January 30, 2019

Universal Theme Park Growth Is Still in High Gear

UniversalÕs parent company is looking to some dependable cash cows Ñ dinosaurs and the boy wizard Ñ for a theme park bump in 2019.

Jurassic World, an update of the old Jurassic Park ride at Universal Studios Hollywood, opens this year, as does a new Harry Potter roller coaster at Islands of Adventure in Orlando. That ride replaces an older coaster that was torn down.

ÒWe remain bullish on the outlook for our parks over the next several years as weÕre investing in a robust pipeline,Ó Comcast Chief Financial Officer Michael Cavanagh said during an earnings call Wednesday.

In addition to the new rides in Florida and California, Universal Parks & Resorts is opening a new hotel in Orlando this summer. The theme park in Japan is adding a Nintendo-themed area next year, and an entirely new park is coming to Beijing. In 2018, ComcastÕs NBCUniversal segment increased its capital spending more than 15 percent year-over-year to $1.7 billion, Òprimarily reflecting investment at theme parks,Ó the company said in a statement.

ÒWeÕre confident in the long-term growth potential at our parks with an exciting road map as our partnership with Nintendo debuts at Universal Studios Japan in 2020 and we bring a brand-new, large park to Beijing the next year,Ó Comcast CEO Brian Roberts said Wednesday.

Executives did not reveal anything about a long-anticipated new park in Orlando, though they have said in past calls that they are Òlooking atÓ adding another park to the resort complex there.

ÒWe love the theme park business, itÕs one of our best, most consistent businesses,Ó NBCUniversal CEO Stephen Burke said in July. ÒAnd we think we have a lot of very long runway and that another gate in Florida would have the advantage of turning Florida from a two-to-three-day destination to potentially a weeklong destination.Ó

Already, Universal has been adding to its on-site hotels to get visitors to stay longer without decamping to competitors. Roberts said that occupancy has topped 90 percent even as rooms have more than doubled over the last five years. The first phase of a budget-friendly 2,800-room hotel, Endless Summer Resort, opens this year.

For the fourth quarter of 2018, UniversalÕs theme park revenue increased 3.5 percent to $1.5 billion, with adjusted earnings before interest, taxes, depreciation, and amortization up less than a percent to $666 million.

Cavanagh said domestic parks saw record results from their annual Halloween Horror Nights events, which require special tickets. But Universal Studios Japan proved a drag on results as it continued to recover from natural disasters that struck in the third quarter.

For the full year, theme park revenue jumped 4.4 percent to $5.7 billion year-over-year as visitors spent more per day. Adjusted earnings were up 3 percent to $2.5 billion.

Copyright 2019 Skift. All rights reserved. From https://skift.com. By Hannah Sampson, Skift.

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