Hurricane Matthew is no longer a threat to Florida, and Central Florida's theme parks reopened to guests yesterday. Walt Disney (NYSE:DIS), Universal Orlando parent Comcast (NASDAQ:CMCSA) and SeaWorld Entertainment (NYSE:SEAS) closed early on Thursday and all day on Friday ahead of the fierce windstorm. Disney and Universal Orlando also called off a couple of their big-ticket Halloween events on Thursday and Friday night. Everything is back to normal now, at least in terms of park operations.
Attendance has been a challenge for the state's market-leading theme parks this year, and the storm-related closings will only make things worse in the near term. Disney experienced a dip in Disney World attendance during the March quarter, only to go through a combined 4% decline at its domestic theme parks during the June quarter. SeaWorld's attendance outside Florida is on the rise this year, but things are going the wrong way at SeaWorld Orlando. Revenue growth at Comcast's stateside parks has decelerated to its slowest pace in years.
Hurricane Matthew blew away any immediate turnaround hopes. This isn't just a day and change of park hours that we're talking about here. Entire trips got derailed. There will be a lot of refunds to accommodate. Travel-hungry folks may decide to avoid a trip out to Florida until the hurricane season officially comes to a close at the end of November.
What appears to have been a slow summer at the parks by most accounts has now bled into a rough start to the fall season, culminating in what will probably be a rare dip in annual attendance for Central Florida's leading theme parks in 2016. Things look pretty bad right now, but it doesn't have to stay that way.
The sun will come out tomorrow
There are plenty of reasons to be upbeat about the prospects for Disney World and the rest of its peers as we head into the critical holiday season. The most important thing is that all of the parks emerged from Hurricane Matthew in relatively good shape. They were all far removed from the storm's vicious center. Some hearty outer bands hit the area, but nothing that the efficient landscaping crews can't clean up in short order.
We may never know if the move by Disney and Comcast to shift to tiered pricing on single-day tickets -- making one-day trips this summer as much as 18% more expensive than a year earlier -- was the primary factor in this past season's light crowds, but we're now in the slightly more affordable "regular" season of Disney World's three pricing tiers. Pricing will spike back into "peak" pricing over Thanksgiving and Christmas holidays, but most visits will check in during "regular" pricing this quarter. The next wave of "value" prices begins early next year.
If the big reason for Disney World's slow summer was a lack of new attractions -- something that wasn't the case at SeaWorld Orlando or Comcast's Universal Orlando, but a fair knock outside of updates at Epcot -- help is on the way. Pandora -- The World of Avatar is set to open at Disney's Animal Kingdom next year. It's the resort's first major addition since the Magic Kingdom's New Fantasyland began to roll out in late 2012.
Disney World's peers aren't relying on this summer's new attractions to woo travelers next year. Comcast has a Jimmy Fallon-themed attraction opening next year, and SeaWorld Orlando is giving its original Kraken coaster a virtual reality bent.
The parks will also naturally be at the mercy of the national and international economies. There will always be elements that are out of its control, like Hurricane Matthew, but it's comforting for investors to know that it does have some potential catalysts for a traffic turnaround in the works.