What will Disney’s response be to Universals 4th gate?

[RustySpork]

Well, I hope that Universal's new park has so many great and groundbreaking rides, that it puts most of the rides from 30+ years ago to shame. That might spark attendance and a great word of mouth and just then Disney might be concrned. Since that is higly unlikely, everything will remain pretty much the same as it has been this millennium so far for Disney.

Uhh according to their Q3 reporting, Universal's attendance and revenue are up. Disney's Q3 earnings report however said this:

"The decrease in operating income at our domestic parks and resorts was due to higher costs and lower volume, partially offset by increased average per capita guest spending. Higher costs were driven by labor and other cost inflation and expenses associated with Star Wars: Galaxy’s Edge, which opened at Disneyland Resort on May 31. The decrease in volume was due to lower attendance, partially offset by higher occupied room nights. Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending."

 

[bUU]

The question really is will Universals new park affect Disney's attendances negatively, if not why should Disney open another gate?

I think the question is whether Universal's new park will affect Disney's bottom-line. Attendance is a dual-edged sword: It brings in more revenue, of course, but it also increases cost and decreases operational efficacy. People have been speculating that Disney is raising prices to bring down attendance so that those who do visit are happier (and presumably spend more). I don't think that's true, but it might as well be true since that is the effect. If Disney can shed low-revenue/high-cost visitors to Universal in favor of doing a better job retaining high-revenue/low-cost visitors, then that's a big win for Disney.

Right now there are hundreds of people visiting Epcot each day just to stroll around the lagoon and eat food and drink wine, including some of our best friends here in Florida; and this is something Disney now offers about 9? months a year. And it is a more robust angle because every sip of wine is unique, every live performance is unique, and every culinary demonstration is unique, while rides on Mission: Space get repetitive after a while. I'd love to see the numbers because I am beginning to suspect that, aside from the new roller coaster, the most substantial investment per square foot in the EPCOT overhaul is the new festival center. Follow the money - I would bet that the things that that festival center will offer are the things that have the best revenue/cost ratio, and hold the best promise for Disney's further success, even though that fact would greatly disappoint thrill-seekers.

 

[John park hopper]

"Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending."

Nice they acknowledged higher ticket prices. Increased spending on food beverage and merchandise spending--- yea because you raised the price on that stuff as well

 

[KevinPage]

1. Upcharged events

2. new cupcakes

3. reduced cast member hours

and hopefully

4. Bob Chapek’s demise

 

[Goofyernmost]

"Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending."

Nice they acknowledged higher ticket prices. Increased spending on food beverage and merchandise spending--- yea because you raised the price on that stuff as well

And keeping up with the theme of this thread, Universal has not been any slouch when it comes to raising prices either. At times they do have much better special offers then Disney, but basically they are having to charge more because in spite of building or attempting to build 4 parks, the attendance is solefully less then Disney's and since they are in the same basic zip code as Disney their costs are not going to be much smaller to support and maintain 4 parks. Don't forget that the land that Disney sits on was paid for decades ago. Uni is buying up and spending a lot of bucks on commercial properties. Even if it is listed as an asset it is still a massive cash flow killer and now before a single attraction can be built they have to design approve and purchase what will be the necessary infrastructure to get people all over to their properties which require public roads to get too. I don't envy the accountants that work for Universal/Comcast trying to make stock holders happy, at least for a while. But, like with any huge company, they will find a way to creatively spin the entire story.

 

[Goofyernmost]

4. Bob Chapek’s demise

I know that Bob Chapek isn't the most popular, but who in his position have been popular. You guys hate whomever is working to balance creative with the realities of stock holders demands. He is currently the figure head in the massive alteration and updating of WDW. Not a small task or a small budget endeavor. Someone's got to be the scapegoat for fans frustration of them not always thinking the same way we do, but seriously, and I mean seriously do any of us think we could do a better job? If so why haven't we sent a resume to get those available high paying, high pressure jobs.

 

[RustySpork]

I know that Bob Chapek isn't the most popular, but who in his position have been popular. You guys hate whomever is working to balance creative with the realities of stock holders demands. He is currently the figure head in the massive alteration and updating of WDW. Not a small task or a small budget endeavor. Someone's got to be the scapegoat for fans frustration of them not always thinking the same way we do, but seriously, and I mean seriously do any of us think we could do a better job? If so why haven't we sent a resume to get those available high paying, high pressure jobs.

Well, I know that I could do a better job. The first thing I'd do would be to take a sharp turn away from turning Disney World into little more than a shopping mall and food court.

 

[European1992]

Uhh according to their Q3 reporting, Universal's attendance and revenue are up. Disney's Q3 earnings report however said this:

"The decrease in operating income at our domestic parks and resorts was due to higher costs and lower volume, partially offset by increased average per capita guest spending. Higher costs were driven by labor and other cost inflation and expenses associated with Star Wars: Galaxy’s Edge, which opened at Disneyland Resort on May 31. The decrease in volume was due to lower attendance, partially offset by higher occupied room nights. Guest spending growth was primarily due to higher average ticket prices and increased food, beverage and merchandise spending."

Oh, I did not mean to gloat about the "untouchable" Disney, the opposite actually. I really hope that Uni's new park is amazing in every sense. That will benefit everyone, just like Wizarding World did.

 

[Goofyernmost]

Well, I know that I could do a better job. The first thing I'd do would be to take a sharp turn away from turning Disney World into little more than a shopping mall and food court.

OK, but I will factor in how much easier it is to do that stuff while sitting at our computers and not actually having thousands of eyes having thousands of different wants, needs and desires observing you. Every move you make and checking daily on the worth of their holdings. Saying things is a lot different then being able to actually making them reality. I'm not a fan of his either, but I cannot articulate why, he just hits me wrong, but I have neither the experience nor been immersed in the heavy air of running theme parks. I may not like something, but it is a personal thought. I have no idea if I am right. As long as I can remember WDW has always been a shopping mall and a food court. Other then what is offered in them and the prices they charge, the concept has always been there since 1955.

 

[mergatroid]

Universal's 4th gate is considerably closer to the existing campus than Epcot is to the MK and we won't even talk about the distance from MK to DAK.

Can't argue with distance but there's a 'feel' to being within Disney World and not leaving the property that I wouldn't get from going from one Universal park to another based offsite. Not everyone would be bothered by this and it's subjective, however for me there's a difference. Travelling from MK to AK just feels nice because I'm still within Disney World, it looks like Disney and feels like Disney and I prefer that. You don't see the 'outside world' and that adds some extra escapism to the whole experience imho.

 

[Raineman]

Can't argue with distance but there's a 'feel' to being within Disney World and not leaving the property that I wouldn't get from going from one Universal park to another based offsite. Not everyone would be bothered by this and it's subjective, however for me there's a difference. Travelling from MK to AK just feels nice because I'm still within Disney World, it looks like Disney and feels like Disney and I prefer that. You don't see the 'outside world' and that adds some extra escapism to the whole experience imho.

I wonder, when they were in the planning stages for Universal Orlando in the 80s, was there a piece of property available that was large enough for significant future expansion, similar to WDW? I know that Orlando in the 60s, when Disney purchased the land, was smaller than it was 20 years later when Uni was built, so maybe a larger property wasn’t available by then? Maybe Universal didn’t have the $$ to purchase a large piece of property at that time, or didn’t want to go too far outside of the main tourist center of Orlando/Kissimmee?

 

[mergatroid]

I wonder, when they were in the planning stages for Universal Orlando in the 80s, was there a piece of property available that was large enough for significant future expansion, similar to WDW? I know that Orlando in the 60s, when Disney purchased the land, was smaller than it was 20 years later when Uni was built, so maybe a larger property wasn’t available by then? Maybe Universal didn’t have the $$ to purchase a large piece of property at that time, or didn’t want to go too far outside of the main tourist center of Orlando/Kissimmee?

Interesting question that I don't know the answer to. I would guess that back when Uni was being built they didn't envisage it becoming as popular as it has, though they probably didn't have the money to buy more land at that time anyway even if it was available?

 

[tirian]

I wonder, when they were in the planning stages for Universal Orlando in the 80s, was there a piece of property available that was large enough for significant future expansion, similar to WDW? I know that Orlando in the 60s, when Disney purchased the land, was smaller than it was 20 years later when Uni was built, so maybe a larger property wasn’t available by then? Maybe Universal didn’t have the $$ to purchase a large piece of property at that time, or didn’t want to go too far outside of the main tourist center of Orlando/Kissimmee?

Interesting question that I don't know the answer to. I would guess that back when Uni was being built they didn't envisage it becoming as popular as it has, though they probably didn't have the money to buy more land at that time anyway even if it was available?

It was a different era in American pop culture.

WDW was still advertising itself as the “Vacation Kingdom of the World,” which included golf, skiing, fishing, horseback riding, Discovery Island, River Country, and soon Typhoon Lagoon and Pleasure Island. For most of the year, the MK and Epcot were more laid-back experiences; they were only intensely crowded during summer months and major holidays.

Most Florida vacations included other local stops too. WDW hadn’t yet become a lifestyle with guests centering their vacations on theme parks alone.

Much has been written about how Universal assumed their park could happily coexist with WDW in a similar fashion as Uni, DL, and Knott’s do in SoCal. Eisner rushed D-MGM and the rest is history. Check out Disney War.

 

[WDWTank]

Disneys response as always ... Ho Hum, nothing to be concerned about. We are still the # 1 spot. We dont need a park... look at all our new resort rooms, arent they nice?

And it shouldn’t be like that. Back in the ‘90s they were always competing with Universal.

 

[lazyboy97o]

Most Florida vacations included other local stops too. WDW hadn’t yet become a lifestyle with guests centering their vacations on theme parks alone.

Much has been written about how Universal assumed their park could happily coexist with WDW in a similar fashion as Uni, DL, and Knott’s do in SoCal. Eisner rushed D-MGM and the rest is history. Check out Disney War.

Disney even advertised and facilitated visits to other local attractions.

Like Disney, Universal also acquired their land with a very different intention. The theme park was just going to be a side business like it was at Universal Studios Hollywood.

 

[Animaniac93-98]

Disney will raise prices 100% across the board on everything

Don't forget the part where they introduce a half-dozen new partial day ticket options in order to further confuse consumers and make them think spending $100 to visit Epcot from 3:00pm-9:00pm is a bargain.

 

[monothingie]

With universal opening their 4th gate in 2023, what will Disney’s approach be? Will they sit back and wait to see how this park performs or will they be proactive in fast tracking projects to directly compete with Universal?

Raise prices.

 

[wdwfan4ver]

If you expect a 5th park as a response, I think you will be disappointed. I don't see Iger announcing a 5th park before he retires as Disney CEO in 2021 and it depends on who is the CEO.

Bob Chapek is not a guarantee at this point as a future CEO of Disney. The fact Scapegoat's were used in September tells us something about how the 2 theme park resorts in the states are doing. I think it really depends on the Holiday season and what happens Galaxy's Edge crowd wise after Rise of the Resistance is opened on both coasts.

At this point, Disney is not likely to do a response. If there is a response, it would be on past rumored areas insiders mentioned in the past such as Dinoland USA.

There are claims by true insiders on this site that Disney wants to be moving into the land,the Seas, and Imagination, after some of the announced rides are open. That basically means Disney is not focus on the 3rd theme Universal is doing, but more focus on the redo/update of Epcot.

 

[larryz]

Universal is one deal from owning SeaWorld and Aquatica to bring it even.

Universal does not want to buy 3 SeaWorlds, 2 Busch Gardens, a bunch of water parks and a couple of Sesame Places.

And I doubt SeaWorld Inc will sell off their Orlando parks.

 

[Trekkie101]

Universal does not want to buy 3 SeaWorlds, 2 Busch Gardens, a bunch of water parks and a couple of Sesame Places.

And I doubt SeaWorld Inc will sell off their Orlando parks.

This isn’t Universal of old, this is Comcast, this is exactly what they do, buy out and leverage.

Disney gave them a fight over Fox, Epic Worlds isn’t going to be their only response.