Something big is coming to SeaWorld Orlando next year, and it's not a killer whale or a billboard promoting the cause of park-bashing activists. SeaWorld Entertainment (NYSE:SEAS) is building a new thrill ride at its most popular theme park, and investors have to be hoping that they're not the ones being taken for a ride.
The struggling theme park operator revealed last week that it will build a new roller coaster at its Orlando park that draws roughly 5 million visitors a year. It will put out more information in a few days, but for now, SeaWorld is admitting that the new scream machine will be the city's tallest, fastest, and longest coaster.
New 2016 coaster at SeaWorld to be Orlando's tallest, fastest, longest. #NothingFaster— SeaWorld (@SeaWorld) April 24, 2015
The distinction won't last. The 200-foot coaster will only be Orlando's tallest for a year. The Skyscraper at Skyplex that's set to open in 2017 is being billed as the world's tallest roller coaster.
Now it's not really a surprise to see SeaWorld trying to disrupt the activist narrative. Regional amusement park operators know that nothing drums up attention like an e-ticket thrill ride. The only real surprise is that SeaWorld is willing to make this kind of investment. It's been scaling back in an effort to keep creditors happy and dividend checks coming as profitability has crashed. This is a bold tact, and it's also likely the correct approach.
Rides, after all, are what set SeaWorld apart from the other marine life parks and aquariums that have struggled financially over the years. Drive a few hours south to Miami's Seaquarium, and you'll find a park that has similar killer whale, dolphin, and sea lion shows as SeaWorld Orlando. Seaquarium was the home of Flipper, popularized by the movie and 1960s television show filmed partly at the attraction. There may have been a time when Seaquarium was the larger draw, but that is certainly not the case now. SeaWorld built thrill rides and attractions. Seaquarium dismantled them. Today we find Seaquarium drawing just a 10th of the traffic SeaWorld Orlando does.
Making a big splash
The success of thrill rides to woo guests could eventually be the ticket to make peace with activists. One of SeaWorld Orlando's newest attractions -- Antartica: Empire of the Penguin -- is a ride that takes park guests through an animated action sequence of a penguin getting used to its environment. The ride ends at a zoo-like penguin habitat. Similar attractions use a ride or theatrical film to portray sea life for turtles or sharks before guests can see them in person. That could ultimately be the compromise. Instead of having killer whales and dolphins perform -- drawing the ire of activists -- rides and attractions can set up the eventual habitat.
Extreme activists argue that the orcas should be set free, but that's unlikely to happen. However, building larger viewing tanks to create more of a zoo-like experience without live performances and using more rides to enhance the ultimate interactions would bridge the cruelty concerns with those of running a for-profit business. Some activists will still be vocal, but SeaWorld would no longer be as unfashionable to visit as it is right now.
Activists could also play a part in making this happen. Instead of threatening to boycott bands that play at SeaWorld music festivals -- campaigns that were successful even if they were championed by people that had no intention of going to the concerts in the first place -- they could commit to buying annual passes if SeaWorld does put an end to the live marine life performances. It's at that point activism can pass the baton to what would be a good business decision if folks have pledged actual money toward future visits.
Sooner of later, there will be a compromise. Wall Street is already starting to warm up to SeaWorld. Goldman Sachs upgraded SeaWorld to "buy" on Monday, raising its price target from $18 to $26. After back-to-back years of attendance declines across its collection of parks, the climate is ripe for a rebound. With a new thrill ride on the way for 2016, it seems as if at least one analyst is encouraging clients to get on the ride.