Busch plans to rein in new spending at theme parks

By MARK ALBRIGHT

© St. Petersburg Times, published April 26, 2001

ORLANDO -- After a huge, five-year build-up in Central Florida, Anheuser-Busch Cos.' theme park unit plans to rein in spending on headline attractions and new park ventures for the next few years.

"We think our theme parks are now poised for solid growth," August Busch III, chairman and chief executive of the St. Louis beermaking giant, said at the company's annual meeting Wednesday at Sea World Adventure Parks.

About 500 shareholders made the trip to sip free beer samples, rub elbows with the A-B brass and get free admission to see Shamu. While the annual meeting stuck to the theme of Anheuser-Busch tightening its dominant grasp on 48.9 percent of the beer market, officials also showcased their Florida parks, where a lot of shareholder money was spent.

"Our strategy going forward is to moderate our capital investments while maintaining a quality product," said Vic Abbey, president and chief executive of Busch Entertainment Corp., which spent $388-million on new attractions at its nine theme parks over the past three years.

Busch still will add new rides and attractions to lure visitors back, but they will come less frequently and more likely will be shows and other less costly investments.

Busch joins the other big Florida theme park operators to officially holster their checkbooks after heaping a combined $4-billion-plus on new parks and attractions in Central Florida over the past five years.

Since opening Animal Kingdom in 1998 and adding costly headline rides at its other Orlando parks, Walt Disney Co. has been adding less expensive, customized amusement park rides and shows while cutting back payroll to deal with the current economic slowdown. Universal Orlando's new French owners have been silent about any big, new attractions since opening their Islands of Adventure park and Men in Black ride last year at Universal Studios Florida.

In recent years, Busch added the first two thrill rides at Sea World, installed a dual wooden racing roller coaster at Busch Gardens Tampa and overhauled that park's sprawling but dated Serengeti Plain and veldt. While the last part of the overhaul of the 65-acre Serengeti won't be finished until summer, the next phase of the upgrade opens in mid-May in the form of Rhino Rally, a safari ride.

Plans for a long-discussed, 800-room hotel on the edge of the veldt, however, have been shoved to a back burner.

Last year, Busch opened Discovery Cove in Orlando, a small park that offers about 1,000 guests a day a chance to swim with dolphins at an admission price approaching $200. Busch paid for the new park by selling one in February: Sea World Ohio near Cleveland for $110-million.

As a result, Discovery Cove was profitable from day one, Abbey said. He added that Discovery Cove, which recommends advance reservations, is close to being sold out through this summer.

Unlike Disney, which owns more than 20,000 hotel rooms, Busch is less reliant on out-of-state vacationers. So far, Busch theme parks have not felt the effects of a slowing economy at the gate.

Busch's entertainment unit is a tiny part of the beer company that is the world's largest brewer. The breweries provide 17 times the revenues and 10 times the annual profit of the theme parks. But Busch considers the parks an extension of the company's marketing and image-building effort as much as a profit center.

Busch Entertainment chalked up a "fine year" in 2000, Busch said. Attendance rose 11 percent to 21-million. Revenues increased 11 percent to $837.9-million. Net income increased 5 percent to $71-million, up from $69.4-million, but still below 1998 earnings of $72.3-million.

The parent company, which does not break out the quarterly performance of its theme parks, on Wednesday also reported its overall earnings for the first quarter. Net income rose 13 percent to $394.8-million, or 43 cents a share, up from $350.3-million, or 38 cents a share, in the year-ago quarter. Revenues increased 6 percent to $2.98-billion, up from $2.81-billion.

- Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

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