Are Theme Parks Too Expensive?

This has been a great summer for amusement parks, as long as we're not going by turnstile clicks. 

SeaWorld Entertainment (NYSE: SEAS  ) became the fourth and final publicly traded park operator to post quarterly results for the potent summertime season. Revenue rose a mere 3% to $538.4 million. Analysts were holding out for a 4% advance. The news gets far better on the way down the income statement, with SeaWorld's net income soaring 30%. Analysts were parked in the first few rows of one of the park's killer whale shows there, as they were expecting far less. (Get it? They're all wet.)

However, let's get to the troubling nugget in SeaWorld's report. Attendance at its 11 parks declined 3.6% during the quarter. SeaWorld points out that this is sequential improvement from the 9.5% dip in turnstile clicks during the second quarter, but it's still a negative showing. Revenue at the company rose only because the average guest paid 9.1% more to get in and spent 3.5% more on food, merchandise, and other in-park items than during last year's telltale summer quarter.

SeaWorld blames the soft attendance on rainy weather in Florida, but how can charging guests 9% more to get in this year not have kept the parks a little emptier this season? And, as a Floridian, I want to apologize to any guests who paid 9% more to get in this summer and still got rained on. You folks got hosed twice -- or make that three times if you sat in the front row of the Shamu Rocks show. If visitor remorse kicked in after catching the Blackfish documentary -- look at you -- you got hosed four times!

However, it wasn't just SeaWorld that was surprisingly weak in terms of guest count.

  • Six Flags (NYSE: SIX  ) kicked off the earnings season by reporting a mere 2% increase in attendance.
  • Cedar Fair (NYSE: FUN  ) followed with a 2% uptick of its own.
  • Disney (NYSE: DIS  ) doesn't put out actual attendance figures, but it did point out that attendance declined at its Disneyland resort in California.

All four of the chains pushed their average admissions higher, though it's probably not a coincidence that Six Flags and Cedar Fair had the smallest increases. They're regional players that rely on repeat business from locals. You can't spring a large increase on them the way the pricier theme parks did this year.

This should have been a great summer for the operators. Gas prices remained low, making it cheaper for guests to make summer treks to their gated attractions. The economy's improving. However, it seems as if some of the operators got too greedy this season. Outside of giving guests a little more elbow room, it's not the way the park operators probably planned it out.

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