Comcast CEO "Universal will Compete with Disney"

[bobwadd]

I though I saw this on the forum but I can't find it now. So . . .


From the Orlando Sentinel

Comcast CEO: Universal will compete aggressively with Disney

The top executive at Comcast Corp. signaled Tuesday that the company expects to win theme-park market share away from industry leader Walt Disney Co. and other rival park owners.

"We're doubling down on theme parks," Comcast Chairman and Chief Executive Officer Brian Roberts told analysts during a conference in Las Vegas that was broadcast online. "We think that there is a lot of 'there' there in the theme-park business for many years to come and that we have a low market share — and only one way to go."

Comcast's Universal Parks & Resorts operates the third-busiest collection of theme parks in the world, with combined attendance of more than 36 million a year, according to estimates compiled by the Themed Entertainment Association and consulting company AECOM. But it remains far behind the global leader, Walt Disney Parks & Resorts, which draws more than 126 million theme-park visits per year.

(United Kingdom-based Merlin Entertainments Group, whose attractions include Legoland parks and Madame Tussauds wax museums, is No. 2, with about 54 million visitors.)

NBCUniversal's U.S. theme parks — Universal Studios Florida and Universal's Islands of Adventure, both at Universal Orlando, and Universal Studios Hollywood in Southern California — rank behind only parks at Walt Disney World and Disneyland in attendance.

One reason Comcast is bullish: the impending launch of the Wizarding World of Harry Potter — Diagon Alley, a new land expected to open by summer in Universal Studios Florida. It is a follow-up to the original Wizarding World of Harry Potter, which has delivered record attendance and profit growth since opening in mid-2010.

Comcast also will open its fourth and largest on-site hotel at Universal Orlando, the 1,800-room Cabana Bay Beach Resort, within weeks. Roberts called the hotel, a joint venture with Loews Hotels, the largest hotel under construction in North America, and noted that "we're so underinvested in hotels right now."

With Cabana Bay, Universal Orlando will have about 4,200 on-site hotel rooms, compared with about 26,000 rooms and time-share suites at Disney World. Comcast has said it could have 10,000 to 15,000 rooms in Orlando.

Disney would not comment on Roberts' remarks.

Industry watchers once expected that Comcast would try to shed the theme parks after it acquired a majority stake in NBCUniversal from General Electric Co. in 2009. But the Philadelphia-based cable giant — which bought out the rest of GE's stake last year — has since come to view the business as an untapped growth engine, thanks primarily to the financial success of the Wizarding World of Harry Potter.

Comcast has since begun construction on a Wizarding World clone at Universal Studios Hollywood.

"The big surprise has been the theme-park business," Roberts said.

 

[AK-Jake]

I love it! Thanks for sharing.

 

[UNIrd]

They've made similar comments before but I love to hear it every time.

 

[P@n!K_Sw1tC#]

It is going to take major infrastructure changes to come anywhere near the volume of tourists that Disney currently operates with. Those are very bold words to make publicly all things considering.

 

[Teebin]

Hmmm... I can see them crossing Kirkman to the east, but I cannot see them crossing I-4. Drastically splitting the property to distant locations would seem hopeless to me unless it had a kickass IP, and even then I am not convinced it would succeed.

 

[TylerDurden]

It is going to take major infrastructure changes to come anywhere near the volume of tourists that Disney currently operates with. Those are very bold words to make publicly all things considering.

This. Even if Universal became successful enough to build a brand with greater recognition and prestige than Disney, they simply can't handle the type of success Disney has. The resort is too small to host the additional 10 million people per year it would need to match Disney's success. Universal could even build two more parks and that still would do nothing to alleviate the small size of the infrastructure already there. And that's all assuming that Universal could ever compete against a world-class company that has been in the business for almost 60 years.

 

[UniversalCityFL]

The goal here is not to meet or beat Disney. He's simply saying that they have had great success recently biting into Disney's market share and there is more opportunity there. UO Hotels are maxed out and the demand is there, so it's time to build out the remaining corners of the resort to meet the demand and continue to invest in attractions.

 

[Brian G.]

The goal here is not to meet or beat Disney. He's simply saying that they have had great success recently biting into Disney's market share and there is more opportunity there. UO Hotels are maxed out and the demand is there, so it's time to build out the remaining corners of the resort to meet the demand and continue to invest in attractions.

Agreed.

I've always said that Universal would consider it a win if they exceed Disney's bottom 2 parks (AK and DHS)

 

[P@n!K_Sw1tC#]

Hmmm... I can see them crossing Kirkman to the east, but I cannot see them crossing I-4. Drastically splitting the property to distant locations would seem hopeless to me unless it had a kickass IP, and even then I am not convinced it would succeed.

Based on this project, it looks like the city is planning on building road extensions around the old Mystery Funhouse/ Westgate Resorts warehouse and bridging over to the Prime Outlets. I don't think this land is meant for Universal development, unless they do standalone hotels akin to the Downtown Disney hotel district. From current plans, Universal has no chance of continuing their property line unless they did the "land bridge" option over I-4 and bought out the southwest parcel of I-drive/Uni Blvd. But even looking at that from an aerial perspective, it doesn't even give them a plot comparable to Cabana Bay.

It'll be interesting to see how creative they get. Disney works so well because it's designed to keep guests on property. If Universal were to expand, it doesn't have that same strategic opportunity.

 

[UniversalCityFL]

Agreed.

I've always said that Universal would consider it a win if they exceed Disney's bottom 2 parks (AK and DHS)

Right.

And although it sucks that Uni doesn't have more land, it's actually an operating advantage from a finance perspective since resources can be easily shared resort-wide. For example, there is only one centralized Wardrobe facility -- not seven or more like at Disney. Hard Rock Hotel short on a housekeeper? Send one from across the street at Portofino. Managers are shared across both parks. All of this saves overhead and reduces operating costs which increases yearly revenue.

Having a fully-realized, centralized resort with minimal operating costs (well, minimal relative to Disney) that churns out $1B in revenue each year is a no-brainer for Comcast.

 

[MrRoamer]

If they expanded the current parking garages and potentially shared them with resorts or 3rd park on the side of Kirkman wouldn't that give them enough room to build something out on that side? It almost looks like they would have the same amount of space as IOA has. I forget who but someone came up with a great thought that perhaps the hotels aren't really meant for handling all the guests as much as cannibalizing the other off site hotels to the point where it is no longer profitable for them to continue and freeing up the expansion plots.

 

[P@n!K_Sw1tC#]

Although the cannibalization plan sounds juicy and like total cut throat capitalism, I do know that a lot of those hotels have very little overhead, and that aside from doing a timeshare presentation, they're about the only $50.00 or less options in that area. I doubt universal would try to price match them for their cheapo guests, and I garuntee you that cabana bay isn't enough of a value to justify paying double the rate when your 'one day one park" economy guest is just as geographically close to Citywalk as they would be at the new hotel.

 

[MrRoamer]

Although the cannibalization plan sounds juicy and like total cut throat capitalism, I do know that a lot of those hotels have very little overhead, and that aside from doing a timeshare presentation, they're about the only $50.00 or less options in that area. I doubt universal would try to price match them for their cheapo guests, and I garuntee you that cabana bay isn't enough of a value to justify paying double the rate when your 'one day one park" economy guest is just as geographically close to Citywalk as they would be at the new hotel.

Yeah but most of those hotels you either have to deal with either walking or the less than great taxi experience. Double Tree was pretty good, nice rooms and just $5 for a ride, the Hilton Garden Inn on the other hand wasn't so great for location and rooms add on to that we got shiestered on the rate there ($15 there and $5 back). Originally they told us to just walk up that I-4 ramp and there wasn't any chance of that happening on an HHN night.

 

[Disneyhead]

So Universal can't compete with Disney because they don't have enough land. I was unaware that Universal was forbidden from buying more land.

You guys do realize that Comcast is a $128 Billion corporation, right?

Just think what $4 Billion over 10 years can do.

 

[TylerDurden]

So Universal can't compete with Disney because they don't have enough land. I was unaware that Universal was forbidden from buying more land.

You guys do realize that Comcast is a $128 Billion corporation, right?

Just think what $4 Billion over 10 years can do.

They're just run smaller in general. It's like what the above poster said about having only one centralized wardrobe location, one employee parking location, shared managers between parks, etc. The existing infrastructure is too small to handle Disney's attendance numbers as it is. More land isn't going to change what's already been built, which can handle about what it gets...still millions less than what Disney gets a year.

And it's not just about land, either. Universal could triple in size and still have a brand name that is, unfortunately, not quite attached to the large-scale reputation of Disney. Superbowl quarterbacks don't say they're going to Universal Studios. Of course, it's not out of the realm of possibility, but sixty years in the business puts Disney at a huge advantage when it comes to their brand name, image, and perception.

Now before anyone gets excited, this is not a knock on quality or anything like that. Universal's a great place. But like was said, the best they can do is cut into Disney's share and maximize their own profits. Them being successful has nothing to do with cannibalizing Disney, however. They can manage just fine by taking away some of their hotel guests and I think that's all they really need to do. This CEO's statement is more for PR purposes than actual fact, if I had to guess.

 

[Mad Dog]

Agreed.

I've always said that Universal would consider it a win if they exceed Disney's bottom 2 parks (AK and DHS)

Good point. Neither Universal park is large enough to handle Magic Kingdom type crowds. Total attendance is generally secondary to high profit ratios. And, as Tyler alludes to, Universal's central managing points are conducive to good profits. Universal is already winning the dollar per guest spending, and that's a prime aspect of the "war".

 

[Andy]

My comparison from a company viewpoint lol

Disney




Universal

 

[GAcoaster]

My comparison from a company viewpoint lol

Disney






Universal

Perfect analogy!

 

[jtsalien]

I wish Disney was run by Bill Gates. So at least my money went to helping people if I can't get any news rides.

 

[DufflesMcGee]

Yeah, The key here is that Uni shouldn't compete with disney directly. It was a blessing in disguise that they lost their land and were bought by Comcast. Now they are optimizing their current space and rides (Which is great for the whole park)before you see them expand into a new land. I can see them obtaining area around kirkman road. if they are able to do that they could even push the entrance to the resort forward (I believe). We will see with Cabana if they can bring in enough customers and drive away the competition around kirkman, if that happens that I would bet that land is theirs