Section I: Industry and Company Analysis
Company and Industry Profiles
Industry Classification / Size and Growth
SeaWorld (NYSE: SEAS) is classified under NAICS #713110 which encompasses Amusement and Theme Parks. The industry definition according to IBIS is “operators in this industry operate mechanical rides, water rides, games, shows, themed exhibits, refreshment stands and other attractions” (Kennedy, Kevin. 2021). The major players in this classification include, in order of percentage of market share, Walt Disney World, NBC Universal, SeaWorld Entertainment, Six Flags Inc. and Cedar Fair LP (see Appendix A). Under this classification, there are 367 total businesses with over 85% of the market share owned by the five leaders mentioned above.
Due to COVID-19, the amusement park industry was decimated in 2020. Most parks closed in March, 2020 and remained closed for at least several months. In 2020, Universal Studios, Orlando was the first to reopen on June 3rd (Cohen, H., & Cetoute, D., 2020), followed by SeaWorld, Orlando and Busch Gardens, Tampa Bay on June 11th (Deerwester, J., 2020) Six Flags Great Adventure, New Jersey on July 3rd, Cedar Point, Ohio on July 9th (Haddad, K., 2020), and Walt Disney World, Orlando on July 11th (Tate, C., & Kennerly, B., 2020). Some parks remained closed the entire season and finally opened in March of 2021. When the parks did reopen, many COVID-19 precautions were put into place including capacity limits, shortened hours, mandatory face masks, social distancing and continuous sanitizing and cleaning of the property. With the lost revenue from lower attendance (see Appendix C) due to travel restrictions and capacity limitations, the industry revenue as a whole was down 62.1% (Kennedy, Kevin. 2021). Add to that the unforeseen costs of additional cleaning staff, Plexiglass dividers placed throughout the parks’ restaurants, shops and attraction lines as well as additional sanitizing stations.
Prior to COVID-19, there was strong growth in the industry due to increasing numbers of domestic and international travelers as well as rising consumer spending from a strong economy. Disney’s revenue was up 13.2% from 2018 to 2019 while SeaWorld was only up 0.5% (see Appendix B). The revenue for the industry as a whole was up 3.21% in 2019, but plummeted 62.1% in 2020 (Kennedy, Kevin. 2021). Many projects were started in the parks that were later stalled during the worst of COVID-19 and have just now re-started. Universal Studios had a new park in Beijing planned to debut 2020 as well as a Super Nintendo World in Japan that have both been postponed. They were creating their fourth park in Orlando, Epic Universe, that was slated to open in 2023 with no new opening date announced (MacDonald, B., 2021). SeaWorld had seven new attractions throughout their parks where construction was halted and to be continued at a later date (SeaWorld Entertainment, 2021). New attractions and parks are a necessity in this industry in order to keep things fresh and have new guests arrive and seasoned guests continue to visit.
Company Size and Growth
SeaWorld Entertainment is headquartered in Orlando, Florida employing more than 6,400 people throughout their main office and individual parks. SeaWorld encompasses 12 recreational destinations including seven theme parks (SeaWorld San Diego, SeaWorld Orlando, SeaWorld San Antonio, Busch Gardens Tampa Bay, Busch Gardens Williamsburg, Sesame Place, and Adventure Island Tampa Bay) and five water parks (Aquatica San Diego, Aquatica Orlando, Aquatica San Antonio, Discovery Cove, and Water Country USA) (SeaWorld Entertainment, 2021). The SeaWorld branded parks are all centered around marine life and offer up-close animal interactions and educational presentations. Busch Gardens parks make guests feel like they are taking a trip around the world with various international and geographic settings. Aquatica is a companion water park to SeaWorld building on the marine-life theme. Sesame Place is the only park dedicated to the Sesame Street brand and brings along the fun, imaginary characters from TV. In 2022, Aquatica San Diego will be transformed into the Second Sesame Place. It was originally slated for 2021, but construction was stopped due to COVID-19. Water Country USA is Virginia’s largest water park and Adventure Island is a water park adjacent to Busch Gardens Tampa Bay.
As previously stated, COVID-19 wreaked havoc on the SeaWorld parks which not surprisingly caused their bottom line to plummet. In Appendix D, there are the financial figures comparing 2018-2019 and 2019-2020. It’s hard to show a true comparison due to the implications from COVID-19. From 2018 to 2019, profitability doubled and leverage increased by 42%. From 2019 to 2020, profitability was down over 300% from the enormous decrease in the revenue from attendance while the leverage was down by 255%. Looking at other costs and expenses, the cost of food, merchandise and other revenues was flat while from 2018 to 2019, but was down 66% from 2019 to 2020 from the parks being closed and capacity limited. However, while operating expenses were down from 2019 to 2020, the percentage was only 40% because fixed costs remain the same and need to be covered whether the parks are opened or closed. Increased minimum wage and other labor costs caused the Selling, General and Administrative Expenses to increase by 14% from 2018 to 2019, by furloughing employees while the parks were closed, executives taking a pay cut, and reduced hours in the parks when reopened, the expenses were down by 64%.
When setting the price for daily tickets, the price that SeaWorld charges needs to be in-line with their competitors and especially those that are in close proximity (see Appendix E). The set amount of $113.99 per person per day is $5 higher than Disney and Universal Studios. Many times, however, SeaWorld bundles the ticket with other incentives including access to their water park or they collaborate guest entry with other nearby, similar attractions such as zoos and aquariums. Season passes also offer reduced daily entry and include parking, free guest passes and food and merchandise discounts. Between the three Orlando parks, if one park raises their price, the others typically follow. Also when setting their price, SeaWorld needs to keep in mind food costs for their animals and guests as well as raising labor costs and general inflation. Demand for their product, a theme park experience, is another factor to keep in mind when figuring out ticket prices. Competition is fierce and many of the other parks have greater capital to market their parks as well as add new attractions and features to draw more guests in. There is a balance between enticing guests to visit while keeping the price fair and competitive.
Company Profitability
Appendix F shows the domestic versus international travelers and the age breakdowns of those most likely to visit an amusement park. Amusement parks are marketed to and mostly attended by families that have children, although there are plenty of older couples that enjoy a day at the park. Domestic visitors from the age bracket of 25-54 make up over 60% of the park population. Travelers over 55 make up 33% of visitors as they tend to have more disposable income as well as time on their hands. Multi-generation trips are very popular and are a great way to spend quality family time. Due to COVID-19, the international borders into the United States have been closed keeping international travelers away which is why they only represent 2.6%. Due to the costs of travel, international travelers are more likely to visit larger destinations such as Florida or California as there are more hotels and amenities available.
A2. Company Analysis of Vision; Mission; Guiding Principles
SeaWorld’s mission statement is: “Our goal is to help our guests, and the world, explore the wonders around them, and then inspire them to take action to protect wild animals and wild places” (Our Mission, n.d See Appendix G.). In the last 50 years, SeaWorld has rescued over 38,000 animals that were either sick, orphaned or injured. They attempt to rehabilitate them so that they can be released back into their natural habitat (Our Mission, n.d.). If it is not safe for the animal to return to the wild, SeaWorld will take care of them as long as necessary.
One of SeaWorld’s visions states that they are “committed to supporting and finding ways to protect our environment for a better future” (Our Mission, n.d., See Appendix G). They try to accomplish this by offering “financial and scientific support to organizations focused on animal rescue and rehabilitation, conservation education, habitat protection and species research” (Our Mission, n.d.). They have invested more than $17 million in conservation projects alone including keeping the oceans clean, restoration of coral reefs, prevention of coastal erosion and protection of habitats. They have formed relationships with governmental agencies and other organizations (Humane Society of United States and OCEARCH are two examples) to spread their vision.
Their guiding principles include “love for world life, commitment and sacrifice, and conservation” (Our Mission, n.d. See, Appendix G). The mission statement, visions and guiding principles all refer back to their conservation efforts. However, there has been a lot of controversy surrounding SeaWorld and their use of animals for entertainment purposes and how the animals are being treated…which goes against what they envision for the company. A movie, entitled “Blackfish”, was released in 2013 after the mauling of one of their head trainers, Dawn Brancheau by killer whale Tilikum during an afternoon show. This wasn’t the first time that Tilikum had killed a trainer. The movie proceeds to show examples of how poorly the killer whales are treated in captivity while at SeaWorld and is backed up by animal trainer testimonials. Just by coincidence, in 2016, SeaWorld made the announcement that they would no longer breed killer whales and the few that are still within their parks will be their last (Our Mission, n.d.). They also altered the arrangements of how the trainers interact with the killer whales during training sessions and shows.
References
Cedar Fair, L.P. (2021). 2020 annual report. https://s2.q4cdn.com/170666959/files/doc_financials/2020/ar/Cedar-Fair-10K-2020-With-Exhibits.pdf
Cohen, H., & Cetoute, D. (2020, June 3). Universal Orlando opens to some guests — but they had to follow coronavirus rules . Miamiherald.com. https://www.miamiherald.com/news/state/florida/article243230746.html.
Comcast. (2021). 2020 annual report. https://www.cmcsa.com/static-files/0ff6a41f-c1ff-4c25-b07e-4ec8424907cf
Daily Tickets & Admission: Cedar Point Amusement Park. Daily Tickets & Admission | Cedar Point Amusement Park. (n.d.). https://www.cedarpoint.com/daily-tickets.
Deerwester, J. (2020, June 12). SeaWorld Orlando, Busch Gardens Tampa Bay reopen with masks, temperature check requirements. USA Today. https://www.usatoday.com/story/travel/experience/america/theme-parks/2020/06/11/seaworld-orlando-busch-gardens-tampa-bay-reopen-after-covid-19/5345716002/.
Haddad, K. (2020, June 9). Cedar Point releases 2020 season opening plan: What to know. WDIV. https://www.clickondetroit.com/news/2020/06/09/cedar-point-releases-2020-season-opening-plan-what-to-know/.
Kennedy, Kevin. (2021, April). Amusement Parks in the US: US Industry Report 71311. IBISWorld. https://my- ibisworld-com.ezproxy.fiu.edu/us/en/industry/71311/about.
MacDonald, B. (2021, January 28). Universal theme park revenue dropped $4 billion in 2020. Daily News. https://www.dailynews.com/2021/01/28/universal-theme-park-revenue-dropped-4-billion-in-2020/.
Magic Kingdom Park Hours. Walt Disney World Resort in Orlando, Florida. (n.d.). https://disneyworld.disney.go.com/admission/.
Our Mission. (n.d.). https://seaworld.com/san-diego/our-mission/.
Rubin, J. (Ed.). (2019). Top 20 Amusement/Theme Parks North America. TEA/AECOM 2019 Theme Index and Museum Index: The Global Attractions Attendance Report, 34–35. https://aecom.com/wp-content/uploads/2020/07/2019-Theme-Index-web-1.pdf.
SeaWorld Entertainment. (2020). 2019 annual report. https://s1.q4cdn.com/392447382/files/doc_financials/Annual%20Reports/Annual/SEAS-2019-Annual- Report.pdf
SeaWorld Entertainment. (2021). 2020 annual report. https://www.seaworldinvestors.com/annual- reports/default.aspx
SeaWorld Tickets – Florida Theme Park Tickets: SeaWorld Orlando. SeaWorld Tickets – Florida Theme Park Tickets | SeaWorld Orlando. (n.d.). https://seaworld.com/orlando/tickets/.
Six Flags. (2021). 2020 annual report. https://investors.sixflags.com/~/media/Files/S/SixFlags-IR/documents/annual-reports/nc-10020462-x1-six-flags-10k-e-book-proof-v3-2020-smaller.pdf
Tate, C., & Kennerly, B. (2020, July 12). Opening day at Disney World: Small crowds, short lines, social distancing and COVID-19 merch. USA Today. https://www.usatoday.com/story/travel/experience/america/theme-parks/2020/07/11/walt-disney-world-reopens-after-4-month-covid-19-shutdown/5412790002/.
The Walt Disney Company. (2021). 2020 annual report. https://thewaltdisneycompany.com/app/uploads/2021/01/2020-Annual-Report.pdf
Tickets, Passes and Memberships: Six Flags Great Adventure. Six Flags. (2021, May 27). https://www.sixflags.com/greatadventure/store/tickets.
Universal Orlando. Universal Orlando Resort. (n.d.). https://www.universalorlando.com/web/en/us/tickets-packages/park-tickets/flr.
Appendix A – Industry
Major Players in Amusement Park Industry – 2020
(Kennedy, Kevin., 2021)
Appendix B
Comparison of Net Income (Loss) from 2018-2019 & 2019-2020
(Cedar Fair, L.P., 2021)
(Comcast, 2021)
(SeaWorld Entertainment, 2021).
(Six Flags, 2021)
(The Walt Disney Company, 2021)
Appendix C
Comparison of Attendance from 2018, 2019, & 2020
(Rubin, J., 2019)
Appendix D – Profitability
Comparison of Profitability from 2018-2019 & 2019-2020
(in thousands except Liquidity Ratio and Leverage)
| 2020 | % Change | 2019 | % Change | 2018 | |
| Liquidity Ratio | 1.6 | 381% | 0.42 | -93% | 6.31 |
| Leverage | 25.26 | -255% | 9.9 | 42% | 6.98 |
| Profitability | $(312,321) | -349% | $89,476 | 100% | $44,788 |
| Cost of Food, Merchandise, & Other Revenue | $36,712 | -66% | $108,953 | 2% | $106,604 |
| Operating Expenses | $388,473 | -40% | $649,657 | -8% | $705,954 |
| Selling, General, & Admin Expense | $94,885 | -64% | $261,701 | 14% | $229,724 |
| Operating (Loss) Income | $(241,663) | -213% | $213,200 | 41% | $151,667 |
| Attendance | 6,373 | -71.8% | 22,624 | .18% | 22,582 |
(SeaWorld Entertainment, 2020).
(SeaWorld Entertainment, 2021).
Appendix E
Current Daily Ticket Prices
(Daily Tickets & Admission: Cedar Point Amusement Park, n.d.)
(Magic Kingdom Park Hours., n.d.)
(SeaWorld Tickets – Florida Theme Park Tickets: SeaWorld Orlando, n.d.)
(Tickets, Passes and Memberships: Six Flags Great Adventure, 2021)
(Universal Orlando, n.d.)
Appendix F
Market Segmentation
(Kennedy, Kevin. 2021).Appendix G
Mission Vision and Guiding Principals:
