Universal Bets, Disney Balks on Future of Theme Parks

    We don’t usually steer too far out of the Disney Parks lane that we’ve created here at BlogMickey.com, but something epic was announced recently. Comcast CEO Brian Roberts announced that Universal would be resuming construction on Universal Orlando’s third theme park, Epic Universe, “immediately”. Construction of Universal’s third theme park was paused back in July 2020, but 8 months later Universal has decided to restart the project.

    The restart of the construction of a new theme park is a significant announcement in an environment that is still suppressed by a combination of factors related to the ongoing COVID-19 global pandemic. While vaccine news seems to be trending in the right direction to the at-home observer, the announcement of a resumption of construction of a brand new theme park by a major international brand is a big bet on the future of theme parks.

    Meanwhile, Disney balked when it comes to their approach to their theme park business and future projects. Originally announced to open in Summer 2020, Remy’s Ratatouille Adventure will now sit empty until October 1, 2021 as Disney seemingly slow plays the opening of the cloned Disneyland Paris attraction.

    Other projects such as the Mary Poppins attraction have seemingly faded away into history, a much-needed refurbishment of Spaceship Earth has been postponed, Rivers of Light has been cancelled and put nights at Animal Kingdom in jeopardy, and other headline attractions like TRON Lightcycle Run and Guardians of the Galaxy: Cosmic Rewind will no longer headline the start of the Walt Disney World 50th Anniversary celebrations.

    Speaking just one day after the announcement that Remy’s Ratatouille Adventure would open on October 1st, Comcast CFO Mike Cavanagh characterized their park’s division as being on “offensive footing” thanks to continued construction through the pandemic on the Velocicoaster roller coaster, and the recent restart of Epic Universe construction.

    Tom Williams, the Universal Parks & Resorts chief, said that the announcement to restart construction shows that Universal is confident in the future of the industry:

    We are excited to begin work on Epic Universe again and for what this moment means for our industry, our community, our business and our team members. Our confidence in our collective future is as strong as ever.
    Tom Williams, CEO Universal Parks & Resorts

    The move comes at a time when Disney is showing a hand that is a little bearish when it comes to the future of their own theme parks. Disney CEO Bob Chapek guided the company through the COVID-19 pandemic by cutting 28,000 Cast Members from the Disney Parks workforce, drawing massive amounts of debt to allow the company to weather the pandemic, delaying or cancelling capital expenditure projects in the theme parks, and making Disney+ the future of the company. While there is no doubt that Disney+ has been a wild success, making it the focus of the future of the company at a time where Disney is cutting back on theme park projects is concerning for Disney Parks fans.

    In guidance issued to investors in a November 2020 earnings call, Disney said that there would be a reduction in theme park project spending – back to a 2014 spending level…or lower.

    Now, this isn’t to say that Disney doesn’t have their hands full with construction already. Let’s be clear – Disney announced a slew of new parks projects over the past five years in what was a bullish take on the future of all of their theme parks worldwide. A massive reimagining of EPCOT, a refreshed Tomorrowland in Magic Kingdom, a new transportation system, a longer day at Disney’s Animal Kingdom, and the completion of a multi-year overhaul of Disney’s Hollywood Studios is nothing to scoff at.

    That said, Disney is facing increasing competition with Universal Orlando for the tourist dollar. Universal Orlando opened their Volcano Bay water park with little more than a sideways glance from Disney, but the announcement of a third theme park coupled with the sustained success of the Harry Potter IP means that tourists would soon need to make a decision on how they would want to split their Orlando vacation – or if they’d even be able to split it at all.

    In the same environment that Universal Orlando announced the resumption of construction on Epic Universe, Disney is cutting back on amenities that are meant to keep a tourist within the Disney bubble – most notably Magical Express, which is slated to be discontinued in 2022. While the idea of Magical Express was wrapped in a pixie-dusted promise of convenience, taking away the need for a rental car has kept countless guests within the Disney bubble over the decades.

    Now, as noise starts to get louder from the construction site 10 minutes down Interstate 4, it will be interesting to see if Disney’s balk on the future of their theme parks business will put them behind the 8-ball for the tourist dollar in 2024 and beyond, or if they’ll realize that pent up demand also demands a reason to visit beyond projections on Cinderella Castle.

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    1. The Disney Brand is in jeopardy of becoming a shell of its former self under Mr. Chapek. Mr. Iger undoubtedly made some questionable moves over the years (particularly in regards to cozying up to China a little too much), but he also acquired the right IPs to transform the parks. Now, with cost cutting in effect within the Parks as more money is redirected towards Disney+, it looks all but certain that Disney’s good will in Orlando is going to suffer.

      However, all is not lost, as competition from Universal will eventually drive Disney to focus again on its Parks. Yet, that won’t happen until a sustained loss in dollars hits Disney’s line while it’s being reallocated to Universal. Yes, the pandemic has hit the Orlando tourist industry hard, but I personally feel Disney has used Covid as a convenient excuse to scale back spending to please their shareholders, especially since Universal wasn’t doing anything either in their parks for the last year. Now, with Epic back on the table with a late 2024, early 2025 opening, this is the best news possible for all consumers visiting the Orlando area, as this new park should eventually make Disney realize their bread and butter has always been their theme parks.

      In the short term there will be pains at Disney, especially under the leadership of Mr. Chapek as his cost cutting when he was Parks lead will hit the whole company and erode consumer good will over time. However, long-term I’d argue the Orlando tourist industry is in a great spot because of Epic. This will force all tourist attractions in the area to up their game, while further leading to changes within Disney to spend again and to prioritize their Parks.

      Epic not only has the potential to show off the future of theme parks, but may further force Disney World into building that 5th Gate fans have been clamouring about for years. A 5th Gate was a rarity before the pandemic, but with Universal increasing competition and Epic being the new Ace in the Hole, I can see Disney World adding a new park and/or expanding vastly on their existing Parks by 2030.

    2. @Graham well said but in summary if I may you’re saying Chapek is a cancer and I completely agree!!

    3. Well said @Graham, It’s disappointing that they Disney so short sighted and will play catch up for years since they are going for Disney+ in a way that degrades the park’s drastically. And @Docmarmo, Chapek is a cancer and he will be the catalyst to the brand losing luster.

    4. while all of this is accurate, you should add into the stability of the remainder of the companies. Comcast and WDC are very different companies. Comcast has the benefit of a solid income coming from the other parts of the business that can’t be said of WDC. WDC is under pressure at ESPN, Movies, etc. They do not have the landline cable business that is providing loads of cash and more importantly stability in these times. Name one business that WDC has that is as stable as the landline business as Comcast? There is not one, that allows Comcast to take more risk than WDC. That is a huge opportunity that Comcast should take advantage of.

    5. After what was it, 10 or 15 years of not building any rides at all Disney World finally got the message after the huge success of the Wizarding World of Harry Potter and the yearly opening of new attractions, rides and lands that followed.
      So Disney announced (much to premature as always) a slew of rides and attractions that would see the light of day. Over-promising, under-delivering and eventually canceling many of the much, much needed updates and changes. Firing all but 50 actors during the pandemic (Universal Orlando kept them almost all) and as much union workers as they could to get rid of those protected workers that can’t be abused as much.
      And as a special thank you (not) for their guests delaying a ton of work resulting in a ton of bad show that wasn’t necessary. Work that did continue where time share and hotel buildings but those people need to have rides and attractions to enjoy themselves, something Disney fails to understand. As Pete from the Dis mentioned a few weeks ago, there is a huge shift in guests booking vacations for Universal Studios instead of a Disney vacation, and I for sure am one of them.

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