Universal Opens Diagon Alley – Your Move Disney?

Today marked the opening of Diagon Alley at Universal Orlando and, as expected, Potter and theme park fans showed up in droves. As I am writing this, the line for Harry Potter and the Escape From Gringotts is at 7.5 hours and counting. Across the board, myself included, most are saying it’s the most immersive and highly-detailed theme park land anyone has ever seen. Brinks might as well have a permanent truck stationed behind Gringotts because Diagon Alley will no doubt make piles and piles of money.

Copyright Universal Orlando

Copyright Universal Orlando

Over the last few weeks, I have been asked at least a dozen times, questions like: “What does Disney do now?” “Why aren’t they going ahead with a Star Wars land?” “Disney execs must be shaking in their boots! They have to do something big now!!”  Actually, no, they don’t. I will do my best to explain.

 

Contrary to popular theme park nerd belief, the “winner” of theme park domination doesn’t have the most elaborate theme park restaurants, gift shops or attractions. Having to “one up” your competition is one way to generate revenue, however, it’s not the only way. Keep in mind, making money (whether you may agree with it or not) is the name of the game here. Building something, just for the sake of spending money and being flashy, is really cool for theme park fans, but can be really stupid for business.

Copyright Disneyland Paris

Copyright Disneyland Paris

Part of the problem was fans got used to this “one upping the competition” mentality when Michael Eisner was in charge. Michael fell in love with the theme park business towards the end of his tenure and greenlit projects simply based on how cool he thought they were. Disneyland Paris was notoriously over budget, mostly thanks to him, because he signed off on extremely expensive hotels, lavish attractions and incredible detail. The final result was a breathtaking park that… made very little money. It took years to turn the park around and start making a profit, but that was thanks to a large influx of cash, a name change and a ton of marketing. Granted, Disneyland Paris isn’t doing so hot right now, but that’s another story entirely.

 

Also, there certainly was a rivalry when Universal first opened up shop here in Orlando. Granted, Disney was toying around with an idea of opening a movie theme park in the late 80’s, but rushed everything into production quickly when Universal announced they were opening up just 15 minutes down the road. The Disney/MGM Studios went from being a smaller half-day park to a full-day park and was even rushed to completion to make sure Eisner’s movie park opened in May 1989. A full year before Jay Stein could get Universal Studios open in the summer of 1990. While Disney World was indeed ready for another theme park and needed additional capacity, egos were definitely involved.

Universal Studios Florida

Friends, we are now 25 years beyond those days and while that “rivalry” and those egos hung around a few years after Orlando opened both movie parks, the main players are no longer heavily involved on either side of the Universal or Disney fence. As executives change, so does business strategy. The current regime at Disney doesn’t believe in being reactive to the industry as much as capitalizing on what they already have. So let’s talk about other things that drive people to Walt Disney World besides new attractions, shall we?

 

1. The Classics – Let’s pretend it’s been five years since you’ve been to Walt Disney World. Will you wait until they build something new? Or come back because you miss the Haunted Mansion, Pirates of the Caribbean, Illuminations and Dole Whips? That answer, for most people, is a personal one and often consists of both new and old offerings when deciding to plunk down thousands of dollars for an Orlando vacation. In a way, Disney has been “competing” against Universal since 1971 when the Magic Kingdom opened, building their own list of impressive “must see” attractions, Universal is still in the process of building that legacy.

Copyright Walt Disney World

Copyright Walt Disney World

Also, there is that rare breed of family who has never even been to Orlando before (gasp)! If you have a family of two children who see commercials for Walt Disney World that include characters from Beauty and the Beast and your little princess loves Belle? If you can afford it, you are coming to Disney, regardless of the new Star Wars land opening or not.  Likewise if your seven-year-old Muggle is dying to become a wizard, then Universal may be a stop for you as well. Make no mistake about it, Disney will benefit from Diagon Alley being open. Some, not all, tourists will fly into Orlando to visit both Universal and Disney and perhaps more.

Copyright Walt Disney World

Copyright Walt Disney World

2. Marketing – Much like political elections, the public often ultimately spend their votes (or dollars) with who has the snazziest ad campaign. Proper ad campaigns in the right markets (ones that typically have a lot of disposable income) can make a huge impact on the number of tourists who come into Orlando and the bottom line. Disney is spending a lot of money marketing to international markets who can bring lots of extra dollars to Orlando. For example, there are a lot of extra Brazilian tour groups in the parks this year and may actually set a record in Orlando this year.

Copyright Walt Disney World

Copyright Walt Disney World

3. Seasonal Offerings – Disney is the leader in the industry when it comes to seasonal events that drive extra revenue to the resort. This year, the Magic Kingdom added three extra nights for Mickey’s Not So Scary Halloween Party, Animal Kingdom charged over $100 a ticket for Harambe Nights Saturdays all summer and Epcot has several new ways to see Illuminations while noshing on gourmet eats and sipping on new wines.

Copyright Walt Disney World

Copyright Walt Disney World

Then there are the old favorites like cheerleading competitions in the early spring, Magic Music Days, golf tournaments, conventions and more. There are many different ways to see Walt Disney World than just a family of four packing up the kids in the Winnebago. Many of those groups who come to Orlando make the decision regardless of what the newest E-ticket is in town.

Copyright Walt Disney World

Copyright Walt Disney World

4. Packages And Discounts – Often times, the tipping point on a family making a choice between Disney and Universal is price and convenience. Disney doesn’t offer discounts very often, but they still run a free dining package here and there, Florida resident rates and so on. In addition, there’s that Disney’s Magical Express bus that will take your bags from Orlando International right to your hotel room so you can go straight to the parks and never have to leave Disney property for anything… ever. Sure, some do… but many will stay in the bubble throughout their stay rather than deal with the hassle of renting a car or changing hotels.

Photo by Josh Young

Photo by Josh Young

Now are there more reasons that I didn’t list here? You betcha. My point is the reasons people come to Universal or Disney go far beyond who has the newest, greatest attraction. So can we just stop with the “Disney better step up its game!” nonsense? I enjoy new attractions and themed lands just as much as the next theme park nerd, but let’s try and be a little more grounded in reality. Your thoughts?

 

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2 Comments

  1. Posted July 9, 2014 at 4:22 pm | Permalink

    You make a very valid point. As a theme park enthusiast I naturally crave new and emerging additions, however in the grand scheme of things Disney knows how to drum up business. I think they are finding a great balance of bringing in new projects I.e. New fantasy land and FOF parade and capitalizing on what already exists.

  2. fan51
    Posted July 10, 2014 at 1:38 am | Permalink

    Lets just say Disney has much more ability to respond to the competition, but their slow response is not unrestricted. They only do so much to ignore the attractions war. Eventually, reality will catchup.

    The loss of ability to fill their rooms or a lost sale on one admissions ticket will hurt. While it might not be immediate as Disney hasn’t lost any customers numerically, there will be a turning point if and when this happens.

    I often felt Disney’s MagicBands with Fastpass+ is a great technology, but it will implode if people cannot use it effectively with few attractions to visit. There are limitations at their lesser parks like Animal Kingdom, DHS, and EPCOT. Overcrowding is a major problem. Thus, at some point, more attractions must to added to ameliorate the crowds.

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