There was a lot of love for theme parks this year from thrill-seeking fans of these massive outdoor havens of escapism. Wall Street hasn't been as kind. Walt Disney (DIS -0.04%) -- operator of the world's most popular gated attractions -- has seen its shares lose to the market with a meager 6% advance in 2023.
SeaWorld Entertainment (SEAS -0.67%) has fared even worse. The largest publicly traded pure play in the theme parks space has tumbled 5% this year through Thursday's close. Universal Studios parent Comcast (CMCSA 1.85%) is the lone market beater with its 30% year-to-date gain, but that is largely the result of record profitability for its larger bread-and-butter broadband connectivity business. Theme parks accounts for less than 10% of Comcast's revenue. In a year that was generally kind to travel and tourism stocks, 2023 was not a good one for theme park investors.
The ride isn't over for Disney, SeaWorld, or Comcast. All three of the leading theme park operators aren't shying away from stepping up their efforts to grow their empires despite the industry's mostly uninspiring 2023 performance. Let's take a look at what went wrong in 2023 and what could go right in 2024 and beyond.
Floundering in Florida
Disney, SeaWorld, and Comcast may have carved different stock charts in 2023, but they all experienced disappointment in their largest theme park market: Florida. The Sunshine State is home to Disney World, Universal Orlando, and five of SeaWorld's attractions. Florida played a starring role when theme parks opened through June and July of 2020, nearly a year before its California sister parks were allowed to open following the pandemic.
Guests didn't flinch at the higher post-pandemic admission prices, and theme park operators thrived through 2021, 2022, and early 2023. Revenue was able to return to record levels despite turnstile clicks still well below the pre-pandemic peak. By 2022 Disney was saying that average revenue per guest was up 40% from where it was in 2019. Operating profits also hit fresh high-water marks.
Central Florida experienced a slowdown in the springtime of this year. The guest fatigue was unique, as all three operators held up better in California and overseas. The conclusion of Disney's 18-month celebration of the resort turning 50 at the end of March cooled tourist activity in the area. Disney, SeaWorld, and Comcast would go on to open two new roller-coasters and a moving walkway next-gen shooting gallery attraction in the springtime but they failed to draw summertime crowds. The climate is starting to pick up again now, and it's not the only reason the stocks could bounce back in 2024.
Image source: Shanghai Disney Resort.
Buckling up for the ride
A lot has happened in the closing months of 2023. Earlier this week we saw Comcast confirm the purchase of a large tract of land in the U.K. as it explores opening its first park in Europe. SeaWorld recently filed plans to build a 504-room hotel at SeaWorld Orlando, finally turning its most visited attraction into a resort destination. Disney announced in late September that it was nearly doubling the capital expenditures at its theme parks to $60 billion over the next 10 years.
These aren't moves by companies concerned about their stock price movements in 2023. Comcast has momentum, and now it has a new potential project to work on after introducing the Epic Universe attraction in Orlando come 2025. Disney is in the process of paring back expenses across its content and networks divisions, but it's not going to relinquish its lead in the theme park market. SeaWorld is finally living up to its promise of thinking more like its larger rivals by offering on-site lodging.
These are investments that won't bear immediate fruit in 2024. However, as long as the global economy doesn't tank in the coming year -- and signs are starting to suggest that things may work out just fine on that front -- investors and theme park enthusiasts alike may flock back into theme parks in the coming year.
