Crowds thinned at theme parks
Fiesta Texas and Seaworld hit hard
Last year, ticket sales collapsed at two of San Antonio’s biggest attractions, Seaworld and Six Flags Fiesta Texas, and their parent companies hemorrhaged revenue as COVID-19 forced park closures and crowd restrictions.
In its 2020 earnings report, Seaworld Entertainment on Thursday said 6.4 million people visited its 12 theme parks in 2020, a drop of 71.8 percent from 2019.
It was even worse at Six Flags’ 26 parks, which saw attendance slide 79.3 percent from the year before, to 6.8 million visitors.
Neither company breaks out visitor numbers for individual parks. But San Antonio managers have acknowledged their parks experienced the same economic shock as the rest of the city’s leisure and hospitality industry.
Even after stay-at-home orders were lifted last spring, travelers largely stayed home. Hotels, restaurants, bars and destinations such as Seaworld and Six Flags struggled. Between December 2019 and December 2020, the local visitors industry shed 6.6 percent of its jobs, according to the Bureau of Labor Statistics.
Along with the River Walk and the Alamo, the theme parks are San Antonio’s most popular tourist attractions.
Seaworld Entertainment, based in Orlando, Fla., lost $312.3 million in 2020 — swinging from a profit of $89.5 million the year before — on revenue of $431.8 million. That was down 69 percent from revenue in 2019.
Arlington-based Six Flags recorded a loss of $423 million on revenue of $357 million last year. Revenue fell 76 percent from 2019, when the company reported earnings of $179 million.
Seaworld San Antonio and
Six Flags Fiesta Texas were shut down from mid-march to midjune. They’re currently operating under rules that limit attendance capacity to 75 percent.
Top executives at both companies said they expect 2021 to improve as newly vaccinated customers venture out, looking to be entertained.
“Our focus is to open all of our parks for the 2021 season and be prepared to satisfy the pent-up demand we anticipate for outdoor entertainment close to home,” Six Flags CEO Mike Spanos said.
In a research note Thursday, CFRA stock analyst Tina Amobi agreed, saying the theme park operator “is positioned to reap some pent-up demand with the anticipated widespread availability of vaccines” in the second half of 2021.
Investors were also optimistic. Seaworld Entertainment shares closed Thursday at $45.93, up 11 percent, after its earnings report.
Six Flags shares climbed 4.4 percent to $45.50 Wednesday, when it released its 2020 earnings report.
But others question whether theme parks will return to business as usual this year.
“Theme parks and government officials are still wondering what the impact of these COVID variants are going to be,” theme park consultant Dennis Speigel said. “Will it raise its ugly head and have an impact? That’s the question.”
In a call with stock analysts Thursday, Seaworld interim CEO Marc Swanson said international travelers, who make up about 10 percent of the parks’ visitors, have largely disappeared. The parks are relying on local season pass-holders and visitors who live within a few hours of the theme parks.
“While the COVID-19 pandemic severely impacted our operations with park closures in the spring, followed by restricted openings including capacity limitations, our (managers) worked collaboratively to find ways to operate within the health and safety guidelines established by federal, state and local governments,” he said.
He also highlighted new yearround operations at Seaworld San Antonio. The park began opening on weekends in January and February for the first time in a decade.
Seaworld and Six Flags officials said in their earnings calls that new park festivals are attracting guests and increasing their spending at the parks.
Seaworld San Antonio is running a new Mardi Gras Festival this month that goes through Sunday. Six Flags Fiesta Texas launched a Fire & Ice winter festival Jan. 9, featuring fire pits and s’mores.
Swanson said Seaworld has also raised food prices at its parks and is increasing admission charges for front-of-the-line access to holiday events.
He said in-park spending jumped to $27.96 per person in 2020, up 9 percent from the previous year.
Traditionally, theme parks make close to 50 percent of their revenue from spending on food, merchandise and extra attractions, such as up-close animal encounters.
Swanson, however, acknowledged that capacity controls at parks were hurting.
“Several parks operated at or near capacity limitations on multiple days,” Swanson said. “If the parks were not capacity-constrained on these days, our performance versus the prior year would have been better than what was realized.”
Seaworld and Six Flags officials said they plan to keep their parks open till later in 2021.
So far, however, California authorities haven’t allowed Seaworld San Diego and two Six Flags parks in the state to reopen their amusement rides.
Even if the California parks are allowed to open rides, visitors will still have to be persuaded to buy tickets, said Martin Lewison, an associate professor of business management at Farmingdale State College in New York.
“In red states like Texas and Florida, there seems to be more of a willingness to go out and play,” he said. “But I think there is a large segment of the public in other parts of the U.S. that’s still nervous about being in the public.”
The theme park companies continued to suffer losses in the most recent quarter.
In the fourth quarter of 2020, Seaworld Entertainment lost $45.5 million on revenue of $154 million, down 48 percent from a year ago. In the same quarter the year before, the company reported a loss of $24.2 million.
Six Flags said it lost $45.3 million on revenue of $108 million in the quarter, a decline of more than 58 percent from the prior year.