Is this a reason for Disney to worry?

[Maxpowers]

I think Comcast shouldn't remind people that they are associated with Universal. So when your cable guy shows up 10 hours late, if at all, you can not associated it with Harry Potter and Transformers.

 

[adam.adbe]

I think Comcast shouldn't remind people that they are associated with Universal. So when your cable guy shows up 10 hours late, if at all, you can no associated it with Harry Potter and Transformers.

I think Comcast know perfectly well what they're doing. They've seen the dumb-pipe and ala-carte future of cable TV just as clearly as Disney investors are starting to, and figured that if their cable business is going to be relegated to dumb-pipe commodity status, then then it'll be their oil you're pulling through it. This is AOL, just done right, and at the right time.

 

[Eoghann]

The park cannibalization that became immediately apparent when animal kingdom opened all but precludes any "new park" in the traditional sense. People have increasingly limited funds for vacation and less time off to spend it.

This is particularly important and people tend to ignore it. There's only so many days a year people can be on vacation and even those who can take 2 weeks at a time, may not be able to afford 2 weeks at Disney (or Universal) prices. The only advantage an additional park offers is space to spread out visitors but none of the parks have actually reached their true capacity anyway and it's much cheaper to expand or redevelop an existing park. MK is closest to maxing out but there's a fair amount of undeveloped space there too and besides if current developments at DHS and AK are successful that may spread the crowds more naturally anyway.

Disney still has a huge advantage there though with its substantial resort infrastructure. It's a game Universal is investing heavily in, but for the moment people are overwhelmingly going to stay at Disney and then visiting Universal, not the other way round. The new waterpark makes Universal more of a complete vacation package, but I think people are vastly underestimating how expensive it would be for them to purchase land for another gate.

But there's other cannibalization happening too. Take a look at the attendance for non-Universal or Disney parks in Florida. They are going to wither long before Disney suffers any noticeable loss.

 

[Eoghann]

In the old days, Walt would have started an airline.

He might well have done. He'd also probably have gone bankrupt doing it. It's a terrible business to be a small player in.

 

[Eoghann]

I think the "vision" for MGM is this:
Magic kingdom lite

Most likely yes because it's the model that has most consistently worked. Yes other parks like EPCOT have been "successful", but they I don't think they would have been without the Magic Kingdom drawing people in the first place.

Disney knows three things:

• The Magic Kingdom template works
• Heavily themed lands work
• The money is in the merchandise

So that's what they will build to. EPCOT or Animal Kingdom are much harder to build, they take some sort of vision and as soon as that visionary is absent the whole thing starts to crumble. The Magic Kingdom template on the other hand is like a self winding toy.

The only exception is I'm not sure we'll see a Princess land. There are other substantial merchandising opportunities that don't already saturate WDW.

 

[eXo]

Disney are also beholden to the cost of airfare. Especially for international visitors, the flights alone can be costly enough to make short stays seem like really poor value for money. Flying from the midwest, I'm a thousand bucks in before I've even exited MCO. A three day vacation, even if the mouse is feeling generous with hotel rates and dining plans, is still going to be pricing out at north of 2K, which starts looking like actual vacation money. So then I'm left thinking, do I drop another 1K or so to do a week, or do I just go to Spain.

In the old days, Walt would have started an airline.

I think you are right about Walt Starting an airline actually. It sounds like him. Only he would have tried zeppelins or some crazy crap.

But airfare affects both parks, not just Disney. I was primarily looking at costs once tourists are on the ground, as everything before that is the same for both parks currently.

 

[Maxpowers]

I think Comcast know perfectly well what they're doing. They've seen the dumb-pipe and ala-carte future of cable TV just as clearly as Disney investors are starting to, and figured that if their cable business is going to be relegated to dumb-pipe commodity status, then then it'll be their oil you're pulling through it. This is AOL, just done right, and at the right time.

I am sure they are aware of what they are doing. But as the #8 most hated company in the US (according to bloomberg), I would think from a marketing standpoint you'd want to keep your hated brand name away from your loved brand name...

 

[adam.adbe]

I am sure they are aware of what they are doing. But as the #8 most hated company in the US (according to bloomberg), I would think from a marketing standpoint you'd want to keep your hated brand name away from your loved brand name...

Maybe they think some of the wizard dust will stick to them too.

 

[Planogirl]

This is particularly important and people tend to ignore it. There's only so many days a year people can be on vacation and even those who can take 2 weeks at a time, may not be able to afford 2 weeks at Disney (or Universal) prices. The only advantage an additional park offers is space to spread out visitors but none of the parks have actually reached their true capacity anyway and it's much cheaper to expand or redevelop an existing park. MK is closest to maxing out but there's a fair amount of undeveloped space there too and besides if current developments at DHS and AK are successful that may spread the crowds more naturally anyway.

Disney still has a huge advantage there though with its substantial resort infrastructure. It's a game Universal is investing heavily in, but for the moment people are overwhelmingly going to stay at Disney and then visiting Universal, not the other way round. The new waterpark makes Universal more of a complete vacation package, but I think people are vastly underestimating how expensive it would be for them to purchase land for another gate.

But there's other cannibalization happening too. Take a look at the attendance for non-Universal or Disney parks in Florida. They are going to wither long before Disney suffers any noticeable loss.

I wonder about LEGOLAND. I'd like it to do well only because I'm still very fond of the old Cypress Gardens area. Plus I like Lego Batman.

 

[Antasia]

I am overly tired with the Disney vs. Universal comparisons. They both exist and they both are doing well...and will continue to do so. I am a huge Harry Potter fan yet I have no desire to spend the money to visit IOA nor USF. Did a Disney exec. flub up a deal that Walt would have secured? Yes. The benefit of AVATAR is that it is going to be done so well that it will be thought of as an original Disney property that someone else made movies about. I have thought, because I am also a huge Star Trek fan, that if Universal built a Star Trek Land to compete with Disney's Star Wars Land would I then visit? The answer is still no. Just to see what some people are so hyped up about regarding USF and IOA I have watched complete walkthroughs of the entire UO property and...meh. There will be Universal families staying on property and soaking up all that is Universal. There will be families like mine staying on Disney property soaking up all things magically Disney. Then there will continue to be those that stay at one and visit the other to enjoy a favorite attraction or to experience a new one. Lastly are the people staying off property buying Orlando passes exploring what they wish. Universal opens Kong and Disney opens AVATAR. Universal opens a third gate and Disney opens a fifth. And on and on it will go. Plan and enjoy your vacations wherever you choose!

 

[Eoghann]

I wonder about LEGOLAND. I'd like it to do well only because I'm still very fond of the old Cypress Gardens area. Plus I like Lego Batman.

We did LEGOLand about three years ago when the boys were the perfect age for it. It's a very niche park that almost entirely caters to young kids, although I personally loved Miniland. They are actively expanding it and I think the LEGO factor alone might help it stand out a bit, but I can't see it ever being more than a 1 day trip.

 

[rteetz]

Universal opens a third gate and Disney opens a fifth. And on and on it will go. Plan and enjoy your vacations wherever you choose!

I can see universal opening a third gate before Disney does a fifth. In today's society people don't have the vacation time to keep adding days. For example the average stay at WDW did not increase much at all when Animal Kingdom opened. Disney adding a fifth gate wouldn't make people stay longer, instead they would spend less time at the other parks in order to go to the fifth.

 

[gonzalj1]

http://www.fool.com/investing/general/2015/09/26/1-more-reason-for-disney-world-to-worry.aspx

What do you think?

Do the math - All 4 Disney parks get 51,500,000 visitors compared to Universal's 16,400,000. That's more than a 3-1 margin. Immediate concerns - nope. Now if the trend continues and it appears that Universal is taking market share (the real concern here for Disney) then expect the mouse to react strongly. You may even be seeing some of this happening now as preemptive strikes with the additions to AK and HS.

What I'd like to see is how many people go exclusively to Universal and never touch WDW property. If that number is rising then you have something to be concerned about.

 

[middlechild]

Hate to stir the pot, but TDO does not care what Universal's numbers are. Parks are only part of the overall revenue picture for TDO. Movies and TV are more worrisome. The parks are like retirement checks, they just keep on paying in. TDO Parks & Resorts chair would watch their own pipeline, occupancy rate, bookings, etc. Only fools buying stock for speculation would look at Universal's numbers as an indicator of future business. Roll all theme parks together to get an idea of the market direction, but spikes and dips in any one park is meaningless.
-- Middle

 

[rteetz]

Hate to stir the pot, but TDO does not care what Universal's numbers are. Parks are only part of the overall revenue picture for TDO. Movies and TV are more worrisome. The parks are like retirement checks, they just keep on paying in. TDO Parks & Resorts chair would watch their own pipeline, occupancy rate, bookings, etc. Only fools buying stock for speculation would look at Universal's numbers as an indicator of future business. Roll all theme parks together to get an idea of the market direction, but spikes and dips in any one park is meaningless.
-- Middle

Just to help you with the acronyms TDO stands for Team Disney Orlando. TWDC is the Walt Disney company as a whole. So yes TDO only does care about WDW parks and resorts. TDA cares about Disneyland parks and resorts. TWDC cares about everything. I'd also like to point out that parks like Epcot and DHS haven't seen large attendance increases they have only been increasing between 1-3%. Universal numbers may not matter now but if they keep investing as much as they say they are it could change disneys look at things. There also is no chair for TDO there is a president and that is George Kalogridis but these days he doesn't even have much say in what happens to the parks. Most decisions come straight from Burbank and TWDC.

 

[Planogirl]

Do the math - All 4 Disney parks get 51,500,000 visitors compared to Universal's 16,400,000. That's more than a 3-1 margin. Immediate concerns - nope. Now if the trend continues and it appears that Universal is taking market share (the real concern here for Disney) then expect the mouse to react strongly. You may even be seeing some of this happening now as preemptive strikes with the additions to AK and HS.

What I'd like to see is how many people go exclusively to Universal and never touch WDW property. If that number is rising then you have something to be concerned about.

We have done that but not often. We have drastically cut back on the number of days spent on Disney property though but we are just one family.

As for that attendance, is that count first park of the day for both resorts? I'd hope that hopping numbers are excluded.

 

[minnie-apple-mouse]

We have done that but not often. We have drastically cut back on the number of days spent on Disney property though but we are just one family.

As for that attendance, is that count first park of the day for both resorts? I'd hope that hopping numbers are excluded.

I have read on here that the "hop" does not count as attendance. Same for UNI/IOA I would assume-esp since one attraction alone requires a hop.

 

[rteetz]

I have read on here that the "hop" does not count as attendance. Same for UNI/IOA I would assume-esp since one attraction alone requires a hop.

I would like to add that the AECOM/TEA numbers are guesstimating really because neither Disney nor Universal post actual attendance numbers. DHS saw a very small increase last year yet it's possible it didn't even increase at all actually.

 

[Antasia]

I can see universal opening a third gate before Disney does a fifth. In today's society people don't have the vacation time to keep adding days. For example the average stay at WDW did not increase much at all when Animal Kingdom opened. Disney adding a fifth gate wouldn't make people stay longer, instead they would spend less time at the other parks in order to go to the fifth.

I guess the point I was trying to make was that the companies are watching each other and each will make a counter move.

 

[DisUniversal]

Hate to stir the pot, but TDO does not care what Universal's numbers are. Parks are only part of the overall revenue picture for TDO. Movies and TV are more worrisome. The parks are like retirement checks, they just keep on paying in. TDO Parks & Resorts chair would watch their own pipeline, occupancy rate, bookings, etc. Only fools buying stock for speculation would look at Universal's numbers as an indicator of future business. Roll all theme parks together to get an idea of the market direction, but spikes and dips in any one park is meaningless.
-- Middle

TDO most definitely cares what Universal's numbers are. They would be complete fools not to be paying attention to their closest competitor. Even if WDW's attendance numbers are 3X what Universal's are, what do you think their profit margin is? I recall reading somewhere it was an industry high 35% or so (not surprising given their "charge more for less" mentality over the past decade). So out of those 51,000,000 people who visit annually, 17,000,000 represent the profit. You don't think they'll care if 5,000,000 of them choose to spend their vacation dollars somewhere else?