Is SeaWorld too Late Adding Hotels?

Dear Mr. Theme Park:

I recently read that SeaWorld is adding a hotel.  I know many theme parks do this, but do you think that SeaWorld is too late getting into the hotel business?

 Allan

Dear Allan,

It is never too late to “cash in” on a growing trend.  Thinking back to the early 1970s – it is interesting to note that when SeaWorld Orlando opened in 1973, it had a hotel.  It was a Hyatt or Hilton as I recall, and was located basically at the edge of its property.  At that point in time, with Disney World only two years old, there were not a lot of hotels in the area; however, there was one very close to SeaWorld.  It stuck out like a very odd place for a hotel.  Well, that was forty years ago.

Had SeaWorld incorporated more hotels into its planning back then, one has to imagine how important that incorporation could have impacted their long-term bottom line.  I for one believe that more hotels in and on the surrounding adjacent property could have helped feed the SeaWorld turnstiles from the beginning.  We all know very well the enormous growth that occurred in the Orlando hotel market.  Since 1970, with less than three thousand rooms in the area at that time, Disney and other major hotel operators all stepped up their hotel construction realizing the need to feed the Disney World properties.  Yes, like any specific market, the hotel industry in Orlando saw a downturn in hotel stays when the Arab boycott protesting the USA’s support of Israel caused gas prices to double.  And, overnight, this placed the country in a recession that would last for years.  This definitely hurt the hotel market.

Allan, oh how times have changed.  Today, for Disney as well as Universal, hotels are the life’s blood of the Orlando market – constantly feeding the parks’ new and repeat visitors.  I do believe that had SeaWorld worked with a partner early on that they could have built an important network feed of travelers to their park.  Typically, when one hotel builds, it is followed by others searching for market share.

Lowes Portofino Bay Hotel

If you look at Universal, you can see what an important part hotels on property have and will play in revenue generation, as well as keeping guests on premises.  Disney has been the master at understanding that on-site hotels create more on-site spending during a guest’s visit.

Today, even the regional park operators such as Cedar Fair and Six Flags are researching and implementing ways to improve existing hotel programs like the Hotel Breakers at Cedar Point, where they just spent $50 million on refurbishments.  This significantly enhanced ancillary guest spend.

I am sure we will see Universal Studios Orlando plan new mega hotel facilities on their just-acquired 475-acre property.  The longer they can keep people on their property, the more likely the odds for shorter stays at Disney. 

Hotels are seeing a major resurgence at parks, and operators are understanding their importance.  Having more rooms on property can have a significant impact on the bottom line.  If I were running SeaWorld, hotel development with partners would be high on my agenda, even while working out the other major issues that SeaWorld is reacting to at this point in time.

Hope this helps answer your question and thanks for asking!