SeaWorld Entertainment (SEAS 5.09%) went to some pretty desperate promotional lengths to keep its turnstiles clicking in the second quarter. It wasn't enough. Now it's turning to some new marketing tricks to salvage its peak summertime quarter. Will the second time be the charm or the harm?
The theme park operator expanded its inclement weather raincheck program last week. The revised Weather-Or-Not assurance program -- which used to give day pass buyers complimentary admission for a future visit if rain or windy conditions shut down attractions for more than an hour -- now covers days of extreme heat.
Guests with tickets on a day when temperatures reach a heat index of 100 degrees can request a ticket to come back any day in the next 12 months at no additional cost. There's no denying that this scorching hot summer is weighing on theme park attendance. Even industry bellwether Walt Disney experienced a decline in attendance at its Florida resort in its most recent quarter. However, handing out return tickets when a day is too sunny is either a sign of the times or the latest desperate move by SeaWorld.
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Wishing whale
This isn't the first marketing move to boost guest counts at the expense of per-capita revenue at SeaWorld. In May it ran a wild promotion for annual passholders at SeaWorld Orlando, its busiest park. Tiered prizes were offered during a 45-day period, rewarding regulars for multiple visits during the final few weeks of the company's second quarter. Visiting twice would trigger the first treat, but the top giveaway was a meal for two at the Central Florida park's most upscale dining establishment to passholders that were able to squeeze in 30 visits in those 45 days. It would go on to launch a similar promotion at Busch Gardens Tampa later in the season.
With visitor counts struggling into June -- a problem that extended beyond SeaWorld Entertainment to other park operators -- the company ramped up its promotional intensity. It began sprinkling in last-minute perks to its annual pass program, most notably providing additional chances for regulars to bring guests with them before the end of the financial quarter.
Despite all of these attendance-inflating moves, SeaWorld experienced a surprising year-over-year decline in traffic for the second quarter. The ambitious gamification efforts and additional bring-a-friend passes didn't turn things around. Revenue and net income also clocked in lower than they did in the springtime of last year.
SeaWorld wasn't alone. Disney also couldn't boost its attendance levels in Florida during its latest quarter, despite bringing back its annual pass program for new buyers in April.
The new Weather-Or-Not guarantee isn't the only sea otter that SeaWorld is pulling out of its hat this month. SeaWorld Orlando began selling its 2024 Fun Card -- offering admissions through the end of next year for roughly the price of a one-day ticket -- in mid-August. The park operator typically launches the program as schools start up after the summer break, but this is a week earlier than when the new Fun Cards went on sale last year. It was two weeks earlier than the when the 2022 Fun Card was available the year before that.
These are challenging times for the travel and tourism stocks of Central Florida. You can applaud SeaWorld Entertainment for thinking outside of the box -- or tank, if you will -- but there is often a price to pay for the unusual generosity. It's hard to wean regulars off from aggressive promotions. It's even more problematic when the moves don't have the desired effect on either end of the income statement.
