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Monday, December 13, 2010

big plans SeaWorld for 2011

big plans SeaWorld for 2011 ; By most accounts, 2010 is a year that the SeaWorld parks would just as soon put behind them. They’ve suffered through slumping attendance, recent companywide layoffs, the unexpected deaths of three killer whales, including one in San Diego, and the death of an orca trainer that cast a pall over the parks’ signature Shamu attraction.

The resilient theme park operation, though, has no intention of wallowing in its misfortunes, instead launching an unprecedented spending blitz in 2011 that in San Diego will include a revamped Shamu show and a sea turtle attraction that will feature a gaming wall, interactive map and a ride called Riptide Rescue designed to appeal to the “tween” crowd.

As San Diego’s biggest tourist attraction, with more than 4 million visitors annually, SeaWorld is a key driver for the San Diego tourist industry. And when its business prospers or slumps, so does the overall industry.

Not only is the company a key advertising partner with the San Diego Convention and Visitors Bureau, but it also spends millions each year on its own promoting the park and, by extension, the San Diego region, say tourism officials.


SeaWorld executives credit their new owner, the Blackstone Group, for the generous investment in new attractions, which are the lifeblood of any amusement park hoping to thrive amid keen competition from other leisure industry offerings. During financially challenging times when consumers are far less willing to spend freely, substantial improvements are even more critical.

Over the next year, the capital investment will be more than $180 million, the most the 10-park entertainment group has ever spent, even more than in 2007, when a whole new water park was built in Orlando, company officials say.

“The key thing is there will be more new attractions at SeaWorld than you’ve seen in the past,” said John Reilly, the new president at the San Diego park. “In June, we’ll open the sea turtle attraction, which only SeaWorld could create. You’ll actually be able to walk into the space, and the acrylic will be curved so you’ll have more than 60 sea turtles and thousands of fish swimming overhead.”

Reilly, who got his start in theme parks as a teenager selling popcorn at Busch Gardens in Virginia, said he’s encouraged by Blackstone’s commitment to the SeaWorld operation. Between the new Shamu show, the sea turtle attractions and the Blue Horizons aquatic extravaganza that debuted this year, the company’s investment will be among the largest ever made in San Diego.

“Our investors know a great deal about the hospitality and tourism segment and have holdings in hotels and other theme parks, and, as we do, they want to see growth,” he said. “In the theme park industry, the surest way to get growth is to enhance your guest experience through compelling new attractions.”


Trainer’s death casts pall

A key question still dogging the SeaWorld parks, however, is when trainers will be permitted to get back into the water with the killer whales during the popular Shamu show. The attraction was altered this year after Dawn Brancheau, a trainer at the Orlando park, was killed when Tilikum, a 12,000-pound male orca, dragged her into the pool and battered her in front of spectators.

In August, the U.S. Occupational Safety and Health Administration fined SeaWorld $75,000 and cited it for a “willful” violation by exposing workers who train killer whales to drowning or being struck by the animals. Although a new show is planned next spring to replace the five-year-old “Believe” spectacle, there will be none of the in-water interaction between trainers and the killer whales that makes the show especially captivating.

“We have an objective to return trainers to the water, but we’re not prepared to do that until we can assure we have the safest possible environment, and that’s something we’re still working through,” said Jim Atchison, president of Orlando-based SeaWorld Parks & Entertainment. “It’s an important objective for a number of reasons. Doing water work with the animals in our care is really the best way to care for them, and it certainly makes for a more dynamic show.”

Blackstone’s role

As tough a year as 2010 has been, Atchison says he wants to stress what he believes are much-improved prospects for 2011. Just one year since acquiring the SeaWorld Parks & Entertainment group from beer giant Anheuser-Busch InBev, Blackstone is prepared to do what it takes to raise the profile of its new holdings, Atchison said.

Despite recent layoffs of 350 employees in the organization, including 80 in San Diego, the ownership remains committed to SeaWorld parks’ animal population and those who care for and train them, he stressed. In fact, no one within that segment of the operation was laid off, he emphasized.

Blackstone, a New York private-equity firm with significant amusement park holdings, has 50 percent stakes in Universal Studios Orlando and Merlin Entertainments Group, which operates Legoland in Carlsbad and the Madame Tussaud’s wax museums.

“When we were part of Anheuser-Busch, we were part of an international conglomerate operating various businesses in the far reaches of the world,” said Atchison. “Before, our strategic focus had to be aligned with the objectives of Busch and its beer brands, and now it is focused just on SeaWorld Parks & Entertainment.”

For example, under Busch, the parks featured beer samplings, Anheuser-Busch gift shops and Clydesdale hamlets. And in San Diego, the entertainment group built a large Anheuser-Busch Hospitality Center in the ’90s, representing money that could have been used differently had SeaWorld not been a subsidiary of Busch.

“We recognize the benefits that are offered by having more investments in our parks, something we probably wouldn’t have had under Anheuser-Busch,” Atchison said.

Will attendance rebound?

While SeaWorld is extremely circumspect about its finances and attendance, it’s no secret that both have suffered in the past couple of years. According to the nonprofit Themed Entertainment Association, the number of visitors to the San Diego park plunged more than 12 percent in 2009 compared to a year earlier. And across the SeaWorld Parks organization, attendance is expected to drop 6 percent this year, with revenues tumbling by a like amount, according to Moody’s Investor Service. The parks, though, can expect a rebound in 2011 when attendance is forecast to grow by 3 percent and earnings by 10 percent over 2010, says Moody’s.

Although the marine parks’ lagging attendance this year is clearly tied to the economy, the Orlando trainer’s death and the revamped orca shows are likely also responsible, said Moody’s senior analyst John Puchalla.

Despite the new Shamu show that is coming in 2011, “we anticipate it will take several years to rebuild the same level of audience interest,” states the Moody’s credit report, “but expect attendance to increase in 2011 as the recovery from the difficult events of 2010 continues.”

Theme park expert Robert Niles said he’s not surprised at all by Blackstone’s reorganization of SeaWorld and its plans to pump significant dollars into the parks. He noted, however, that the San Diego park, as a city lessee, faces more unique challenges because of a requirement under its master plan that at least 75 percent of its attractions have an educational or conservation element. As a result, over-the-top thrill rides aren’t as likely to get built in San Diego.

“It’s easier to build roller coasters in the Orlando park, where they have two of the best in America,” Niles said. “San Diego’s Journey to Atlantis is like a roller coaster, but it’s not nearly as elaborately themed as the same ride in Orlando.

“San Diego, though, is still the largest metro area where SeaWorld operates, so there’s a huge local marketplace to draw from.”

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