SeaWorld, and other global attractions industry companies, are welcoming guests for the spring and summer 2021 season. As parks gradually progress toward previously standard operations, many companies’ first-quarter operating results continue to reflect the impact of the COVID-19 pandemic.
Scott Ross, Founder and Managing Partner of Hill Path Capital and SeaWorld Entertainment, Inc.’s Chairman of the Board of Directors, recently presented the SeaWorld Entertainment, Inc. 2021 Q1 operations report. The narrative’s findings include data on park attendance and revenues, in-park guest spending, and the company’s outlook for the future.
Park Attendance
SeaWorld Entertainment, Inc. plans to welcome guests at each park location during the 2021 operating season. As of March 31, 2021, 10 parks were open for business. All parks are operating with capacity limitations as part of the company’s ongoing adherence to COVID-19 health and safety protocols.
During the first quarter of 2021, 2.2 million guests visited SeaWorld’s parks. This represents a 4.5% decrease from the first quarter of 2020.
Conversely, SeaWorld’s parks drew many additional guests during the 2021 Spring Break weeks. In fact, on several occasions, the parks reached their permitted capacities, given the current operations parameters.
Marc Swanson, Chief Executive Officer of SeaWorld Entertainment, Inc., stated that the parks’ aggregate capacity limitations (and even some shuttered facilities) were a material factor in the 2021 season’s lower attendance figures. “To be clear, we believe our attendance would’ve been notably higher, were it not for capacity limitations and closed parks.”
Total Revenue
During 2021’s first quarter, SeaWorld collectively took in $171.9 million in total revenues. This figure represents a 12.0% increase from the same period in 2020. This positive development resulted from a 17.2% higher total revenue per capita compared to the same period in 2020. This rising trend was partially offset by the parks’ lower attendance numbers.
Per-Capita Spending
SeaWorld also realized a 10.8% increase in its aggregate admission per capita number compared to the first quarter of 2020. This higher number primarily resulted from higher-priced admission products relative to the 2020 Q1 figures.
The parks’ in-park per capita spending rose 26.4% over 2020’s first-quarter figure. Increased prices and fees, an enhanced product mix, and more attractive in-park offerings were all factors in this favorable trend.
SeaWorld’s in-park events also contributed to higher guest spending levels. CEO Marc Swanson noted that new or expanded events, along with added or reimagined venues, were key factors in guests’ willingness to spend more money during their visits.
Adjusted EBITDA
SeaWorld realized an adjusted EBITDA of $25.2 million, representing a $56.0 million increase over the first quarter of 2020 figure. The adjusted EBITDA was favorably affected by the company’s higher total revenues. In turn, the higher revenue numbers stemmed from higher total revenue per capita, along with reduced expenses.
Marc Swanson stated that two major factors are behind the higher first-quarter adjusted EBITDA results. Prior to the COVID-19 pandemic, the SeaWorld Board and Management Team were developing and refining the company’s pricing, marketing, and capital investment strategies.
The pandemic’s arrival necessitated a shift in focus. With parks shuttered while many operating expenses continued, the Board and Management Team placed a strong emphasis on cost reductions and business efficiencies. These complementary moves helped to facilitate an improved adjusted EBITDA result.
The Value of Collaborative Solutions
The COVID-19 pandemic caused numerous financial and operations challenges for SeaWorld. In many cases, the SeaWorld Board and Management Team had to consider multiple variables before formulating a solution to a complex problem. Without exception, they seamlessly worked together to resolve each issue and help the company emerge in a stronger, more competitive position.
SeaWorld CEO Marc Swanson recently commended the Board and Management Team for their ongoing collaborations. With everyone committed to the same goals, and in regular communication about many issues, the team was able to improve the company’s financial flexibility and address operational cost issues. In this advantageous position, they were able to more confidently make difficult decisions.
Most importantly, Marc Swanson emphasized Board Chairman Scott Ross’ leadership during a time of unprecedented challenges. He noted, “Our partnership with our chairman and our other Board Members allowed our company to adjust and move forward with more creativity and nimbleness than we had before.”
“Having a large investor on the Board allows us to align our goals and move even more confidently and decisively. We were all in this together, and having our leadership team and board in constant communication certainly allowed us to address this crisis head-on.”
Outlook for the Future
Marc Swanson anticipates that SeaWorld parks will gradually return to a more normalized operating environment as the 2021 season progresses. He also expects the parks to collectively experience increased demand during the peak summer season.
With these favorable expectations as a backdrop, Swanson foresees numerous opportunities to further improve SeaWorld’s operations efficiencies. Once capacity limitations and other restrictions have been lifted, Swanson expects the company’s actions to spur substantial revenue growth and higher Adjusted EBITDA numbers. Over time, these positive results should help to improve SeaWorld’s overall competitive position.
