Like Shamu, SeaWorld leaps after IPO: Why theme parks are doing well
A killer whale appears during its performance in its show 'Believe' at Sea World.
What's black and white, weighs 10,000 pounds, and is now publicly traded? Shamu, the orca, of course.
SeaWorld Entertainment debuted on the New York Stock Exchange today, and investors applauded as exuberantly as if they had just seen Shamu do a triple back flip. SeaWorld and other publically traded theme parks have outperformed the stock market this year.
Theme parks, much like the children whose earnest screams fuel them, are resilient. The $13 billion a year industry saw revenue grow 2.9 percent last year, according to IBISWorld. And, attendance at big California parks rose by double digits, says John Robinson, chief executive officer of the California Attractions and Parks Association.
“Even when the economy isn’t doing well,” explains Robert Niles, editor of ThemeParkInsider.Com, “theme parks tend to be a popular substitute for people who may have considered more expensive vacation destinations.”
Niles says many of the big amusement parks have made major investments in new characters and attractions. Universal opened the Wizarding World of Harry Potter in 2010, for example, and SeaWorld is about to debut a $100 million attraction in Orlando based on Antarctica and penguins. “People love penguins. They're cute,” Niles says.
And those investments are paying off. SeaWorld, which has 11 theme parks, has swung from a loss to a surging profit in just two years.
At Disney and Universal theme parks in Florida, says character performer Sawyer Stroud, “During the spring break-Easter peak season, it was the busiest I’ve seen the parks in the seven years I’ve been here.”
The rising share prices of theme parks are also a sign that investors are expecting the economy -- and discretionary consumer spending -- to improve, says Nima Samadi, a senior analyst at IBISWorld. “The story with this is as the economy recovers so will amusement and theme parks continue to grow,” he says.
In other words, the economic roller coaster ride may be coming to an end soon.