Comcast’s Universal Studios Florida faces both falling attendance and not enough capacity at Epic Universe, its newest park.
That could be very good for vacationers looking for a deal as the company has promised new promotions to offset soft demand.
Co-CEO Mike Cavanagh spoke about the demand issue during his company’s third-quarter earnings call.
“While we continue to see near-term demand pressure across portions of the Parks business, including in Orlando and certain international markets, we view these trends as temporary rather than structural due to the confluence of a few factors,” he said.
And, while he did cite the economy as contributing to dropping attendance, he also shouldered some blame.
“In addition to the macroeconomic and geopolitical headwinds we have referenced in the past, we believe two other factors have contributed to this recent softness. First, we believe competitors were quicker to anticipate and recognize softness in demand and adapt their marketing strategies,” he added.
Cavanagh also noted that the one area where demand is high, Epic Universe, can’t meet it.
“Second, we continue to work through capacity challenges and ride throughput at Epic Universe, given the complexities of opening the most technologically advanced theme park ever built,” he said.
Comcast’s theme park revenue is down
Comcast does not break out revenue for its theme parks by location. Overall, however, the business saw revenue drop by 4.4% while costs climbed by 2.3%, according to its Q3 earnings release.
Adjusted EBITDA dropped by 17.1% which the company blamed on lower revenue and higher operating expenses.
“The increase in operating expenses was primarily due to operating costs associated with our domestic parks, partially offset by a decrease in operating costs at our international parks,” it shared.
Cavanagh shared the steps the company is taking to fix the problem.
“We have got a new head of marketing, so we are going to bring some promotional and product packages into the market, three-park passes and the like, really focus on media investment, on high return opportunities to get people into our collection of parks in Orlando,” he said.
Fixing some of the problems at Epic Universe is also part of the solution.
“Operationally, we are doing a lot of work. The team is doing well to make progress on Epic capacity, which is another item I talked about earlier to get reliability of attractions and availability throughput load times. That is a combination of just getting the tech settled down, getting the staff trained to load and unload at the right speed and the like,” he added.
Universal Studios has a Disney World problem
TravelHost Senior Writer Alisha dos Santos, who also runs the Adventure Seeking Mom blog sees Universal’s problems as being more than just about operations and a weakened economy.
“There’s so much competition in Orlando, both from other theme parks and from cruise lines sailing from nearby Port Canaveral that offer theme park-like experiences at sea. Universal has appealing experiences like the Harry Potter lands, but the value that travelers perceive from a Universal vacation may not be as high as that of a Disney vacation or a cruise,” she told TheStreet.
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As a longtime Disney World and Universal Studios passholder, who enjoys both parks, I’m inclined to agree. Disney World still has a superior product and vastly superior service.
That’s an opinion, but having been to both Universal Studios and Disney World dozens of times, if I had to pick one, it would be the Disney parks. The rides simply have more repeatability, and while the Wizarding World of Harry Potter lands are a huge winner at Universal, Disney World has comparable areas at all its parks.
Disney’s Florida theme parks had stronger results
Disney does not break out results by theme park, and its “Experiences” division includes cruise.
“Global guests across the Experiences segment grew 4% and attendance at our domestic parks grew 3% versus the prior-year quarter,” CEO Josh D’Amaro shared in his third-quarter earnings letter to shareholders.
The company’s Florida theme parks, however, were especially strong.
“Walt Disney World had a stand-out quarter, with healthy core attendance
increases from domestic tourists and annual passholders, and effective summer promotions and new experiences that further supplemented growth,” he wrote.
D’Amaro also noted spending at domestic parks, which also includes California’s Disneyland.
“We were pleased with 4% per capita spending growth at our domestic parks, reflecting the value our fans see in the parks experience and our decades of investment,” he added.
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