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SeaWorld plans to launch brand-repairing campaign
By Patricia Pedicini, Orlando Sentinel
Feb. 28, 2015 9:00 pm
ORLANDO, Fla. - SeaWorld Entertainment, still experiencing declining theme-park attendance amid controversy over killer whales, will soon debut a brand-repairing campaign and is holding off on ticket price increases.
Orlando-based SeaWorld told analysts its plans Thursday as it released a fourth-quarter earnings report showing a bigger profit 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 million from $272 million. The net loss was larger than analysts' expectations.
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.
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 mindsets and making sure mindsets 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 amusement park following the critically acclaimed film Blackfish.”
It likely will 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 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 and it can analyze Spring Break and Easter performance.
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 two 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 any time soon, D'Alessandro said, 'You don't have a choice but to market, promote, build your past business and do a better job in pricing. That's how you at a minimum maintain share.”