With its theme-park attendance still declining amid controversy over its killer whales, SeaWorld Entertainment will soon debut a campaign to repair its brand and hold off on ticket-price increases.
Orlando-based SeaWorld told analysts its plans Thursday as it released a fourth-quarter earnings report showing a bigger loss and lower revenue than the previous year. SeaWorld reported an adjusted net loss of $25.4 million versus $13 million a year ago. Year-over-year revenue declined to $264.5 million from $272 million.
The net loss was larger than analysts’ expectations, and the stock declined almost 6 percent Thursday, closing at $19.17.
The company’s attendance and stock value have declined, in part because of negative publicity over its killer whales. The issue went mainstream after the 2013 documentary “Blackfish,” which suggested stresses of captivity could have caused the orca Tilikum to kill Orlando trainer Dawn Brancheau in 2010.
Board Chairman and interim CEO David D’Alessandro told analysts the company a targeted marketing campaign starting by April 1 will focus on consumers who feel ambivalent about SeaWorld. Some people vehemently oppose keeping animals in captivity, while others support SeaWorld enthusiastically. The campaign will focus on those in the middle, a group that D’Alessandro said “wants to know our side of the story.”
D’Alessandro said SeaWorld has “some of the best people in the country working with us” and the campaign will be a long-term one.
“This is not a hit-and-run, as we say in the marketing world, where you can just advertise for a month and hope it goes away,” D’Alessandro said. “This is changing mind-sets and making sure mind-sets stay changed, recognizing that the opposition is not going to stand still as we do this.”
Just minutes after SeaWorld’s conference call with analysts ended, People for the Ethical Treatment of Animals issued a statement saying “it has never been clearer that the tide has turned against the abusement [sic] park following the critically acclaimed film Blackfish.”
It will likely take some time for the marketing campaign to have some effect, said S&P Capital IQ analyst Tuna Amobi.
“Usually things like this in our experience take from two to three years,” he said.
The campaign is expected to increase marketing costs. Much of that will be offset by a previously announced $50 million cost-cutting plan that included layoffs of more than 300 people.
SeaWorld also indicated it has no immediate plans to raise ticket prices. Both Disney World and Universal Orlando have broken the $100 threshold for one-day tickets during the last few days. SeaWorld will hold the line at $95 for now.
“We’re not interested in necessarily following to follow just yet,” D’Alessandro said. “But we think there may be some room there. … I think we’d like to wait until we see how the quarter goes.”
Right now, he said, “our strategy is, simply let’s get people into the parks, let’s re-establish our pass base and then let’s market more aggressively on the domestic side with additional marketing programs.”
Amobi said that is a wise strategy.
“I think they’ve got to tackle the attendance question first,” he said.
The company said it plans to hold off on giving financial guidance for 2015 as well. It wants to wait until its first quarter finishes as well as analyze spring break and Easter.
The company pointed to what it sees as a positive sign: Attendance, while down year-over-year, declined less than in the previous quarter. While year-over-year attendance dove 5.2 percent in the third quarter, this time it declined 2.2 percent.
Visitors paid less for admission but about 2 percent more on food, merchandise and other in-park spending. Next week, SeaWorld Orlando starts another initiative that could generate more money: charging $15 per person to touch and have photos taken with dolphins. At the same time, SeaWorld has stopped allowing people to buy $7 trays of fish to feed the dolphins.
In Orlando, SeaWorld also acknowledged it has stiff competition from Disney World and Universal Orlando. Without a major new attraction coming online anytime soon, D’Alessandro said, “you don’t have a choice but to market, promote, build your pass business and do a better job in pricing. That’s the way you at least, at a minimum, maintain share.”
spedicini@orlandosentinel.com or 407-420-5240
