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July 31, 2013
Theme World: Universal Doubles Park Spending
A big announcement from Universal's parent company, Comcast. In a conference call with Wall St. analysts, the company announced it has now doubled how much it planned to spend this year on its theme parks and hints that a lot more is to come. How much money? $1.1 billion this year alone. Why? To speed up construction of new attractions.
This news comes in a year when we have already seen Transformers: The Ride-3D, half of the Simpsons area (with the rest ready to open as soon as this week) plus the Cabana Bay resort under construction and the announcement of Harry Potter's Diagon Alley for Universal Studios Florida.
So why spend even more money on the parks here and in Hollywood?
Comcast Chief Financial Officer Mike Angelakis says, "The investments we've made in our theme parks over the last few years have reset the level of our parks' profitability... (and) we expect these investments to do the same"
Comcast Chairman and Chief Executive Officer Brian Roberts adds: "We're starting to get some real critical mass." That's business speak for "We are starting to really draw a lot more visitors and their money." In fact, Roberts expects the Universal parks will top $1 billion in spending this year for the first time.
This announcement came amid a ho-hum sounding report on spending for the last three months.
Universal Parks & Resorts generated $231 million in cashflow for April - June. That's down 1.6% from this time last year. Total revenue went up a tiny 1.1% to $546 million.
But, in context, revenue is up 5.9% for the first 6-months of 2012.
CEO Roberts says, basically, their investment in new attractions will lead directly to more and more profit. He seemed bullish on adding Harry Potter to Hollywood -- but especially about the appeal of Diagon Alley here -- and the "Hogwarts Express" ride that will allow the new land "to be connected to the first in a very innovative way" -- a way that should boost the sales of park-hopping tickets starting when the land opens, by next Summer.
Sources I trust say Universal is very serious about expanding its appeal beyond its old image as thrill ride central. That was evident in the marketing campaign I talked about early this year.
And I hear plans are shaping up fast. Universal recently bought the land its Wet n' Wild water park sits on, and that land will play a role.
What else can we expect from Universal?? The resort isn't saying -- but I have heard they are at least looking at (and some say it is a done deal) a new ride in the Jurassic Park section of Islands of Adventure, and I wouldn't get too attached to the Barney & Woody Woodpecker Kidzone areas at the Studios. Not sure yet about ET. Longer-term, look for Terminator 2 and Twister to be replaced, but plans for those areas are still in the earlier stages, from what I have been told.
How will Disney respond?? We have to wait and see, but if you've been hearing rumors that innovative new attractions are finally on the way, the Force may be with you.
But I don't want to short-change the Mouse. I'll have more soon on what appears to really be in the works for its parks, and what rumors are really just internet fairy tales.
Keep your emails, questions, and comments coming! I always appreciate the feedback.
See you in the parks!