Universal Orlando Resort Expansion (Part 1)

[JungleSkip]

Also, a new gate does not get people to spend 3-4 more days at Universal. There’s going to be more than that. :freak:

I'm not singling you out, because I've seen this sentiment on twitter as well, but people are missing the "potentially" in the statement of week-long trips. That reads to me like "Eventually maybe we can get there". Don't expect them to be shooting for that from day 1 at site B

 

[Mad Dog]

Conversely theme park revenue in the second quarter was only up 3.6%, partially reflecting an early Easter which had boosted 1st quarter results. Year to date theme park revenue is 8.6 percent. This is probably the smallest Comcast/Universal theme park quarterly increase that I can recall from the past few years. This reflects the softness most people were indicating was occurring at the parks this past spring. I would expect similar flat results from Disney when their spring quarter report comes out.

 

[RichOBJ]

I'm not singling you out, because I've seen this sentiment on twitter as well, but people are missing the "potentially" in the statement of week-long trips. That reads to me like "Eventually maybe we can get there". Don't expect them to be shooting for that from day 1 at site B

I'll admit, I'm a dreamer. So the 7 day breakdown to me looks like: Day 1 arrive and look around. Day 2-5 parks, water parks. Day 6 hotel relaxation/shopping. Day 7 Check out.

NEVER forget that many tourists come to shop. It can sometimes be a whole day of activities for them. That would include CityWalk, but admittedly visits to outlets etc.

 

[shiekra38]

I'm not singling you out, because I've seen this sentiment on twitter as well, but people are missing the "potentially" in the statement of week-long trips. That reads to me like "Eventually maybe we can get there". Don't expect them to be shooting for that from day 1 at site B

Well, I'm assuming they aren't going to start out with a new water park immediately...And I'm only expecting like two resorts...So, at most, we're looking at an extra day or two

Assuming that people spend a day per park, and they like water that's

USF: 1day
IOA: 1 day
VB: 1 day
Fantastic Worlds: 1 day
Pool Day: 1 day

That's being generous with five

 

[Teebin]

USF: 1day
IOA: 1 day
VB: 1 day
Fantastic Worlds: 1 day
Pool Day: 1 day

So, I guess most tourists aren’t like me... where I booked a three day trip and spent all three days at IOA. I would think that even families might have a freeforall day of any park they want for rerides, shopping etc.

 

[Magic-Man]

They might be counting Fantastic Worlds as a two-day park. After all, it’s rumored to have Magic-Kingdom attraction numbers.

Then you have the potential water park. That’s a day, maybe a day and a half, depending on the amount of attractions there.

You also have CityWalk 2.0, which should take up a day. So that’s a week.

 

[shiekra38]

So, I guess most tourists aren’t like me... where I booked a three day trip and spent all three days at IOA. I would think that even families might have a freeforall day of any park they want for rerides, shopping etc.

Let's be honest...A week long stay at Universal is the best way to do it

 

[Mad Dog]

With HE (80% of all tickets sold are now Park Hoppers. per Universal), people basically park hop to both parks daily now. Also on site tourists often split their days, parks in the morning and late day. Pool time mid afternoon when the heat becomes uncomfortable. So, it's really not easy to figure how people will spend their time touring. Off site people, and locals probably tour differently than on site tourists. Of course, the prime demographic Universal is looking at is probably their on site visitors since that's the large revenue stream. I can see 6 or 7 days at Universal for a good percentage of on site guests once a new park opens.Probably 4 to 5 days for most others.............And then, there's the crazies like me that stay 8 to 14 nights. When I first was booking I was kind of a rarity. Now I run into quite a few guests doing the same with a long booking. Like me, a day trip or two up to Disney or other places using Universal as their base. There's never going to be a large percentage of these long stays on property, but there are probably more than most would think.

 

[tielo]

If Universal is smart (and they are) they make the look and feel of site B hugely different. CityWalk - Village Walk, Volcano Bay - Old swimming hole etc. They could promote it as 2 resorts, 5 parks, 1 destination: have double the vacation in 1 week.

 

[Magic-Man]

This announcement/acknowledgment makes me think that they already have submitted plans/permits. Doubt they’d say anything about it otherwise.

 

[AlexanderMBush]

This announcement/acknowledgment makes me think that they already have submitted plans/permits. Doubt they’d say anything about it otherwise.

I believe they have already been filing permits for a while, but that may mean more for the warehouses/office buildings being developed as opposed to the front side of things.

That said, I'd think that they are now locked of what the starting roster would be now at-least, for UOSouth.

 

[zg44]

And...a real good earnings report....Comcast reported stronger than expected second quarter profit. The company reported a 22 per cent jump in earnings to $3.22 Billion, or 69 cents a share. Comcast added 260,000 high speed internet customers during the quarter, while it lost 140,000 video cable customers.

Comcast has capably switched from focusing on video subscribers to broadband subscribers (which are higher margin due to the fact that it just requires more dense capacity versus paying cable channels ever escalating costs), but I do think that the company has been far too slow (like Disney) to move towards streaming as a replacement for those lost video subscribers, which merits some concern.

AT&T (by virtue of the fact that their broadband footprint is much smaller since their main video subscription service is DirecTV satellite) has been much quicker to transition towards streaming with DirecTV Now, and they'll be supplementing that with HBO Now as they ramp up to create a legitimate set of streaming services that can replace their satellite services and compete with Netflix.

The question is what Comcast is planning on doing to transition as AT&T has; I think this is why Comcast wants Sky so badly. Sky is basically the DirecTV of Europe (i.e. the largest satellite service, focused on Britain, Germany, and Italy), and Sky is focused 100% on transitioning towards streaming with the ability to stream towards other countries as well (like Spain where they have a streaming service but no satellite offering). If Comcast gets at least 51% of Sky (we'll find out soon if they do), then I think they'll use Sky's efforts as a way to get into streaming in the US as an alternative to cable video. It'd be pretty simple to just put NBCU's content on Sky Now and then bring it to the US.


As for the theme parks, earnings look fine (due to the way Spring Break works, it's always more valuable to compare first 2 quarters combined year-over-year as you note at 8.6% growth) though it was obviously a tough comparison given Volcano Bay opened in last year's 2nd quarter. Universal has the runway to build a full 2nd Orlando resort (and the tax cuts as a bonus incentive); it just comes down to execution.

 

[Mad Dog]

Comcast has capably switched from focusing on video subscribers to broadband subscribers (which are higher margin due to the fact that it just requires more dense capacity versus paying cable channels ever escalating costs), but I do think that the company has been far too slow (like Disney) to move towards streaming as a replacement for those lost video subscribers, which merits some concern.

AT&T (by virtue of the fact that their broadband footprint is much smaller since their main video subscription service is DirecTV satellite) has been much quicker to transition towards streaming with DirecTV Now, and they'll be supplementing that with HBO Now as they ramp up to create a legitimate set of streaming services that can replace their satellite services and compete with Netflix.

The question is what Comcast is planning on doing to transition as AT&T has; I think this is why Comcast wants Sky so badly. Sky is basically the DirecTV of Europe (i.e. the largest satellite service, focused on Britain, Germany, and Italy), and Sky is focused 100% on transitioning towards streaming with the ability to stream towards other countries as well (like Spain where they have a streaming service but no satellite offering). If Comcast gets at least 51% of Sky (we'll find out soon if they do), then I think they'll use Sky's efforts as a way to get into streaming in the US as an alternative to cable video. It'd be pretty simple to just put NBCU's content on Sky Now and then bring it to the US.


As for the theme parks, earnings look fine (due to the way Spring Break works, it's always more valuable to compare first 2 quarters combined year-over-year as you note at 8.6% growth) though it was obviously a tough comparison given Volcano Bay opened in last year's 2nd quarter. Universal has the runway to build a full 2nd Orlando resort (and the tax cuts as a bonus incentive); it just comes down to execution.

Yes....Plus, Comcast reiterated in it's earnings call, that the prime reason they went after Fox was to acquire the international assets. So if they end up with Sky, they'll be getting the main asset they wanted all along. Though the loss of the India acquisition will be the only thing really lacking, and that's really a secondary market, lots of potential, but not a lot of value at this point in time. That area has lots of serious issues, economically and socially...............Universal Orlando, at this point in time, seems to be pretty busy in July. Hopefully the spring softness was an aberration, largely based on the Easter date, and overly rainy weather. Seems like June was the really soft month though.

 

[Scott W.]

I like the name Site B but I also like Universal South.

Didn't Universal mention plans for building a new park during their court hearings to acquire the new land?

 

[JungleSkip]

I like the name Site B but I also like Universal South.

Didn't Universal mention plans for building a new park during their court hearings to acquire the new land?

The lawyer mentioned 2 possible parks, but it was in a much more theoretical sense than what was discussed today. And when Universal was outright asked about it after the case, they did the "We can neither confirm nor deny" any plans dance, unlike what they did today

 

[Scott W.]

The lawyer mentioned 2 possible parks, but it was in a much more theoretical sense than what was discussed today. And when Universal was outright asked about it after the case, they did the "We can neither confirm nor deny" any plans dance, unlike what they did today

Any news is good news I guess.

I get the impression that 4 parks and 2 water parks is the ultimate goal simply because that's what Disney has. Whether that's actually a great idea or not is up for debate.

 

[zg44]

Any news is good news I guess.

I get the impression that 4 parks and 2 water parks is the ultimate goal simply because that's what Disney has. Whether that's actually a great idea or not is up for debate.

Yeah, the difference is really that in a courtroom, you have to tell the judge the truth if they ask you what your eventual goals with a property are. Universal can foresee a future where there's 2 large dry parks on the property...

For investor consumption though, they have to be much more tentative. In the near-term, they're only really going to be focused on 1 dry park, CityWalk 2.0, transportation hub, a bunch of hotels, and possibly the 2nd water park.

Any "last/4th" dry park is a discussion for 2026 and beyond if everything else is running at 90+% capacity and the dry parks are all well over 10 million attendance.

 

[JungleSkip]

Yeah, the difference is really that in a courtroom, you have to tell the judge the truth if they ask you what your eventual goals with a property are. Universal can foresee a future where there's 2 large dry parks on the property...

For investor consumption though, they have to be much more tentative. In the near-term, they're only really going to be focused on 1 dry park, CityWalk 2.0, transportation hub, a bunch of hotels, and possibly the 2nd water park.

Any "last/4th" dry park is a discussion for 2026 and beyond if everything else is running at 90+% capacity and the dry parks are all well over 10 million attendance.

I think the big question for me in the nearer term is the second water park. VB's continued crowds shows that there's a demand for the product, but I'm not sure if they'll wait to see how Site B's hotels do before really starting in on another one.

 

[Teebin]

Has it been confirmed that there is to be a second water park or a citywalk 2.0? Isn’t that just conjecture and speculation at this point?

 

[JungleSkip]

Has it been confirmed that there is to be a second water park or a citywalk 2.0? Isn’t that just conjecture and speculation at this point?

Speculation, but I'd be really surprise if a City Walk-type area is not in the plans. I don't see them building multiple resorts and parks without a nighttime entertainment/dining area. Not to mention the fact that they'll be trying to compete for convention goer $$$ with the surrounding offerings.

I'd also say a Water Park is likely, but a bigger question mark. Volcano Bay flat out can't handle more guests, so you don't want guests staying at the South Property traveling up that way, and you also don't want them going off property to Aquatica.