Please ensure Javascript is enabled for purposes of website accessibility

Disney World Has a Shot to Beat Universal This Summer

By Rick Munarriz - May 14, 2016 at 8:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Another popular attraction will close at Disney's Hollywood Studios.

Image source: Disney.  

Attendance at Central Florida's leading theme parks is off to a bad start in 2016. Disney (DIS -1.35%) stock took a hit on Wednesday after the company revealed a slight decrease in Disney World guests. An 8% uptick in per capita spending is what pushed the division's overall revenue 4% higher.

SeaWorld Entertainment (SEAS -2.96%) -- checking in with a 3% uptick in revenue -- saw its attendance rise 2.8% across all of its theme parks. However, SeaWorld points out that the growth in turnstile clicks at its parks in Virginia, Texas, and California was held back by a retreat in Florida. 

Universal Studios parent Comcast (CMCSA -0.13%) has been the industry speedster in recent years, but even the cable giant is feeling vulnerable these days. Revenue at Comcast's theme parks rose 9.6% in its latest quarter after adjusting for its bigger stake in Japan. Comcast describes guest attendance as "stable" during the period with higher guest spending driving the growth. 

Disney World and SeaWorld Orlando entertained fewer guests than they did a a year earlier. Universal Orlando is merely stable. This isn't the kind of scenario that the industry was hoping for in a climate with low fuel prices keeping airfares and road trips affordable. Making matters worse, these ho-hum showings came with the benefit of the Easter holiday taking place in March this year as opposed to April last year. That inflated the March quarter's results, and will weigh on the current period's eventual performances.

A sharp slide in Brazilian tourists has weighed on all of Florida's tourist magnets, but the parks have made things harder on themselves. SeaWorld is just starting to bounce back after backlash following the Blackfish documentary. Disney and Comcast have dramatically hiked their ticket and annual pass prices in recent months. 

This leaves momentum wobbly as we head into the peak summer travel season. This is the time when operators typically introduce new attractions, and you probably won't believe which company is pulling up lame.

Summer lovin'

SeaWorld expects to open Mako -- the tallest, fastest, and longest coaster in Orlando -- on June 10. Its smaller yet themed Cobra Curse coaster is still on track to open next month at Busch Gardens Tampa. Disney has set June 17 as the grand opening for Epcot's Soarin' Around the World, its globally minded update to Soarin' Over California that will also open at Disneyland. Epcot is also still targeting June as the month when it will open Frozen Ever After, the Frozen-themed boat ride in the park's Norway pavilion. 

Then we get to Universal Orlando. It's been nine months since Islands of Adventure closed The Incredible Hulk Coaster. The ride has been completely retracked, while keeping the same layout. The queue, storyline, and ride vehicles are being updated. It was set to open in June, but a few weeks ago that changed to a "summer" opening. Earlier this week, Universal Orlando showed off the new ride vehicles, playing it up as a "late summer" debut. In short, it looks as if it's going to miss the start of the summer travel season when schools start letting out in early June. 

The other new major ride at Islands of Adventure -- Skull Island: Reign of Kong -- will probably open on time. A media event is slated for late June. Guests have seen vehicles being tested, and it could be weeks away from a soft opening if things go according to plan. Then again, things rarely go according to plan when you're talking about unique attractions. 

Visitors to Central Florida next month may decide to hold off visiting Universal Orlando until Hulk starts raging, and that will most certainly be the case if Kong goes bananas with technical difficulties that push its opening later into the summer. 

Comcast has spent the past few years growing at Disney's expense, largely on the heels of the ambitious Harry Potter-themed expansion. The past five years have gone explosively in Universal Orlando's favor in terms of percentage growth.

 Feature2009 Attendance2014 AttendanceChange
Magic Kingdom 17,233,000  19,332,000 12.2%
EPCOT 10,990,000 11,454,000 4.2%
Animal Kingdom 9,590,000 10,402,000 8.5%
Hollywood Studios 9,700,000 10,312,000 6.3%
Universal Studios Florida 5,530,000 8,263,000 49.4%
Islands of Adventure 4,627,000 8,141,000 75.9%

Data source: Themed Entertainment Association.    

Comcast has big plans. Its fifth onsite hotel opens this summer. The resort will open its first water park next year, along with two new rides for Universal Studios Florida. Any delays on its two additions this summer may send more tourists to Disney World and SeaWorld, but it will ultimately score them in the end. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$94.36 (-1.35%) $-1.29
Comcast Corporation Stock Quote
Comcast Corporation
CMCSA
$39.28 (-0.13%) $0.05
SeaWorld Entertainment, Inc. Stock Quote
SeaWorld Entertainment, Inc.
SEAS
$43.19 (-2.96%) $-1.32

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
317%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/30/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.