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Another Big Reason SeaWorld's Theme Parks Are Struggling

SeaWorld Entertainment(NYSE: SEAS) has bounced back a bit from its darkest days. The company posted strong first-quarter results in May: Revenue climbed by $30.8 million (16.5%) year over year to $217.2 million, and attendance rose by 14.9% to 3.2 million guests.

That’s good news, but the theme park operator still lost $62.8 million, which was a bit worse than its $61.1 million loss in Q1 2017. A first-quarter loss, however, is not unexpected, as only five of the company’s 12 parks are open for the entire quarter.

In general, SeaWorld has worked its way back from the darkest days of the Blackfish scandal. The theme park operator, however, still has a major problem — at least at its self-named Orlando park. It has some attractions and shows that rival what Walt Disney‘s (NYSE: DIS) four parks and Comcast‘s (NASDAQ: CMCSA) Universal Studios parks offer, but its execution is subpar.

A roller coster is shown going over water.A roller coster is shown going over water.
A roller coster is shown going over water.

Manta, a roller coaster, has enhanced SeaWorld’s ride offerings. Image source: Getty Images.

What is SeaWorld doing wrong?

I live in southern Florida and my wife and I have a small place for vacations, friends, and family outside of Orlando. Because of that, my 14-year-old son and I hold annual passes to the four Disney World parks, the two Disney water parks, and the two Universal Studios theme parks. Over the past two years, we have visited each non-water park at least four times and some many more.

Disney and Universal Studios have top-tier customer service. Each person who works there is essentially part of the show, and nearly every person we have encountered across dozens of visits seems committed to making our visit as special as possible.

In addition, both companies have impeccable routines. Their staff members clearly understand how their lines work, as well as special features like Disney’s free FastPass+ and Universal’s extra-fee Express Pass.

At SeaWorld, where we purchased a membership for this year, the little things were missing and operations were disorganized…to put things kindly. First, we paid for Quick Queue, the ocean-life-themed park’s version of FastPass+ and Express Pass. In theory, it allowed you access to a shorter line at some popular attractions.

In practice, staff members only once checked our passes when we got in the Quick Queue line. Other people knew this and it seems likely that they entered the shorter line without having actually paid.

On top of that, the overall service at SeaWorld was subpar. For example, the company sold cups that entitled the user to free refills all day long. To get a refill, however, you had to wait in line and have your cup or receipt scanned. Many customers did not know this (or did not care), forcing the people doing the scanning to constantly have to leave their registers to clear out people who had not followed procedure. At Disney and Universal parks, the cups are similarly priced, but have RFID chips so a drink station knows if you are entitled to a free refill or not, with no check-in required.

It’s the little things

These seem like minor quibbles, but SeaWorld is fighting for attention with world-class operators who get the small details right. Most people — even Florida residents — pick between the parks. It’s unlikely that many people maintain three sets of annual passes.

My son and I will go back. We won’t, however, buy Quick Queue, and we probably won’t indulge in a near-$16 cup for free refills.

Disney and Universal generally achieve their goal of feeling like magical places — even on crowded, hot summer days. SeaWorld felt like a regional amusement park. It was fun, but not nearly the same level of top-tier experience.

The company could fix this. It needs to tighten up its operations, invest in some improved technology, and train its workers to make them more a part of the show and less like mildly agitated hall monitors. Doing this in conjunction with the new rides it has planned, and the upcoming Sesame Street attractions being brought into the Orlando park, could make the company a much stronger competitor to its two biggest rivals.

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Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has a disclosure policy.

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