Sea World Profits Soar by 300%

[Rumors Rocks]

http://www.wdwinfo.com/news/seaworld/SeaWorld_profits_up_300_percent.htm

SeaWorld Entertainment reports a 300 percent profit jump in 2012. Interestingly, this news comes after the company began considering a public stock offering, hoping to raise at least $100 million. 2012 earnings hit $77.4 million; in 2011, earnings were only $19.1 million. Revenue for the 10 SeaWorld parks was up 7 percent to $1.4 billion. In spite of higher ticket prices, ticket sales were up 7 percent to $884 million. Attendance for the year grew as well, with more than 24 million visitors entering the company's theme parks. Click link for more details.

 

[Peter Pirate 2]

I love sea world, even though I hate that there is no more free beer.

Once again, they are truly trying vs. Disney who is truly coasting. Disney will feel the effects of sea world and universal for real in the next couple of years.

 

[OklahomaTourist]

I love sea world, even though I hate that there is no more free beer.

Once again, they are truly trying vs. Disney who is truly coasting. Disney will feel the effects of sea world and universal for real in the next couple of years.

I think this is a very astute observation.

Disney's problem is that kids these days, while they enjoy Disney, the world is *not* a "Wonderful World of Disney" Sunday at 6pm on NBC world anymore, as it was in the 60's and 70's. Kids aren't being bathed in Snow White and Mickey and Pooh now the way they were back then, which means that kids, while still enjoying and understanding Disney-based fun, are also getting ideas for fun that are anything but Disney.

How Disney adjusts to this at a park and "experience" level remains to be seen. I personally think the leg up they still have, but have also allowed to ebb in the last few years, is that unequalled commitment to customer service, the cleanliness of the parks, the WDW "experience" where quality isn't Job 1, it's the "only" job. I do think Disney has lost a bit of their edge in that regard, and I also think its why the last head of Disney Parks was shown the door. And I'm not sure that building scads of new DVC properties and timeshares is what Walt envisioned, either. Things aren't so bad they can't be turned, but Disney has internal and external challenges both now and in the coming years. Going to take some careful navigation for them to succeed.

 

[Peter Pirate 2]

I think this is a very astute observation.

Disney's problem is that kids these days, while they enjoy Disney, the world is *not* a "Wonderful World of Disney" Sunday at 6pm on NBC world anymore, as it was in the 60's and 70's. Kids aren't being bathed in Snow White and Mickey and Pooh now the way they were back then, which means that kids, while still enjoying and understanding Disney-based fun, are also getting ideas for fun that are anything but Disney.

How Disney adjusts to this at a park and "experience" level remains to be seen. I personally think the leg up they still have, but have also allowed to ebb in the last few years, is that unequalled commitment to customer service, the cleanliness of the parks, the WDW "experience" where quality isn't Job 1, it's the "only" job. I do think Disney has lost a bit of their edge in that regard, and I also think its why the last head of Disney Parks was shown the door. And I'm not sure that building scads of new DVC properties and timeshares is what Walt envisioned, either. Things aren't so bad they can't be turned, but Disney has internal and external challenges both now and in the coming years. Going to take some careful navigation for them to succeed.

Very nice post.

The problem though is that the Disney BOD and mgmt. has to stop thinking like the walmart BOD and mgmt. and remember from whence they came. The profits need to be Bourne from the formula that made Disney magical in the first place. Otherwise, anyone can take that mantle and make it their own.

 

[MommaBerd]

I think this is a very astute observation. Disney's problem is that kids these days, while they enjoy Disney, the world is *not* a "Wonderful World of Disney" Sunday at 6pm on NBC world anymore, as it was in the 60's and 70's. Kids aren't being bathed in Snow White and Mickey and Pooh now the way they were back then, which means that kids, while still enjoying and understanding Disney-based fun, are also getting ideas for fun that are anything but Disney.

I agree with this and I *so* wish that Disney would air more of the classic Mickey cartoons. My kids really enjoyed the "ReMicks" (I think that was what they were called) they would show on Disney Channel. We also have a "Have a Laugh" DVD that they like to watch. But, I think there is something to be said about making it more mainstream. Right now, my 9 & 6 yo DS just think of Mickey as Mickey Mouse Clubhouse and that's "for babies!"
It's been almost two years since we've been to the parks. Do they even run any of the classics on monitors in the queues? I don't think they do.

I personally think the leg up they still have, but have also allowed to ebb in the last few years, is that unequalled commitment to customer service, the cleanliness of the parks, the WDW "experience" where quality isn't Job 1, it's the "only" job.

THIS and the story of Walt himself is why my husband loves Disney. It goes straight to his entrepreneurial, business-minded heart! If guest service falters, I doubt we'd spend much $ there anymore.

 

[Peter Pirate 2]

I agree with this and I *so* wish that Disney would air more of the classic Mickey cartoons. My kids really enjoyed the "ReMicks" (I think that was what they were called) they would show on Disney Channel. We also have a "Have a Laugh" DVD that they like to watch. But, I think there is something to be said about making it more mainstream. Right now, my 9 & 6 yo DS just think of Mickey as Mickey Mouse Clubhouse and that's "for babies!"
It's been almost two years since we've been to the parks. Do they even run any of the classics on monitors in the queues? I don't think they do.

THIS and the story of Walt himself is why my husband loves Disney. It goes straight to his entrepreneurial, business-minded heart! If guest service falters, I doubt we'd spend much $ there anymore.

While I agree with your post, as an AP holder and frequent guest, I can say that customer service is nowhere near what it once was. It is still good overall but no longer the stuff college classes were once the subject of.

 

[lockedoutlogic]

I tend to take a simpler approach on news such as this...

They are price gouging...they all are. The rodents have lead the way.

The perception is that the economy is cranking and the people are going back in droves...
It remains to be seen if all that is an elaborate red herring (take a guess what I think?)

But skipping that...they are just taking in more
Due to massive cost increases.

And while their benefit outlays are rising...wage
Costs have been flat/stagnant in Orlando since the 90's...the early 90's. prices are going up well above cost of living, CPI, or normal inflation. And the drones are making less pound for pound.

I know the figures from Disney exactly 10 years ago (job)...so I can draw some conclusions in the following areas:

Hotel rates...up significantly - but perhaps not as significant as in other areas.

Vacation club...has grown significantly... Annual guaranteed fees and the upfront.
Just to put it into numbers what DVC has generated just from the point
Purchase...I remember there were about 130,000 MEMBERS (not points) sold about 4 years ago...if you assume that each bought 150 points (that's low) and bought them at an average of $50 a point (that's probably low too)...then that's 975 million in upfront payments alone. Wow...if you think about it. Easy to build units when it's cost you absolutely nothing.

Ticket prices...almost double of ten years ago...a 95% increase. Normal inflation over that span may be an aggregate range of 30-40%.
Again...wow.

Food prices. I'm sure I could search al gore's Internet and find the actual cost increases - particularly the last 7 years...but I'll just make a guesstimate.
Up 30-50% on most if not all items.
Just a couple of hard examples:
Victoria and Albert cost in 2004: $70 per person
Today: $135 per person ...just under a 92% increase

Filet Mignon at signature restaurant _____ (sadly it doesn't matter)...we'll say Jiko
2003 era price: $28.00
2013 price: $ 44.00...a modest 57% bump

Uh huh...

We're being screwed...all of us. This money goes to corporate whim and dividends, not to raises for cast members working small world. It's all our faults...yours and mine. There is no supply and demand reaction to prices - Seaworld, universal, the overlords...
...charge whatever they want and have to beat people away. Only recessions cut the skin.
Life in a surreal vacuum. Like college (ironically something else that costs waaaayyy too much)

 

[lockedoutlogic]

Very nice post.

The problem though is that the Disney BOD and mgmt. has to stop thinking like the walmart BOD and mgmt. and remember from whence they came. The profits need to be Bourne from the formula that made Disney magical in the first place. Otherwise, anyone can take that mantle and make it their own.

Why should they change?

There is no accountability or consequence. Carte Blanche.

Look at us...they built a billion dollar band-aid for a travesty of a park in California based on cars...whose sequel was so bad they should have fired everybody at Pixar and whose mass produced junk merchandise is an embarrassment even by walmart/Disney standards...

And there are thousands on this board and others all geeked up about getting their "slice" of it in Orlando. "I bet it's Carsland...I can't wait for DS to go...announcement must be In may! MAGIC!"

 

[Peter Pirate 2]

I tend to take a simpler approach on news such as this...

They are price gouging...they all are. The rodents have lead the way.

The perception is that the economy is cranking and the people are going back in droves...
It remains to be seen if all that is an elaborate red herring (take a guess what I think?)

But skipping that...they are just taking in more
Due to massive cost increases.

And while their benefit outlays are rising...wage
Costs have been flat/stagnant in Orlando since the 90's...the early 90's. prices are going up well above cost of living, CPI, or normal inflation. And the drones are making less pound for pound.

I know the figures from Disney exactly 10 years ago (job)...so I can draw some conclusions in the following areas:

Hotel rates...up significantly - but perhaps not as significant as in other areas.

Vacation club...has grown significantly... Annual guaranteed fees and the upfront.
Just to put it into numbers what DVC has generated just from the point
Purchase...I remember there were about 130,000 MEMBERS (not points) sold about 4 years ago...if you assume that each bought 150 points (that's low) and bought them at an average of $50 a point (that's probably low too)...then that's 975 million in upfront payments alone. Wow...if you think about it. Easy to build units when it's cost you absolutely nothing.

Ticket prices...almost double of ten years ago...a 95% increase. Normal inflation over that span may be an aggregate range of 30-40%.
Again...wow.

Food prices. I'm sure I could search al gore's Internet and find the actual cost increases - particularly the last 7 years...but I'll just make a guesstimate.
Up 30-50% on most if not all items.
Just a couple of hard examples:
Victoria and Albert cost in 2004: $70 per person
Today: $135 per person ...just under a 92% increase

Filet Mignon at signature restaurant _____ (sadly it doesn't matter)...we'll say Jiko
2003 era price: $28.00
2013 price: $ 44.00...a modest 57% bump

Uh huh...

We're being screwed...all of us. This money goes to corporate whim and dividends, not to raises for cast members working small world. It's all our faults...yours and mine. There is no supply and demand reaction to prices - Seaworld, universal, the overlords...
...charge whatever they want and have to beat people away. Only recessions cut the skin.
Life in a surreal vacuum. Like college (ironically something else that costs waaaayyy too much)

Now I'm really depressed...

 

[tjkraz]

Interesting thing about this "300% increase" is that it's a pittance, relatively speaking. Sea World profits went from $19 million in 2011 to $77 million in 2012.

By comparison, Disney Parks profits were $1.9 BILLION (with a "B") in fiscal 2012.

In Sea World's case, it's not all that hard to post such an impressive percentage increase when you're starting with such a small number. Discontinuing the free beer may have been responsible for half of the increase.

That's not to say I'm defending Disney, of course. I agree with about 95% of what lockedoutlogic had to say. But part of what works against Disney fans is the reality that WDW won't get the type of growth other parks are seeing from new attractions.

Prior to Harry Potter, Islands of Adventure only drew 4.2 million in 2009. By 2011 that figure had reportedly grown to 7.6 million, but that's still less than even Hollywood Studios by a sizable margin (9.7 mil.)

IOA nearly doubled its draw on Harry Potter alone. There is absolutely nothing Disney could build at DHS--particularly not for the reported $250 million cost of WWoHP--which would have a similar effect.

Harsh reality.

In the long run, Disney does have to worry about future losses. So far they've been able to survive relatively flat attendance (little growth) through price increases. But as always, the question is how quickly are they willing to re-invest and how much are they willing to spend.

 

[lockedoutlogic]

Interesting thing about this "300% increase" is that it's a pittance, relatively speaking. Sea World profits went from $19 million in 2011 to $77 million in 2012.

By comparison, Disney Parks profits were $1.9 BILLION (with a "B") in fiscal 2012.

In Sea World's case, it's not all that hard to post such an impressive percentage increase when you're starting with such a small number. Discontinuing the free beer may have been responsible for half of the increase.

That's not to say I'm defending Disney, of course. I agree with about 95% of what lockedoutlogic had to say. But part of what works against Disney fans is the reality that WDW won't get the type of growth other parks are seeing from new attractions.

Prior to Harry Potter, Islands of Adventure only drew 4.2 million in 2009. By 2011 that figure had reportedly grown to 7.6 million, but that's still less than even Hollywood Studios by a sizable margin (9.7 mil.)

IOA nearly doubled its draw on Harry Potter alone. There is absolutely nothing Disney could build at DHS--particularly not for the reported $250 million cost of WWoHP--which would have a similar effect.

Harsh reality.

In the long run, Disney does have to worry about future losses. So far they've been able to survive relatively flat attendance (little growth) through price increases. But as always, the question is how quickly are they willing to re-invest and how much are they willing to spend.

Agree...and the fact that universal is a trout, Seaworld a minnow, and Disney is the whale in the sea debunks the proverbial "universal is building...Disney has to respond" argument.

These financials prove that they-in fact - don't.

So while the price increases are ridiculous across the board...Disney is raking revenues and profits on an industrial scale in comparison.

And your right that nothing they do will generate significant bump. They did their massive investment decades ago...now they can enjoy the bread and circuses.
Which means the impetus for large expansion is not there...which means it should never shock anyone when Disney doesn't "do the obvious" and put a copy of every single thing in Orlando. From their perspective, what's the point?
Everyone's already booked.

 

[Polydweller]

Although on a percent basis profit appears to look good the important figure is revenue which only rose 7%. Profit was only up $58 million and that's across 10 parks worldwide. The comparisons posters are making to Disney and implying Disney will feel the effects are just fanciful. Disney Parks profit is close to $5.5million per day and the make all of Sea World's total in 2 weeks. Sea World really is a very small fry in this pond.

 

[bcrook]

Although on a percent basis profit appears to look good the important figure is revenue which only rose 7%. Profit was only up $58 million and that's across 10 parks worldwide. The comparisons posters are making to Disney and implying Disney will feel the effects are just fanciful. Disney Parks profit is close to $5.5million per day and the make all of Sea World's total in 2 weeks. Sea World really is a very small fry in this pond.

This is only slightly . But I just made the connection to the saying "don't be a such a small fry". Fry = A baby fish. It took the context of Sea World to clear that up for me. The problem with the allusion is that fry refers to age more than size I think. And SeaWorld is older than most of WDW. But none the less, I am enlightened.

Recently, I discovered the meaning of "Happy as a clam...". The rest of that phrase makes it more understandable. "...at high water". Another Sea World type connection. Clams at high tide are much happier than low tide.

Now back to debate about how Disney has so many "clams" that they don't care how many new "clams" Sea World gets.

 

[bcrook]

Agree...and the fact that universal is a trout, Seaworld a minnow, and Disney is the whale in the sea debunks the proverbial "universal is building...Disney has to respond" argument.

These financials prove that they-in fact - don't.

So while the price increases are ridiculous across the board...Disney is raking revenues and profits on an industrial scale in comparison.

And your right that nothing they do will generate significant bump. They did their massive investment decades ago...now they can enjoy the bread and circuses.
Which means the impetus for large expansion is not there...which means it should never shock anyone when Disney doesn't "do the obvious" and put a copy of every single thing in Orlando. From their perspective, what's the point?
Everyone's already booked.

Everyone agrees that one of Disney's marketing plans is to keep customers on site for the entire stay. Magical Express, dining Plan, EMH, etc.

Sea worlds expansion/growth and Universal's widely popular improvements have to be contributing to angst in Disney. The rivals are stealing days, souvenir money, meals, and rooms. In essence they improvements at those parks are on doing the golden period where most people were content staying on site the whole time.

I am still trying to figure out how Disney thinks Magicbands are going to help keep people on site. The only thing I can think of is by limiting access to the headliners, people will think they need two days in each park to ride all the rides. If people are given three FP+ a day to book in advance. People will book them even if they may skip the park and go to Antarctica. But, if the FP+ become very valuable, people may decide they can't afford to skip them. It is a stretch, but I haven't seen anything else to convince people to stay on site.

 

[eliza61]

Everyone agrees that one of Disney's marketing plans is to keep customers on site for the entire stay. Magical Express, dining Plan, EMH, etc.

Sea worlds expansion/growth and Universal's widely popular improvements have to be contributing to angst in Disney. The rivals are stealing days, souvenir money, meals, and rooms. In essence they improvements at those parks are on doing the golden period where most people were content staying on site the whole time.

I am still trying to figure out how Disney thinks Magicbands are going to help keep people on site. The only thing I can think of is by limiting access to the headliners, people will think they need two days in each park to ride all the rides. If people are given three FP+ a day to book in advance. People will book them even if they may skip the park and go to Antarctica. But, if the FP+ become very valuable, people may decide they can't afford to skip them. It is a stretch, but I haven't seen anything else to convince people to stay on site.

Truthfully I don't think much is going to keep a growth in folks staying on site. Now let's discount folks like us here on the dis. for whatever reason we are bonafide disney-philes. we don't count. LOL

I think the mouseworld has some head winds from the following arenas.

1) Todays kids simply have more "options". some one mentioned the 50's and 60's, well back then people didn't think about zipping around the world every year. back then air travel was reserved for the well off. Not today. heck, kids take major trips for the senior trip. My neice spent a week in Costa Rica with her 8th grade spanish club. We make our base in disney mainly because we have our dvc here but my kids expect to do universal and sea world.

2) vacationers are getting very savvy for their money. Disney is almost locked into offering discounts and free dining. thanks to the internet folks can get great vacation deals else where. cruising is exploding, all inclusives are popular.

3) bang for the buck. This is where my concern with disney lies.

 

[treehugnmama]

We are dvc and going to okw for 7 days and decided to try different things we have no Disney park days planned. We want to do discovery cove so it makes sense to do all of the seaworld parks as we will have them for 14 days. The tickets for Disney are getting a bit out of hand. But we still love the resorts. We cook our own meals as we no longer enjoy the dining we do like the bass excursion and will continue to vacation there but we are kinda over the parks.

 

[bcrook]

We are dvc and going to okw for 7 days and decided to try different things we have no Disney park days planned. We want to do discovery cove so it makes sense to do all of the seaworld parks as we will have them for 14 days. The tickets for Disney are getting a bit out of hand. But we still love the resorts. We cook our own meals as we no longer enjoy the dining we do like the bass excursion and will continue to vacation there but we are kinda over the parks.

I have DVC too, and OKW seems to be a good location to take advantage of the off-site possibilities. I am excited to visit Sea World and the New Antarctica in June. BUT, I will be staying at the farthest location - Kidani. As DVC goes, I love Hilton Head.

 

[umichigan10]

It almost seems like Disney is toying with the opposition. They obviously aren't feeling any real drop in attendance or revenue with the competition upping it's game. I feel like if that day ever did come, WDW would put in something killer (Star Wars land comes to mind) that would decimate the opposition. But for now, why bother? As PPs have said, they're doing just fine with what they have right now. No need from their perspective to spend millions when it isn't just necessary (much to the disappointment from me and every other Disney nut here who would love to see the amazing stuff WDI could churn out on a regular basis)

 

[DanInMN]

Disney World has huge fixed costs, and relatively low variable costs. So when someone goes offsite for lodging, food, or entertainment it takes a big bite out of profitability.

Unless they give people a reason to return, they will go elsewhere (cruises, Europe, National Parks, Washington DC, Hawaii...). This is why they built new Fantasyland and Art of Animation and why they are rebuilding Downtown Disney.

IMHO they need to do more. New attractions are needed at Epcot and DHS, extend the monorail, and perhaps even a new park. If they wait until attendance starts to slide, they will have waited too long.

They also should not leave areas to decay for years - like they did with the MK gondola and 20,000 Leagues Under the Sea, Discovery Island, River Country, or Pleasure Island. To me these feel like disrespect for Walt.

 

[lockedoutlogic]

It almost seems like Disney is toying with the opposition. They obviously aren't feeling any real drop in attendance or revenue with the competition upping it's game. I feel like if that day ever did come, WDW would put in something killer (Star Wars land comes to mind) that would decimate the opposition. But for now, why bother? As PPs have said, they're doing just fine with what they have right now. No need from their perspective to spend millions when it isn't just necessary (much to the disappointment from me and every other Disney nut here who would love to see the amazing stuff WDI could churn out on a regular basis)

Jeez...did you have to go all "end game" so fast?

You should use the rooks and bishops before unleashing the queen