Theme park operators live for the summer. Global leader Walt Disney (DIS +7.60%) and its peers relish the opportunity to cash in on the longest of the school breaks, which features a surge in travel activity. However, investors are already drawing circles on their calendars around next summer, when the first major new U.S. theme park in more than 20 years will make its debut.
Comcast's (CMCSA 0.08%) Epic Universe doesn't have a firm opening date beyond "2025" just yet, but the highly anticipated expansion to its Universal Orlando resort is already turning heads for its richly themed lands, big-budget rides, and differentiated attractions. It's expected to be a major draw for Comcast's ascending theme parks business, yet once again, there are signs that muscular competition is going to help the House of Mouse more than hurt it.
NYSE: DIS
Key Data Points
Epic expectations
Comcast has been working on expanding its theme park presence in Florida for a long time. It began acquiring land for the purpose more than eight years ago. It eventually revealed its intentions and set a 2023 opening date, but the pandemic pushed Epic Universe's debut more years down the road.
It will be worth the wait for Comcast. When it's on -- the way it was when it introduced The Wizarding World of Harry Potter in Florida in 2010 before expanding that theme to many of its other gated attractions worldwide -- Comcast can give Disney a run for its money. When it's off -- and the company has had more misses than hits over the last nine years at its Florida parks -- it falls short. It's not likely to miss the mark this time. On paper, Epic Universe looks too good to fail, but it doesn't mean that Disney will suffer when it opens its gates.
Demand for tickets will outstrip supply for the first few weeks, if not months. So a lot of people who flock to Central Florida next year bent on checking out Epic Universe won't be able to get through the turnstiles.
Earlier this month, the public got their first hint of what the ticketing situation for Epic Universe would look like in its debut season. Some third-party ticket sellers were told that three-day packages to Universal Orlando would be offered, but that only one of those daily admissions would be usable for Epic Universe. This suggests one or more of the following things:
- Universal knows that demand for the new park will be strong enough that it can essentially sell a day at Epic Universe to "early adopters" for the price of a three-day ticket.
- Comcast is aware that it will have a hot park on its hands, so it's taking advantage by bundling the first announced admissions with a pair of days at its older attractions.
- Universal realizes that the spike in visitors to Epic Universe next summer may come at the expense of attendance levels at its other parks.
Image source: Getty Images.
Everyone gets to ride
The good news for enthusiasts hoping to check out the shiny new gated attraction next year is that the three-day bundle is just the first of the resort's announced offerings. One-day tickets and annual passes will eventually roll out, possibly even in time for the grand opening. The three-day ticket information is simply Universal's offering for folks who like to book their vacations a year out, competing with Disney World's advance booking before its rival locks in the market's most lucrative visitors.
However, Epic Universe can only entertain a finite number of visitors on any given day. Early demand may not be high enough for the three-day tickets to sell out the first few days or weeks of the park's availability on the other end of its official opening. However, if the single-day admissions that follow will be enough to max out the first few weeks or months of capacity, why offer annual passes before the novelty wears off? If there are annual passes available, they will likely be highly restrictive, limited to weekday visits during the slow season until Epic Universe's honeymoon phase is over.
Disney World will be fine. Smaller rival attractions including United Parks' (PRKS +4.47%) SeaWorld Orlando and Merlin Entertainments' Legoland Florida will also be fine. A surge in domestic road-trippers and international tourists will converge on the Sunshine State next summer. To assume that just one entertainment stock will benefit from the renaissance at Comcast's resorts in Orlando would be to make the same mistake that folks made previously when they assumed that Comcast and United Parks would languish while Disney outspent them over the last few years on upgrades and expansion.
All the Central Florida theme park players have been riding Disney World's coattails for more than 50 years now. They're all posting record revenues and earnings, with dramatic double-digit percentage increases in revenue per capita compared to pre-pandemic operations. With Comcast on track to draw larger audiences (likely at higher price points) next year and beyond, now is probably a good time to consider owning shares of all of the publicly traded players. A rising tide should lift all ships -- and Chips and Dales.
