The International Association of Amusement Parks and Attractions (IAAPA) is a global organization representing the attraction and amusement park industry. During the Annual IAAPA Conference, held virtually on April 7th and 8th, industry leaders presented information focusing on themes of recovery and resilience. SeaWorld’s Interim CEO, Marc Swanson, served as one of the keynote speakers for this year’s event.
Business and Revenue Enhancement Strategies
SeaWorld Entertainment, Inc. has taken a multifaceted approach to navigate the COVID-19 pandemic. Speaking at the IAAPA Virtual Conference, Marc Swanson discussed how SeaWorld’s executive leadership and Management Team worked collaboratively to address the operational, safety, and wellness challenges presented by the pandemic. SeaWorld’s Management team is led by Interim CEO Marc Swanson, and Founder and Managing Partner of Hill Path Capital and SeaWorld Entertainment Inc.’s Chairman of the Board of Directors, Scott Ross.
The Board’s actions could result in $135 million in enhanced revenue. This figure is based on 2019’s aggregate attendance figures of 22.6 million guests and the following initiatives:
- Increased attention to revenue management with parks’ dynamic pricing structure.
- More attractive park offerings, including new and/or enhanced venues, expanded food and beverage options and refreshed merchandise choices.
- Ongoing development of an in-park mobile app that enables onsite guests to select in-park offerings.
- An upcoming CRM system that will facilitate enhanced guest and valued pass holder communications and mutually beneficial relationships.
- Marketing team organizational changes that will result in more effective promotional campaigns.
The Value of Collaboration
Swanson detailed a series of recent (and ongoing) collaborative actions aimed at “moving the company forward with more creativity and nimbleness than we had before.” Speaking to the value of communication with SeaWorld Entertainment, Inc.’s Chairman of the Board of Directors, Scott Ross, and the Leadership Team, Marc Swanson added, “Having a large investor on the Board allows us to align our goals and move even more confidently and decisively. We were all in this together, and having our Leadership Team and Board in constant communication certainly allowed us to address this crisis head-on.”
SeaWorld Entertainment, Inc. achieved its highest-ever adjusted EBITDA number in 2019. Going into 2020, SeaWorld was poised for another fruitful year. However, during the pandemic, SeaWorld (along with many businesses) was required to shutter operations. These evolving closures lasted from approximately March 16 to June 16, 2020, stripping the company of income during one of its traditionally busiest periods.
Actions Taken to Support Strategic Goals
With ongoing overhead and expenses, taking a “wait and see” approach wasn’t a fiscally feasible option. SeaWorld’s Board of Directors and the Management team developed an “out of the box” approach that has paid off. Marc Swanson succinctly described this evaluative process.
“What we did over the ensuing days, weeks, and months between the shutdown, shoring up our balance sheet and liquidity and the gradual re-opening of our parks, not only allowed us to get through what could have been a devastating stretch but prepared us to actually emerge a much stronger company. Smarter, in many ways. More efficient. More thoughtful in our approach and with an understanding, encouraged and underscored from our Board, that our willingness to make bold, creative and fast business decisions were key to our survival — and then our success.”
The SeaWorld Board and Management Team decreased operational costs and increased the company’s financial flexibility. In addition to deferring or eliminating non-essential expenses, the company greatly reduced or postponed capital spending by putting a hold on the introduction of planned new attractions. Other strategies included:
- Corporate centralization of departments, including human resources and revenue management. Strong focus on internal centers of excellence along with a reduced emphasis on third-party consultants.
- Utilization of undeveloped land enables ongoing reduction of leased building costs and elimination of off-site storage and equipment rentals.
- Ongoing efforts to reduce company-wide utility costs, combined energy efficiency measures, and negotiated rate reductions
- Company-wide operational restructuring to better address parks’ attendance variability and updated line schedules to reflect in-park attendance levels more closely. Variable cost structure supports this operational flexibility.
- Consolidation of media agencies, and better utilization of in-house creative resources, will lower marketing costs. Developing right-sized media spend and flexing that responds to current market conditions and relevant restrictions.