Shamu meets the Millennium Force… Bring a poncho. SeaWorld has made a splashy comeback since the pandemic forced it to shut down parks and furlough nearly all its employees in 2020. Last quarter, SeaWorld’s sales hit a record as thrill-seekers returned to its water parks for holiday-themed nights (see: Howl-O-Scream). Now SeaWorld wants to double down by buying fellow amusement-park operator Cedar Fair for $3.4B. What’s on the table:
- Cedar owns 11 US-based amusement and water parks, including California’s Great Americas. SeaWorld owns 12 US parks, so it could double its footprint with the acquisition.
- Deal déjà vu: Rival Six Flags offered to buy Cedar Fair for $4B back in 2019, but was rejected because the price was "too low." Not promising for SeaWorld’s $3.4B bid.
Beached… amusement parks were feeling the pain mid-pandemic. And despite the record revenue, SeaWorld’s attendance still isn’t back to pre-pandemic levels. Tighter international travel requirements have stalled the return of foreign tourists, which made up more than 10% of SeaWorld’s guests. But Americans are starting to fill the spending gap:
- NBCUniversal’s theme-park division just posted its most profitable quarter ever as domestic visitors splurged on souvenirs and pretzels. Cedar Fair also saw record revenue and in-park spending last quarter.
Spreading out can minimize risk… if one region gets hit hard. SeaWorld’s properties are primarily scattered across densely populated warm-weather states, like Florida and California. Meanwhile, Cedar Fair’s parks dominate the Midwest and rural areas. While Omicron continues to threaten recovery, diversifying location “portfolios” can help spread out risk. And could lead to billions in extra sales for SeaWorld.