SeaWorld Entertainment (NYSE:SEAS) was already taking steps to end its killer whale shows and put an end to orca breeding, but now it may have to pick up the pace. California Governor Jerry Brown signed a bill yesterday that includes the California Orca Protection Act, which outlaws orca breeding.
Orcas in the state -- essentially those in SeaWorld San Diego -- can stay. Any orca in California at the start of next year can continue to be held in captivity, though come June it will only be able to be used for education purposes.
This is the kind of development that would've been devastating to SeaWorld a year or two ago, but it's a much humbler theme park operator these days. SeaWorld had announced in March that it would suspend its orca breeding program immediately. It would also wind down its orca stunt shows, starting with SeaWorld San Diego later this year. Seaworld noted that the bill allows SeaWorld to "rescue and rehabilitate stranded orcas, with the goal of returning them to the wild, as is the case with all animals we rescue. And, if the federal government determines that the orca is not releasable, that animal could stay in SeaWorld’s care."
SeaWorld shareholders have been hurting. The stock hit another all-time low this week. Investors have been dumping the stock in light of a rough second quarter.
Attendance plummeted, falling 8% since the prior year to just 5.98 million guests. The shift of the Easter holiday weighed on results, but a significant downtick in visitors to its Florida attractions -- dragged down by a 40% plunge in Latin American travelers -- ultimately sank the stock.
It's not just SeaWorld that's smarting these days. Disney (NYSE:DIS) has also seen attendance drop at its iconic Florida resort in back-to-back quarters. A big difference is that Disney isn't fighting the activist demons that SeaWorld finds itself facing again.
SeaWorld's response is to be more like Disney. It announced at its most recent earnings conference call that it expects to announce a couple of new attractions to its most visited park -- SeaWorld Orlando -- later this year. Sources are telling theme park rumor depository Screamscape that SeaWorld will incorporate virtual reality in its Kraken coaster, something that seems to jibe with SeaWorld comments discussing that one of the three new things that it will be marketing in Orlando is a repositioning for an existing attraction.
Investors hope that aggressively adding rides and non-orca shows will help boost SeaWorld's fortunes. It's the Disney way, and now it's SeaWorld's future.