SeaWorld backs out of deal for hotel at San Diego park

Nine months after signing a deal to bring a SeaWorld-branded hotel to the San Diego theme park, SeaWorld Entertainment Inc. has decided to abandon the effort.

In a quarterly report released Tuesday, the Florida company said that in September it decided to not proceed and “terminated the agreement” with San Diegobased Evans Hotels.

As part of that termination, SeaWorld said it recorded a loss of $2.8 million in expenses and fees.

The mention in the report was the first time it became publicly known that the company was no longer interested in the project.

A day earlier, SeaWorld interim Chief Executive John Reilly was asked by an analyst during its quarterly earnings call about the company’s interest in hotel development. Reilly’s response suggested that hotels are not a near-term priority.

“Longer term, I’d say, we still believe lodging is a priority for us,” he said. “However, and as we look at this revamped capital strategy, we have done some realigning of our strategic priorities to make sure that … attendance-driving attractions in our parks are a top priority.”

Evans Hotels, which already has two Mission Bay resorts near the marine park — the Bahia and Catamaran — called the decision disappointing.

SeaWorld has been experiencing a rebound in attendance and revenue after years of steady declines since the 2013 release of the anti-captivity documentary “Blackfish.”

The revival of the business parallels the debut of more high-profile park attractions, most notably thrill rides such as the Electric Eel coaster that made its debut in San Diego this year.

The move to develop hotels within the SeaWorld parks — similar to what Disney and Universal have done at many of their resorts — originated with former CEO Joel Manby, who resigned this year. The agreement formalized by SeaWorld was struck a month before Manby left the company.

“I’ve argued for years that theme parks should do more hotel building,” said Martin Lewison, an assistant business professor at Farmingdale State College in New York who has advised amusement parks. “But it is a diversification, and there certainly is a philosophy in business that diversification can be dangerous because it can prevent focus and takes your eye off your core business.”