Theme parks aren't flawless operations, and SeaWorld Entertainment (NYSE:SEAS) learned that the hard way on Monday when one of its tamest and iconic attractions malfunctioned at SeaWorld Orlando.
Sky Tower -- an enclosed observation deck that gently rises 400 feet to offer sweeping vistas of the park and neighboring Central Florida attractions -- got stuck midway through its descent on Monday. Roughly 50 passengers had to wait for three hours before park technicians were able to get the ride back down.
SeaWorld didn't shy away from the incident, even tweeting about it when it happened and again after all of the guests were safely on their way. That didn't stop activists and Blackfish-fueled critics from firing back with the obvious jokes and comparisons.
@SeaWorld it must have been so bad for them humans to be so cramped in such a small area for so long. I bet they felt really claustrophobic!— Michael Wayne Porter (@MichaelPorter15) December 21, 2015
@SeaWorld All victims were approved for release??? Not going to keep a few for conservation?— Crusty Crab (@9af0f531e5684db) December 22, 2015
@SeaWorld Did the guests have to bounce a ball on their noses so that they were allowed out? Seaworld sucks.— Danny B (@RuprechtMtl) December 21, 2015
It's not a good day when you heave a juicy softball for naysayers to hit out of the park, but the Sky Tower mishap is also the perfect metaphor for SeaWorld as a company these days. It's stuck. Everything is up in the air. There isn't an easy way out.
SeaWorld is starting to show some signs of life. Turnstile clicks have risen 0.2% across its network of theme parks through the first nine months of 2015, a welcome break from back-to-back years of 4% declines. Folks are playing less, on average, for a day at a SeaWorld park -- a strong indicator that it still needs to discount aggressively to woo back day guests -- but at least the defections have eased.
A new CEO was brought on earlier this year, and he's already moved to eliminate controversial orca performances at the original SeaWorld San Diego park next year. He's emphasizing rides and ramping up the chain's conservation message. These moves haven't silenced activists, but the closer he can align his company with that of local zoos or larger theme park operators including Disney (NYSE:DIS) and Comcast's (NASDAQ:CMCSA) (UNKNOWN:CMCSK.DL) Universal the easier it will be to find sanctuary from the social media storm.
Lost in all of the mess is that SeaWorld itself hasn't been a lousy investment in 2015. The stock is up 8.3% through yesterday's close, and if you consider its generous payout the stock's total return is north of 13%. That's in line with Disney's total return this year. Comcast is actually trading slightly lower in 2015.
SeaWorld stock may be beating the market, but that doesn't mean that this has been a successful year. The financials are still in a holding pattern. Revenue and adjusted EBITDA have been essentially flat through the first three quarters of 2015. Net income is quite a bit lower.
That hasn't been the case at its larger rivals. Comcast is experiencing a spike in attendance on the strength of Harry Potter-themed areas, and Disney seems to consistently grow both ends of its income statement -- even when it seems to be phoning it in on the theme park front.
So, yes, SeaWorld is stuck. People want to get off. The view may be nice, but it's hard to take in the bigger picture when you would rather be somewhere else. CEO Joel Manby will have his hands full in 2016 if he wants to turn things around, but even if he gets Sky Tower up and running again he needs to make sure that it's not just going in circles. SeaWorld investors have been there before. It's not a fun ride.