Attendance at SeaWorld's theme parks is not yet back to where it was before the pandemic, but higher guest spending has driven the theme park company's revenue and income above 2019 levels.
SeaWorld Entertainment, Inc. reported its third quarter 2021 earnings this morning. As expected, attendance, revenue and income all far exceeded the same period last year, when many of the company's parks were closed due to the pandemic. So the real standard is to compare this quarter with the same period in 2019, when the parks were able to operate normally.
In the three month period ending September 30, 2021, attendance at the parks was 7.2 million guests - an decrease of 11%, or just under a million guests, from the same period in 2019. Revenue per capita surged, however, rising from $58.31 per guest in the third quarter of 2019 to $72.13 in the same period this year. Admission per capita rose from $33 to $41.06 while average in-park spending rose from $25.31 to $31.07.
That extra spending helped drive SeaWorld Entertainment's total revenue up 10% in the quarter, to $521.2 million. Net income rose 4.2% to $102.1 million, reflecting higher operating costs, including interest payments on the money SeaWorld borrowed while its parks were closed. Not counting that interest, Adjusted EBITDA soared 28.2% from Q3 2019 to $265.3 million in the same quarter this year.
"In the third quarter, we generated among our highest revenue and net income ever reported and another quarter of record Adjusted EBITDA," CEO Marc Swanson said. "Our pricing and product strategies, along with the strong consumer demand environment, continued to drive higher realized pricing and strong guest spending in the quarter. Our third quarter financial performance would have been even better if not for limited international guest and group-related attendance, an unfavorable calendar shift and a record number of weather impacted days for our parks during the third quarter."
"During the quarter, we took advantage of our improved financial performance and favorable market conditions to refinance our debt which allowed us to reduce our overall debt, meaningfully reduce our go forward interest expense, push out maturities and increase our access to liquidity from revolving commitments. We also resumed our share repurchase activities and opportunistically repurchased 1.53 million shares during the quarter," Swanson said.
Next year, SeaWorld will open new roller coasters at its SeaWorld Orlando, Busch Gardens Tampa Bay, SeaWorld San Diego, and Busch Gardens Williamsburg parks, as well as expanding and rebranding its San Diego-area water park into a Sesame Place park.
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@James - Those events didn't really swing into action until the very end of the financial period (September 30). While I'm sure HOS had some impact on increasing revenue, you'll probably see the REAL impact of those events (and various Christmas events) in the next financial quarter.
"Higher guest spending" that all the parks are touting for this past quarter really means "higher prices". I know it doesn't mean that all parks are reporting record profits because, along with higher prices for guests, there are likely higher operating costs (not necessarily 100% true, but likely), and higher costs will eat into their bottom line.
However, with all these recent earnings reports, it looks like higher prices for guest are here to stay.
True @TwoBits, but those "higher prices" come in different forms. For a chain like SWE, that probably is attributable to reworking AP/membership programs to increase the overall prices for those products. It may also be attributable to reduced or modified passholder/member benefits that "encourage" guests to spend more in the parks (lower discounts or in some cases discounts on purchases they might not have made before being given a new member discount).
The bottom line is the same though, and if it's going to cost operators more to run their parks (increased wages and employee benefits), those costs are eventually going to be passed on to the consumer. The laws of economics don't change just because there's a pandemic.
Expanding on what Russell said, the pandemic provided a hard reset for a lot of park operations, including food and merchandise. If a company took the opportunity to eliminate poorly performing items and focus instead solely on higher-demand ones, it could drive higher guest spending without raising prices on those items.
That's obviously just one element among many in play here, but it illustrates one of the ways that parks can push guest spending.
Similar to the way Ford decided to cut bait on compact cars (All Trucks And SUVs Because That's What The People Want, read: that's the vehicle with the highest margin), you're seeing restaurants the world over make the same move. Like Robert and Russell said ... theme parks are no exception. It's not technically inflation, but in some instances, it's a way certain theme parks can get more expensive depending on which products parks decide are most profitable.
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In other words: Howl-o-Scream Orlando and San Diego are here to stay.