Universal Orlando Resort Expansion (Part 1)

[Parkscope Joe]

The Orlando market has to hit saturation at some point.

We're going to have to see some theme park closures or else there will simply be too many theme parks in Orlando. There won't be enough people to work at the parks and there won't be enough visitors to keep all of the parks open.

If SeaWorld goes out of business and closes its doors, I could see Universal taking over their market share and opening a fourth park. But, Universal + Disney are going to start seeing smaller returns on their investments because there just aren't enough people taking major vacations to go around.

There's probably a few market studies and documents floating around Universal Parks and Resorts about acquiring SeaWorld in various forms.

 

[zg44]

What's weird about the Orlando theme park market is that capacity has barely changed over the past 20 years even though overall tourism and visitation has more than doubled.

Disney's attendance is around 50-60% higher than it was back then, while Universal's is at least doubled, but no new major parks have been added since 1999.

That's the one reason why I think Universal is planning a full 2nd resort.

If they have the right IPs, I think it will all work out.

As far as SeaWorld goes, I really don't think it enters any consideration. SeaWorld serves 5 million mostly regional customers a year. Universal's second resort will likely be planned to serve 20-25 million a year when fully built out...

Universal plans to grow the market, not take from SeaWorld or Disney.


The reality is that Orlando's theme park market can be compared to a similar vacation market like the Caribbean cruise market out of Miami.

Think about how many dozens of major class vessels have been added to the sea fleets over the past 2 decades in an unending wave of capacity expansion.

At some point, yes, there will be a maximum capacity in Orlando, but I think Universal will be able to grow the market.

Think about how many people were coming regularly to Orlando before Harry Potter started the modern arms race between Disney and Universal, and also think about the attractions that will come online over the next 5-10 years.

I'm firmly in the camp that the market can support 8 major theme parks operating at 10-20 million capacity in Orlando as long as there's around 8-10 years between the next 2 Universal parks.

 

[Arno]

I would have loved to be a little "mouse" during the court hearing

 

[IAmFloridaBorn]

What's weird about the Orlando theme park market is that capacity has barely changed over the past 20 years even though overall tourism and visitation has more than doubled.

Disney's attendance is around 50-60% higher than it was back then, while Universal's is at least doubled, but no new major parks have been added since 1999.

That's the one reason why I think Universal is planning a full 2nd resort.

If they have the right IPs, I think it will all work out.

As far as SeaWorld goes, I really don't think it enters any consideration. SeaWorld serves 5 million mostly regional customers a year. Universal's second resort will likely be planned to serve 20-25 million a year when fully built out...

Universal plans to grow the market, not take from SeaWorld or Disney.


The reality is that Orlando's theme park market can be compared to a similar vacation market like the Caribbean cruise market out of Miami.

Think about how many dozens of major class vessels have been added to the sea fleets over the past 2 decades in an unending wave of capacity expansion.

At some point, yes, there will be a maximum capacity in Orlando, but I think Universal will be able to grow the market.

Think about how many people were coming regularly to Orlando before Harry Potter started the modern arms race between Disney and Universal, and also think about the attractions that will come online over the next 5-10 years.

I'm firmly in the camp that the market can support 8 major theme parks operating at 10-20 million capacity in Orlando as long as there's around 8-10 years between the next 2 Universal parks.

Especially with Orlando growing at the rate i is, for Orange County, these next 20 years are about to be FUN!

 

[Frank Drackman]

The way I see it (3rd dry or also a 4th) is that Comcast likes what they have been seeing w/ UoR...heck, it has been a few years since the CEO mentioned how many rooms they planned to work on building (seems like it anyway)...now, I feel UoR w/ 2 parks plus VB is a pretty good mix for a resort stay. With the current parks, they've (hopefully) learned some of the 'if you could start over again, what would you do differently?' questions answered. This new land is by OCCC...a better City Walk as well as two diverse parks could certainly count on traffic from OCCC as well as what they draw by themselves...

So, I could see Comcast thinking that the hotel stays go up if there are 3 gates in the immediate area, I know the original parks are not that far away, but folks might still be turned off by being near one park but needing to travel to the other two....I think a lot of the 'Disney' Comparisons differ in that Disney runs their hotels...heck, just about everything...the roads...what their transport cost must be...so many factors. When you look at UNI, they get a part of the hotel revenue and I imagine empty rooms don't 'hurt' as much...really, they would be handling 4 dry parks in Orlando, both of them (I Imagine) within walking distance of each other...two bubbles with Comcast making $$ on tickets, food, portion of room nights, their take from the City Walks...if they get the right stuff in the parks, I do not think they run into the issues that Disney has had w/ running four parks...time will tell I imagine!

 

[JoeCamel]

What's weird about the Orlando theme park market is that capacity has barely changed over the past 20 years even though overall tourism and visitation has more than doubled.

Disney's attendance is around 50-60% higher than it was back then, while Universal's is at least doubled, but no new major parks have been added since 1999.

That's the one reason why I think Universal is planning a full 2nd resort.

If they have the right IPs, I think it will all work out.

As far as SeaWorld goes, I really don't think it enters any consideration. SeaWorld serves 5 million mostly regional customers a year. Universal's second resort will likely be planned to serve 20-25 million a year when fully built out...

Universal plans to grow the market, not take from SeaWorld or Disney.


The reality is that Orlando's theme park market can be compared to a similar vacation market like the Caribbean cruise market out of Miami.

Think about how many dozens of major class vessels have been added to the sea fleets over the past 2 decades in an unending wave of capacity expansion.

At some point, yes, there will be a maximum capacity in Orlando, but I think Universal will be able to grow the market.

Think about how many people were coming regularly to Orlando before Harry Potter started the modern arms race between Disney and Universal, and also think about the attractions that will come online over the next 5-10 years.

I'm firmly in the camp that the market can support 8 major theme parks operating at 10-20 million capacity in Orlando as long as there's around 8-10 years between the next 2 Universal parks.

I think everyone likes that new park smell. Even just that new ride smell. I am really regretting not taking better care of myself in my younger years, I doubt I will be around to see all they build but it is sure to be exciting. Expand MCO and bus them to the bubble (UNI bubble that is) and they will do some serious rewriting of the Orlando equation.

Comcast is smart enough to see they can't ride the cable wave for many more years so they are investing in their company future by moving in this direction (and others). With a quality product they can mint money here for years to come

 

[Happytycho]

On this map:

The only red property universal purchased is the one on the right. Stan is keeping all the other red parcels.
Stan is also keeping the green parcel to the left of the convention center and the green parcel which would contain the Kirkman extension south of universal boulevard. Universal bought the rest!

 

[JoeCamel]

On this map:

The only red property universal purchased is the one on the right. Stan is keeping all the other red parcels.
Stan is also keeping the green parcel to the left of the convention center and the green parcel which would contain the Kirkman extension south of universal boulevard. Universal bought the rest!

I hope the ones north of Uni drive get sold to Uni too, seems they now have leverage so it may happen but at a price. Maybe Stan is a better poker player than I gave him credit for.

 

[JungleSkip]

I hope the ones north of Uni drive get sold to Uni too, seems they now have leverage so it may happen but at a price. Maybe Stan is a better poker player than I gave him credit for.

Did I read that wrong? I thought they did have that parcel

 

[Teebin]

So are we to assume that universal bailed Thomas out of foreclosure on the other red properties?

 

[zg44]

On this map:

The only red property universal purchased is the one on the right. Stan is keeping all the other red parcels.
Stan is also keeping the green parcel to the left of the convention center and the green parcel which would contain the Kirkman extension south of universal boulevard. Universal bought the rest!

Just wanted to confirm that Universal did get these 3 circled properties south of Universal Blvd. in orange, right?

So are we to assume that universal bailed Thomas out of foreclosure on the other red properties?

(A quick primer: when parcels of a property are sold, the specific debt against which the parcels are guaranteed has to be cleared before the land can be transferred)

It's not clear right what the situation with the red parcels is. A partial satisfaction was filed which may mean that either just the single parcel that Universal bought had its debt cleared or more of the debt was cleared against those red parcels in foreclosure.

Given Stan Thomas' debt situations, I don't know that he'd necessarily prioritize clearing the debt off these red properties. He was forced to pay off the debts against UCPM III/FQP because nearly all of those parcels were sold, so the debts had to be cleared.

Stan Thomas has foreclosures in other states where he might prioritize the proceeds from this sale, so we just have to wait and see.

I wouldn't say Universal will never get those 2 red properties north of Universal Blvd., but they're not going to have those in their plans for now. It's not that big a deal because those are just hotel acreage. All the acreage around the main resort proper is secured, that's what's important for now.

 

[GoUCFKnights]

So are we to assume that universal bailed Thomas out of foreclosure on the other red properties?

If Universal acquired any of the red properties, the foreclosure likely would have needed to be settled. I'm actually really surprised Universal would not insist on the 2 parcels touching Universal Blvd.

 

[zg44]

If Universal acquired any of the red properties, the foreclosure likely would have needed to be settled. I'm actually really surprised Universal would not insist on the 2 parcels touching Universal Blvd.

The creditor was definitely a part of this, but it's not necessary that they would have agreed on satisfaction of all of the debt or an end to the foreclosure case.

Each parcel was secured by its own set of the debt, so for example out of the $35 million, if that one parcel that Universal bought had $8 million in debt secured against it; they could have just come to an agreement on that $8 million of the debt being satisfied, so Universal could take that one red parcel.

We just have to wait and see what gets filed next in that foreclosure suit. Stan Thomas has a lot of other foreclosures to deal with and might want to push the remaining cash from the sale towards those foreclosures.

 

[bob albert]

I could see a scenario where universal actually takes the market share at least on profit over Disney due to the resorts being compact and requiring less transport/infrastructure. I do think that Disney has been pushing guests to DVC knowing this will pad their losses and lock people onto Disney vacations assuming Disney will stay the market leader.

 

[GoUCFKnights]

I could see a scenario where universal actually takes the market share at least on profit over Disney due to the resorts being compact and requiring less transport/infrastructure. I do think that Disney has been pushing guests to DVC knowing this will pad their losses and lock people onto Disney vacations assuming Disney will stay the market leader.

Exactly, Comcast's leadership of Universal has made it clear they want to be a full on, equal competitor to Disney, and that means they need an equal number of theme parks and water parks. Its not going to be quite as long as people think for Universal to be looking at dry park #4.

 

[bob albert]

Exactly, Comcast's leadership of Universal has made it clear they want to be a full on, equal competitor to Disney, and that means they need an equal number of theme parks and water parks. Its not going to be quite as long as people think for Universal to be looking at dry park #4.

I actually think universal is going to have a stronger offsite hotel argument given the proximity to the parks vs Disney offsite hotels as well. These hotels will have a tough competition with the new universal ones but they will be able to add shuttles accordingly between the resorts.

 

[Happytycho]

Just wanted to confirm that Universal did get these 3 circled properties south of Universal Blvd. in orange, right?

Yes Universal did get those 3 properties.

The creditor was definitely a part of this, but it's not necessary that they would have agreed on satisfaction of all of the debt or an end to the foreclosure case.

Each parcel was secured by its own set of the debt, so for example out of the $35 million, if that one parcel that Universal bought had $8 million in debt secured against it; they could have just come to an agreement on that $8 million of the debt being satisfied, so Universal could take that one red parcel.

We just have to wait and see what gets filed next in that foreclosure suit. Stan Thomas has a lot of other foreclosures to deal with and might want to push the remaining cash from the sale towards those foreclosures.

The one document filed today related to that loan only released the parcel that Universal bought. I didn't see anything relating to the others, so I would assume that they remain under mortgage (and foreclosure?).

 

[Andy]

Just a shot in the dark here as to some of the things im thinking ends up happening with south property over the next 4-15 years.

2 Theme Parks
1 Water Park
8k-10k more hotel rooms
Multiple Garages
New Citywalk that has rides to compete with the Idrive Corridor and a bit more posh or upscale food offerings
Separate shoppng center
New transportation hub
Direct rail access to MCO
New World HQ for Universal
Moving Creative to new offices here as well
New facilities for Loews
Pedestrian bridges that connects Universal directly to Convention Center
Broadway Style Show facility

 

[fryoj]

Pedestrian bridges that connects Universal directly to Convention Center

For the most part I agree, but it'll be almost a mile walk for the convention center to the assumed Citiwalk location. I'd expect more of a constant running free shuttle with a dedicated pickup location at the OCCC.

 

[Mad Dog]

Just a shot in the dark here as to some of the things im thinking ends up happening with south property over the next 4-15 years.

2 Theme Parks
1 Water Park
8k-10k more hotel rooms
Multiple Garages
New Citywalk that has rides to compete with the Idrive Corridor and a bit more posh or upscale food offerings
Separate shoppng center
New transportation hub
Direct rail access to MCO
New World HQ for Universal
Moving Creative to new offices here as well
New facilities for Loews
Pedestrian bridges that connects Universal directly to Convention Center
Broadway Style Show facility

Come back more often....Many of us miss you. :thumbsup::rock: