At a recent trade show in Las Vegas, Comcast’s CEO Brian Roberts (who currently is in charge of Universal Parks and Resorts, amongst other things) was quoted as saying, “We’re doubling down on theme parks. We think that there is a lot of ‘there’ there in the theme-park business for many years to come and that we have a low market share — and only one way to go.”
Them sounds like fightin’ words, don’t it? Ever since the original Wizarding World of Harry Potter opened at Universal’s Islands of Adventure opened in June of 2010, I have read countless posts on messages on bulletin boards, fellow bloggers and even friends say something to the effect of, “Well since Harry Potter is so popular, what is Disney going to do and try keep up with the competition? They can’t just sit back and do nothing!”
While that argument sounds ridiculous to me, I can kind of understand why some may think that. In Orlando, it does seem like there has been a theme park war going on for some years now.
It’s no coincidence that when Epcot opened The Living Seas in 1986, Sea World had been offering other sea life experiences merely 15 minutes down the road. Surely more than a few families have thought, “Well, we have only got three days in Orlando. The kids want to see Shamu, but they can see dolphins and manatees at Epcot and we can still have dinner in World Showcase. Sea World can wait until maybe next trip.”
It’s been well documented that the entire reason why Disney-MGM Studios got the green light (and became a full-day park versus the half-day it was originally intended to be) was because Universal announced they were going to open Universal Studios Florida in 1990. Not coincidentally, Disney-MGM Studios was put on the fast track and opened a year earlier in 1989.
Even when Animal Kingdom opened in 1998, do you think it’s a total coincidence that Busch Gardens in Tampa has featured African animal habitats since 1959? Similar conversations like the one above for Epcot and Sea World surely must also happen for Busch Gardens. “We can just add an extra day to our park hopper and visit Animal Kingdom for a lot less than a ticket to Busch Gardens, plus we don’t have to drive all the way to Tampa.”
No wonder why people think Disney, being the world attendance leader in theme parks, always has to step up and open something new and spectacular to make sure the competition doesn’t creep up. Otherwise, people no longer come to Disney World, right?
Not exactly. While Disney World will always open new attractions, rides and hotels – it is no longer in a position where it needs to “keep up” with any other theme parks in order to keep a competitive edge. Let’s use McDonald’s as an example. While not exactly an apples-to-apples comparison, they do share some similar business strategies.
McDonald’s has always sold three major things since day one: burgers, fries and shakes. No matter who you are in this world – everyone know the clown with the big red shoes will sell you those foods at a relatively dirt cheap price.
Mickey D’s, just like any other publically traded company, does everything it can in order to make more money than it did the previous year, thus making stock holders happy by providing them with higher stock prices and dividends. Sure, one way of making more money is to add new items like McNuggets, McFlurries and McRib sandwiches, but it’s far from the only way.
However, if you think that adding new menu items is the only way that the clown can make more money, you’re just as foolish as the Disney fans and bloggers who think that new theme park rides is the only way to generate more revenue.
For roughly the last five years, Disney has tried a different strategy than simply reacting to or trying to one up the competition down the road to try and gain more revenue. Thanks to Obama’s push, visas are now easier to obtain in countries with booming economies like Brazil, India and China. Disney has been marketing specifically to them (and other countries outside of North America) because when they vacation here, they often don’t just stay for two or three days. If you’re taking the time to cross continents to get here, those guests often stay for over a week, if not two. Plus, they spend a lot more on food, lodging and merchandise than Americans do.
In early 2010, a one-day ticket to Disneyland was $72. In roughly three years, that price jumped to $92, a nearly a 30% increase. While Walt Disney World has also seen steady ticket increases across the board in recent years, they also recently implemented a new ticketing strategy. If you want to visit just the Magic Kingdom for one day, it will cost an extra $5 a ticket, versus if you just wanted to visit any of the other three Walt Disney World parks for just one day.
Does that mean Disney is trying to out price themselves to see when people just refuse to come anymore because it’s too expensive? Kind of. The fact of the matter is, any company that offers a higher end product wants higher end clientele and Disney has been intentionally inching towards appealing to that market over the past few years.
The fact is, new attractions are far from the only factor that drives guests into the parks and into hotel rooms. Even by having a strong economy, Disney has offered far fewer discounted rates or free dining plans as it has in the past.
The proof is in the numbers. While Islands of Adventure did see a huge spike in attendance after they opened the Wizarding World of Harry Potter, all Disney parks in Orlando have seen steady increases in attendance since Hogsmeade opened to the public.
I love new attractions as much as the next guy. Hell, it’s one of the major reasons I moved to Orlando in the first place. However, if you think that building new rides and shows is what it takes to win the theme park wars, you will have to realize it’s not so black and white.
Our next article will focus on the different strategies theme parks take to increase guest spending once they arrive on property. Meanwhile, take a moment to follow TPU on Twitter by clicking here or like our Facebook page by clicking this link.