people who haven't really run parks and all live multiple states away... oh right.

When Disney or Universal starts to slip, like during the #ThanksShanghai days or with some of the cuts people are critical of at Universal like 3D on Kong, it's largely driven by the fact that we all know that they know better. SeaWorld today... I'm not certain that the private equity folks have any idea that they're headed toward a buzzsaw because everything is just a margin made up of digits and they don't understand how everything in the Orlando market is interconnected.

They know, they just don't care.

 

[vgp]

...because they've failed to increase employee wages and are inadequately staffing their parks. So those "cost savings" are coming from a lack of proper staffing. In 2023 they dropped to 26.6% from 29.3% in 2022... so they actually got worse the last two years now. Will be interesting to see how 2024 shapes up.

If your viewing this from an investor POV, sure their margins have improved... but long-term what is the plan? As an investor, while I'd be happy with improvements to margin, can they sustain that with Epic on its way? They already operate their parks with near skeleton crews... what happens next year?

Well, diving further into their statements, here's the amount they spent in capital on Expansion/ROI projects each year, and I know this gets fuzzy with timing but nonetheless:

• 2018 $2.6M
• 2019 $23.4M
• 2021 $59.4M
• 2022 $68.8M
• 2023 $122.9M

So they're definitely trying to move the needle, but clearly with attendance flat or in decline (and having to dilute per cap to achieve that volume) they're not seeing the returns on the investments they are making. So maybe they've made poor decisions with that capital spend, but also keep in mind the more money they make now is the more money they can invest back into the parks later... one theory could be that they know the market is going to be in a state of decline until Epic and the WDW 5th park opens, so pinch pennies now and invest in things that will really drive attendance in 2026, 2027, etc.

 

[Mad Dog]

The problem is that they've essentially become a coaster park, and that's about all they can afford to build. Epic opens in 2025 with four (five if you count the second track of Stardust) heavily themed coasters, a couple miles away. They'll still be relatively new and fresh in everyone's mind for a few years after opening. One lightly themed new coaster at SeaWorld is not going to attract much new attendance. Sea World needs to figure out how to get the park going with stuff other than an occasional new coaster. They used to offer a differential experience before the animal shows retreat, but they are just really a Six Flags kind of park now. Sea World is, to put it lightly, screwed. All those new coasters at Epic blocked most any strategy they could have used.

 

[OrlandoGuy]

Tough crowd…I went to SeaWorld for the first time in years (since the year Mako opened I think) on a holiday weekend over the summer and had a blast.

I thought the food was actually solid, and even though it was pricey at some point there’s a threshold of what I consider “overpriced” before I really dont notice the degree to which it may or may not be too expensive—since Disney and Universal (and Publix for that matter) already hit that threshold I didn’t notice anything particularly egregious about SeaWorld.

Ride ops weren’t the best, but I didn’t wait longer than 40 minutes for anything. They do pull that trick of inflating wait times to get you to buy Quick Queue and they almost got me but after waiting in one line I realized every posted time was about double the actual time in line. Scummy business move or psychological customer satisfaction trick? You decide, but I know it made every wait better for me.

Employees weren’t AMAZING but they weren’t bad. I dont care that the Dippin Dots guy was on his phone—he still served me my Dippin Dots. I dont care that the ride ops didn’t smile and wave and ask how my ride was—I just need to get on and off. So in that regard I think service levels are fine (and I think even that as a blanket statement is kind of unfair to a select few employees who really were hustling and having a good time with the guests).

Also, it’s true that the roller coasters at Epic Universe look awesome but coaster parks can coexist IMO. Mako and Ice Breaker absolutely rip and though Kraken and Manta are getting a little rough they’re still unique experiences to Central Florida. Pipeline also offers a first-of-its-kind complimentary rectal exam which I found to be a very helpful add-on to my ticket.

This doesn’t sound like a glowing review because it’s not, but for the price I paid to get in it was a fun day. Sea World isn’t selling a premium experience and it doesn’t pretend to give you one. I’d honestly argue that sheer quality of experience aside, Sea World is better at executing what it wants to be than USF or Hollywood Studios do.

 

[bbombei]

Yeah this park is caught in the wrong market at the wrong time. Not sure how they will get themselves of out this situation with barely much room to expand as well. Will attendance drop off when epic opens?

 

[IzzyB]

Tough crowd…I went to SeaWorld for the first time in years (since the year Mako opened I think) on a holiday weekend over the summer and had a blast.

I thought the food was actually solid, and even though it was pricey at some point there’s a threshold of what I consider “overpriced” before I really dont notice the degree to which it may or may not be too expensive—since Disney and Universal (and Publix for that matter) already hit that threshold I didn’t notice anything particularly egregious about SeaWorld.

Ride ops weren’t the best, but I didn’t wait longer than 40 minutes for anything. They do pull that trick of inflating wait times to get you to buy Quick Queue and they almost got me but after waiting in one line I realized every posted time was about double the actual time in line. Scummy business move or psychological customer satisfaction trick? You decide, but I know it made every wait better for me.

Employees weren’t AMAZING but they weren’t bad. I dont care that the Dippin Dots guy was on his phone—he still served me my Dippin Dots. I dont care that the ride ops didn’t smile and wave and ask how my ride was—I just need to get on and off. So in that regard I think service levels are fine (and I think even that as a blanket statement is kind of unfair to a select few employees who really were hustling and having a good time with the guests).

Also, it’s true that the roller coasters at Epic Universe look awesome but coaster parks can coexist IMO. Mako and Ice Breaker absolutely rip and though Kraken and Manta are getting a little rough they’re still unique experiences to Central Florida. Pipeline also offers a first-of-its-kind complimentary rectal exam which I found to be a very helpful add-on to my ticket.

This doesn’t sound like a glowing review because it’s not, but for the price I paid to get in it was a fun day. Sea World isn’t selling a premium experience and it doesn’t pretend to give you one. I’d honestly argue that sheer quality of experience aside, Sea World is better at executing what it wants to be than USF or Hollywood Studios do.

I agree with a lot of this. Sea World is a fun park to go to and my family did enjoy it. It had a lot to offer and really is a good value for what you pay. Especially during the holiday periods where they run special stuff which is summer, Halloween, and Christmas. They have a lot of capacity and can handle high volume of people without it feeling super crowded with long waits.

But they do have issues with ops and people seem to overlook it during their trips. So they aren't making as much.

 

[UniversalRBLX]

This doesn’t sound like a glowing review because it’s not, but for the price I paid to get in it was a fun day. Sea World isn’t selling a premium experience and it doesn’t pretend to give you one.

While it's not their current goal, they did at one point strive for excellence, which is where a lot of the cynicism comes from.