Virtual reality is used in theme-park rides to give people the illusion of sitting in a fighter jet fending off aliens or in a helicopter fighting gargoyles. But SeaWorld is thinking of emphasizing the reality part of the technology.
This summer, it will equip its Kraken roller coaster with VR goggles, sending riders through an underwater scene. But discussing 2016 earnings with analysts last week, SeaWorld executives revealed they are looking at virtual reality incorporating the company’s live animals too.
“We also have a version of virtual reality for our animals, where you actually see them live and things that you can't possibly see as a human today and experiences that you can't experience except through virtual reality,” Chief Executive Officer Joel Manby told analysts. “And so we're testing both the basically ride-based film product as well as with our live animals. Very excited about it, and it could take our (capital expenditures) down over time and we'll monitor it and learn from each execution.” Also during the earnings call, SeaWorld executives gave many details about what they’re doing to move the business in the right direction.
It was a lackluster year, with overall attendance decreasing by about 2.1 percent, or 471,000 visitors. Attendance at Florida theme parks decreased by approximately 547,000 people.
SeaWorld said Latin American visitors comprised 70 percent of the decline — about 383,000 visitors.
This year, “we are seeing the stabilization, if you will, of Latin America,” Chief Financial Officer Peter Crage said. “It's not getting worse. But on the other hand, we don't expect it to ramp up very quickly. So we are essentially neutral in our outlook for 2017, neutral that we'll lap on 2016, but without a significant recovery from Latin America.”
The drop in Brazilian visitors led to 80 percent of the company’s drop in earnings before interest, taxes, depreciation and amortization, Manby said. Brazil has been mired in a recession and political turmoil.
SeaWorld in San Diego has experienced some softness in attendance after its traditional killer whale shows ended in January. The new orca encounter featuring more natural behaviors will not open until May. Company executives are “accelerating our marketing spend in the Los Angeles area to let our guests know that they can still experience orcas … during the interim period,” Crage said.
Manby said he’s “incredibly confident for the full year in California.” SeaWorld is trying hard to control expenses, and its costs of food, merchandise and other items decreased 3 percent.
Operating expenses for 2016 increased by 4 percent, largely due to wage and merit increases and an increase in equity compensation expense of $10.2 million.
SeaWorld is also changing the way it elects board members.
Beginning with the directors up for election in 2017, shareholders will elect them to a one-year term rather than to three-year terms.