This month has been anecdotally soft for theme parks, and we'll get some more concrete data when the publicly traded operators report on their springtime quarters in a few weeks. SeaWorld Entertainment (SEAS -0.67%) has been particularly aggressive with its June promotions in Central Florida, even more so than larger peers Walt Disney (DIS -0.04%) and Universal Orlando parent Comcast (CMCSA 1.85%).
It started in late May when SeaWorld Orlando -- the most visited gated attraction in the SeaWorld Entertainment portfolio of properties -- introduced its "Passport to Summer" promotion. Aimed its annual passholders, the program would reward frequent visitors to its marine life-themed park that attracted roughly 4.5 million guests last year.
Stop by twice through the end of June and passholders get a free bag of popcorn. Keep coming and the prizes escalate to include premium show seating, animal encounters, and an all-day dining pass. If you're willing to marathon your way to 30 days of visits through the 45 eligible days, the top prize is a complimentary dinner for two at its upscale Sharks Underwater Grill restaurant. It's a clever promotion, but it leads one to wonder if SeaWorld is fishing too hard to close out the quarter with buoyant attendance levels.
Just keep swimming
Central Florida's tourism industry has been resilient in its recovery from the pandemic, but it's been proving mortal lately. After 14 straight months of year-over-year gains in the collection of Orange Country tourist tax -- levied on guests staying at area hotels and other short-term rentals -- the figure declined in April. May and June will likely be more of the same when those figures become official. Whether it's theme park fatigue, consumers tiring of three years of rising prices across all operators, or polarizing politics keeping out-of-towners away, something isn't right as we head into the crucial summer season.
It's probably not a coincidence that Disney World started offering its full slate of annual passes in April. Both Disney and Universal Orlando have put out summertime discounts on tickets and resort lodging options. However, SeaWorld's passport promo strikes an even more desperate tone. It's encouraging passholders that have historically spent a lot less per day at the park than more infrequent visitors on one-day passes to collect even more freebies.
Things got even more aggressive this week. SeaWorld announced that it was dropping a pair of complimentary guest tickets for all of four its most popular parks in Orlando and Tampa into the accounts of its passholders. The only catch is that they have to be used by Friday.
Image source: SeaWorld Entertainment.
The last-minute giveaway is naturally being well received by fans of SeaWorld Orlando, Busch Gardens Tampa, and their adjacent water parks. The popular opinion is that the promotion ends on Friday because attendance levels climb over the weekend and the Fourth of July holiday follows early next week. Here's a contrarian thought: SeaWorld Entertainment is trying to drum up attendance on weekdays this week because the second quarter ends the moment that the last of its guests go home on Friday night.
A free guest ticket generates no immediate revenue. A passholder accompanying a pair of friends or family members on the complimentary gifted admissions also doesn't nudge top-line growth just by going through the turnstile. The hope here is that the guests spend some money on food, snacks, and keepsake souvenirs. Paying up for premium add-ons or animal tours would be a bonus. However, the promotion has -- and will -- continue to drum up attendance counts until the end of the month, pumping up the important attendance figures that SeaWorld will likely lead with for its second-quarter earnings release in early August.
Will revenue and earnings keep up with the stunts to turn the chain's turnstiles into propellors? Analysts aren't holding out for much. They see revenue and earnings per share climbing 4% and 11%, respectively, for the quarter. On the bright side, this is growth in what is shaping up to be a challenging quarter for the leading travel and tourism stocks of Central Florida. The key here is what SeaWorld will do if its visitors become spoiled by this soak zone of freebies. What will it do for an encore if the summer season also gets off on the wrong foot? It's going to be a very important summer for all theme park operators.
