Universal sees 4 percent drop in this year's attendance

[crazy4wdw]

Universal sees 4 percent drop in this year's attendance
The company tries to soften earlier news of a steeper drop by releasing April figures to go along with its official federal report.

Scott Powers | Sentinel Staff Writer
Posted May 12, 2006, 10:36 AM EDT
An earlier version of this story incorrectly stated that Universal's report was for the second quarter. The report is for the first quarter.

Caught in a calendar crunch during tough times, Universal Orlando took the unusual step today of announcing some financial numbers that show its Orlando theme parks resort attendance fell 4 percent during the first four months of this year, and that income was about the same as last year.

Universal put out a special statement that adds some April 2006 financial data to its usual January-February-March financial report because the big Easter vacation season fell in April this year but fell in March last year.

The financial addendum softened more troubling news reported earlier today in the first-quarter financial statement that Universal's parent company, Universal City Development Partners, filed with the U.S. Securities and Exchange Commission.

Covering January, February and March, but not including the Easter season, that report showed Universal Orlando lost $25 million to start the 2006 calendar year, while suffering a 15 percent drop in combined paid attendance for Universal Studios and Islands of Adventure.

The official quarterly report follows the 2005 annual report, released in March, which showed Universal's attendance fell 11 percent for the year compared with 2004.

The annual report had some good news, showing that Universal had managed to cut costs and increase per-visitor spending in 2005 so that overall the company actually posted a record profit. But analysts focused on the gate figures, saying Universal needed to fix the attendance slide because costs can be cut for only so long.

Some of the positive trends noted in the 2005 annual report continued. Universal's statement on the four-month period said the company's total revenue should match last year's total of $291 million, and its income before taxes and other corporate overhead should go up 2 percent. However, the four-month numbers that Universal released did not include any profit or loss comparisons with the months of January, February, March and April 2005. The April books are not yet closed.

Universal Orlando's president Bob Gault sounded encouraged in a written statement released with the April numbers, despite the continued slide in attendance.

"We're seeing upward momentum from where we were for much of last year -- and we're seeing reason for encouragement," Gault said. "Our financial results through Easter -- which is a more accurate comparison with last year's results -- show that our aggressive marketing efforts and strong, value-driven ticket programs are having a positive impact on our business."

Those positive impacts just don't show up in the official, three-month SEC filing.

In that report, Universal blamed the drop in attendance and the drop in income on the timing of the Easter vacation. Normally a huge money-maker for theme parks, Easter week occurred in April this year, but occurred in March last year. That means, the report argued several times, that the 2005 first quarter may be an unfair comparison because it included that rich vacation period while the 2006 first quarter didn't.

Earlier this week, Walt Disney Co. also blamed the timing of Easter for watering down attendance figures at its theme parks. However, its first-quarter report, filed Tuesday, showed a 3 percent increase in attendance at Walt Disney World for January, February and March.

Universal's first quarter ended April 2. Easter was April 16.

Combined paid attendance for Universal Studios and Islands of Adventure for the official three-month period was 2.22 million people. Total attendance was reported at 2.39 million people. That compared with 2.62 million paid attendance and 2.79 total attendance in the first three months of 2005, which included easter.

"Based on the seasonality of our attendance, the results for the quarters ended April 2, 2006, and April 3, 2005, are not necessarily indicative of results for the full year," the report states.

The SEC filing also notes a few more positive trends. Universal was able to slightly lower its long-term debt in the quarter to $1.04 billion, and was able to more than double the cash it has on hand, to $94.9 million.

[crazy4wdw]

Crowds shrink at Universal
A late Easter holiday adds to first-quarter plunge in attendance

Scott Powers | Sentinel Staff Writer
Posted May 13, 2006

Universal Orlando suffered another big drop in attendance and lost $25.7 million during the first three months of 2006, but the company insists it is doing much better than official reports indicate when April -- which included the Easter vacation season -- is factored in.

Arguing that it turned things around, Universal took the unusual step Friday of releasing some April information -- just hours after it filed its first-quarter financial report for January, February and March with the U.S. Securities and Exchange Commission.

"We're seeing upward momentum from where we were for much of last year -- and we're seeing reason for encouragement," Universal Orlando President Bob Gault said in the written statement.

The first-quarter report, filed by Universal's parent company, Universal City Development Partners, noted combined paid attendance for Universal Studios and Islands of Adventure was 2.22 million in the quarter, down 15 percent.

Total operating revenue was $181.6 million, compared with $209.5 million last year. The net loss was $25.7 million, compared with a loss of $9.2 million a year ago.

But both the quarterly report and the statement argued that those January, February and March numbers were misleading because the big Easter vacation season fell in April this year compared with March last year. Universal's first quarter 2006 ended April 2. Easter was April 16.

Universal's April crowds were so big that they softened the overall drop in attendance this year to 4 percent, Universal said. The company's four-month operating revenue was about the same as in 2005.

Still, the company continued an overall decline in paid attendance that plagued Universal last year. In 2005, attendance fell 11 percent, though the company managed to cut costs and increase per-visitor spending enough to post a profit.

Scott Powers can be reached at spowers@orlandosentinel.com or 407-420-5441.

[Luv2Roam]

They need to come up with some major strategy. That news has to be disheartening for their team members.

[darkacre]

I just saw an ad on TV offering free car rentals if you go to Universal Orlando. That's kinda desperate.

[DancingBear]

Disney's 10-Q reports a 3% attendance increase (over the same quarter 2005), a 4% drop in per capita spending, basically even occupancy rates and slightly increased per room spending.

[DisneyDotty]

Gosh--I was hoping the Universal guests weren't heading over to Disney--it's crowded enough already!
Maybe I need to head over to Universal! :confused3

[Jason71]

I just saw an ad on TV offering free car rentals if you go to Universal Orlando. That's kinda desperate.

True, what next, mailing free park tickets to random FL residents? Oh wait, they already tried that... :teeth:

In all seriousness, I had not heard of this, but it sounds like an (admittedly deserate) attempt to undo some of the damage inflicted by Magical Express. Disney guests without rental cars generally do not make it over to Universal.

[TDC Nala]

I would bet Universal is seeing a bit of fallout from Disney's Magical Express and dining plan offers.

The rental cars might work, but only if Disney guests are willing to forego the dining plan and do Disney as a day trip.

[OhMari]

You can buy 2 day tickets and get the 3rd day free, maybe this bit into their profits.

Universal has to stay open later too. I think it is a rip off opening at 10 and closing at 7.

[flatline]

the ticket blitz year has been a free kid's ticket with every 2 day adult ticket purchased plus 3 additional consecutive days free. I wonder if that's reflected in the admissions. they started adding in the car rentals about 3 weeks ago. I hate seeing things like this, because we love Universal.

[LuvDuke]

************

[All Aboard]

************

Hmmm, 12 letter curse word, 12 letter curse word...? Oh well, I'm stumped.

[ChrisFL]

Hmmm, 12 letter curse word, 12 letter curse word...? Oh well, I'm stumped.

I bet Samuel L. Jackson knows it!

[flatline]

Hmmm, 12 letter curse word, 12 letter curse word...? Oh well, I'm stumped.

Michael Eisner has 13 letters, that's my best guess.

[doubletrouble_vb]

I'll have to start scouting around for discounted tickets!!! This year was supposed to be my Universal Year and I haven't gone yet. Of course I only need 4 days to cover the trip...including driving.

[LuvDuke]

Hmmm, 12 letter curse word, 12 letter curse word...? Oh well, I'm stumped.

I was starting to pontificate about how the drop in attendence may be tied to no more free express passes, and I really thought I had read "2nd quarter".

Well, it was "1st" quarter and a good pontification went down the crapper. :blush:

Since you can delete your own post, I used asterisks. However, next time, I'll make sure there's a correlation between number of asterisks and swear words. ;)

[seashoreCM]

Nobody goes there anymore. It's too crowded. (name withheld)

So "they've" tried everything including sending out free tickets and it didn't work? Nope, they haven't yet tried sending out free express pass booklets.

[flatline]

Nobody goes there anymore. It's too crowded. (name withheld)

So "they've" tried everything including sending out free tickets and it didn't work? Nope, they haven't yet tried sending out free express pass booklets.

they don't use EP booklets anymore, it's a scannable card. :)

[LuvDuke]

Honestly, I can't see how this "new and improved" express pass policy is going to work to Universal's advantage.

[flatline]

Honestly, I can't see how this "new and improved" express pass policy is going to work to Universal's advantage.

$$$$$$$$

but we haven't been going as often, due solely to this change. the standby times have been ridiculous this year.

[ChrisFL]

Honestly, I can't see how this "new and improved" express pass policy is going to work to Universal's advantage.

I can't either, unless they thought they'd get more hotel guests on-site or more express passes sold.

[All Aboard]

Honestly, I can't see how this "new and improved" express pass policy is going to work to Universal's advantage.

Agreed, a greater portion of Universal's guests are local or state residents than Disney's. These guests are less likely to pay for express and more likely to be irked that the free version is gone.

So, do the increased dollars more than offset the turned off guests? Perhaps not. It smelled like a bad move from the start.

[flatline]

Agreed, a greater portion of Universal's guests are local or state residents than Disney's. These guests are less likely to pay for express and more likely to be irked that the free version is gone.

So, do the increased dollars more than offset the turned off guests? Perhaps not. It smelled like a bad move from the start.

you can't suddenly pull a benefit like that away from a guest (especially without any explanation) without a backlash. as an AP holder, it's the coldest move I've witnessed by any park here. I keep hearing how it's going to cut the standby times...bullcrap, they're horrible this year.

[LuvDuke]

Here's my tale of galloping woe: I'm a FL resident and my DD and I went to US/IOA for 3-4 days the last several years. We always stayed onsite so express pass wasn't an issue.

We're not going this year. The US/IOA management pissed me off with this new express pass rip-off and there's nothing new at either park.

We're going to Sea World.

And Disney is headed the same wrong way. $175 for a room at a mod during an "super-extended" summer season. Puhleeze! For what it will cost for a week at WDW, my DD and I can go on a cruise through the Caribbean.

[flatline]

we're Universal AP holders. with gas prices, we're more willing to spend time at WDW and take advantage of the FP's.

[Peter Pirate]

We're considering not renewing this year. Long lines and no new rides, I just don't see it. We can still go to City Walk.
pirate:

[All Aboard]

We're considering not renewing this year. Long lines and no new rides, I just don't see it. We can still go to City Walk.
pirate:

Just after we bit on the two year for the price of one renewal, they yanked the Express machines. They got me.

[Luv2Roam]

I have to say if they are hurting for return guests, taking away free Express is not the way to get return guests. They don't have so many rides and parks like Disney does. With Disney guests can strategize more. There is less ways at USO.
And they have too many rides and attractions that just don't change and are not ones that most want to ride repeatedly. IoA side can get by with it more than USO.

[LuvDuke]

We're considering not renewing this year. Long lines and no new rides, I just don't see it. We can still go to City Walk.
pirate:

The only reason we're renewing is because the renewal costs $99, is cheaper than any other pass and has the advantage of a discount on merchandise and food. There is also an off chance I'll have some business in Orlando and I'll stop in with my DD.

But, that's it. No 4-days for us at US/IOA this year.

[ryley26]

If i were an FL res i'd be upset to a local park up here Cedar point charges for there fastpass. $50 dollars to get in and another 10 + for the fastpass. We go once a year and don't fastpass but it getting tiresome the kids say its not like Disney the waits are to long. We go to Disney and use are FP thank you :thumbsup2

[fccabs]

My Wife and I honeymooned last december at WDW and Universal and the difference between the two places was massive. We stayed onsite at both resorts but Disney went out of their way to make our honeymoon as special as possible while Universal did absolutely nothing. Disney upgraded our room left us half a bottle of champagne, a card and a rose in or room one night and all in all generally made us feel like royalty. Universal didn't even acknowledge we were on our honeymoon and seemed more interested in their conference guests then us. We're planning to go back and stay onsite at WDW again in September/October as we have annual passes and we will still visit universal as we enjoy the parks but we won't consider staying at universal again as the overall expeirence was just so poor compared to Disney.

One thought with regards to universal express is that we found we were able to do everything in both parks in less then a day with universal express and overall we spent less time in the parks because of that. This maybe Universals thinking behind only making them available to hotel guests. By making the offsite vistors queue they keep them in the park longer and therefore hopefully they will spend more money.

[Luv2Roam]

By making the offsite vistors queue they keep them in the park longer and therefore hopefully they will spend more money.
That might be it. Plus hoping for more on site bookings.
But what will probably happen is make it even less likely for AP day trippers to visit and go to Sea World or Disney instead.
I would guess that if locals have USO APs, they probably have them at SW or WDW, or both also.

[flatline]

By making the offsite vistors queue they keep them in the park longer and therefore hopefully they will spend more money.

it's not working with us if that's the intent. we've been going at opening, hitting our favorites, and leaving after lunch. we've been going to a WDW park for a few hours after that. US/IOA used to be an all day trip on the weekends.

[Sleeping Jedi Beauty]

I'm not surprised to see this. With Magical Express and the dining plan, Disney has made it quite easy to never leave Disney property and have all your needs taken care of. Furthermore, Universal has Dr. Seuss, which I read as a child. Disney has Walt's films, which I loved as a child and still love as an adult. Disney has more to draw visitors in and Universal is trying to get people to stay on Universal property, which drives away locals and even visitors. I just don't think Universal can compete with Disney. The reality is that each of Disney's weakest gates(AK at WDW, DCA at DLR) outdraws Universal every year. Universal can make cool rides and neat attractions, but for most people they're probably not much more than your nice local amusement park.

[flatline]

Universal can make cool rides and neat attractions, but for most people they're probably not much more than your nice local amusement park.

UO's parks, resort properties, and Citywalk are a hell of a lot nicer than any amusement park I've ever been to.

certain aspects of UO's parks rival or beat anything WDW has to offer.

[ChrisFL]

UO's parks, resort properties, and Citywalk are a hell of a lot nicer than any amusement park I've ever been to.

certain aspects of UO's parks rival or beat anything WDW has to offer.

100% true

[SaratogaShan]

The withdrawal of free express passes changed our vacation plans. We just spent a week at Disney. We had originally planned to drive over to US/IOA two days out of our trip but we decided that queuing for every attraction with a four year old and a one year old were not our idea of a good time. At Disney, with smart use of fastpass we never waited longer than 15 minutes for an attraction. I am very dissapointed because we like universal, but if things remain as they are now, we will not return until the kids are much older.

[wdw4us2]

Maybe it's because they close some of their major attractions during the week.

DS's class went on their IOA end of school trip last Monday. Dueling Dragons was closed, and the park map showed that it's only open on Friday & Saturday. There isn't enough to do in that park for a one day trip as it is, and then they close one of their major attractions during the week? I don't get it.

[flatline]

Maybe it's because they close some of their major attractions during the week.

DS's class went on their IOA end of school trip last Monday. Dueling Dragons was closed, and the park map showed that it's only open on Friday & Saturday. There isn't enough to do in that park for a one day trip as it is, and then they close one of their major attractions during the week? I don't get it.

it was being refurbished at the time. they were doing the work during the week and opening it on weekends. it's now reopened full time.

[jade1]

Sorry if mentioned but for our group, the extra days on the WDW passes is what is keeping us from US. I think it was $184 for 3 days or $205 for 7. That reduces the hectic pace because we have every day available all week long at Disney prepaid for as, well as keeps us from going off site since we already have a pass for every day. Before we maybe would get a 5 day hopper (Also around $200) for example and have 3 days to do something else, now those days are free on Disney-sort of. That and one room for one night to get FOTL line at RPR has gone from $99 to $249. We hate not having FOTL at US.