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From the Orlando Sentinel:
Harry Potter helps Universal take bigger share of theme-park attendance
By Jason Garcia, Orlando Sentinel
7:44 p.m. EDT, April 19, 2014
Universal Orlando's second Harry Potter land is set to open by summer, and that could be bad news for Walt Disney World and SeaWorld Orlando.
An analysis of theme-park attendance data shows that Universal took visitor market share from its rival resorts after the original Wizarding World of Harry Potter opened in Universal's Islands of Adventure park in 2010.
Disney World's share of Orlando theme-park traffic shrank from 74.9 percent in 2009, the year before the first Wizarding World debuted, to 71.3 percent in 2012, the most recent year for which figures are available. SeaWorld's share dropped from 9.1 percent to 7.9 percent.
Universal's piece of the pie, meanwhile, grew from 16 percent to 20.8 percent during the same period.
Driven almost entirely by Universal's growth, total Orlando attendance rose 7.2 percent, from 63.5 million in 2009 to 68 million in 2012. Disney World's attendance grew modestly during the period, while SeaWorld's declined.
"To see that kind of shift in market share is really phenomenal," said Dennis Speigel, president of International Theme Park Services, a consulting business in Cincinnati. "Very seldom do we ever see that kind of shift in competitive markets."
Universal would not comment. But executives at the resort's parent company, cable operator Comcast Corp., have said in the past they expect to gain more market share, particularly once the Wizarding World of Harry Potter Diagon Alley opens at Universal Studios Florida.
"We're doubling down on theme parks," Comcast Chairman and Chief Executive Officer Brian Roberts told analysts at a conference in January. "We have a low market share and only one way to go."
The market-share calculations are based on annual attendance estimates compiled by the Themed Entertainment Association and the consulting company AECOM. Because the theme parks do not disclose figures themselves, the TEA/AECOM estimates are widely used across the industry. SeaWorld Entertainment Inc., for example, cites the reports in regulatory filings.
Attendance estimates for 2013 are expected to be released in about a month.
Both Disney and SeaWorld officials would not directly answer questions about why they think they have lost market share and whether they expect further losses once Diagon Alley opens.
"We are very pleased with the performance of our parks and resorts business," Disney World spokeswoman Jacquee Wahler said. "As we've publicly reported, we continue to set attendance records, invest in our product and provide more reasons for guests to return."
SeaWorld said attendance alone is not enough to accurately evaluate its performance.
"Analysis of a theme park company's performance should include revenue, operating profits, and the free cash flow that factors into the cost of building and financing new attractions," the company said in a written statement.
"SeaWorld Entertainment does not report attendance on a park-by-park basis, but last year generated its third consecutive year of record revenue and operating profit. That performance is based in part on strong attendance in our SeaWorld-branded parks."
Not surprisingly, Universal's Islands of Adventure, as home to the original Harry Potter attraction, made the biggest gain among individual gates in Orlando, with its market share rising from 7.3 percent in 2009 to 11.7 percent in 2012. Neighboring Universal Studios Florida grew more modestly, from 8.7 percent to 9.1 percent.
All four of Disney World's theme parks ceded ground during the period. The biggest decline occurred at its biggest park Magic Kingdom whose share slipped from 27.2 percent to 25.8 percent.
Analysts say various factors likely have contributed to the shifts. Both Disney World and SeaWorld have added only a few major attractions since Universal launched Wizarding World. The bulk of Disney World's Fantasyland expansion in the Magic Kingdom didn't open until late 2012, while SeaWorld's Antarctica: Empire of the Penguin attraction didn't arrive until early 2013.
Disney World has aggressively raised prices since 2010, with company executives saying they were willing to sacrifice some attendance and hotel bookings in order to rebuild pricing after the global recession. And SeaWorld endured an extended stretch of negative publicity after the February 2010 death of a killer-whale trainer and the protracted litigation that followed.
Universal also struggled through a prolonged attendance slump in the years before Wizarding World opened.
Still, "there's no question that Harry Potter was the biggest driver" of the market-share shifts, Speigel said.
Executives at Disney and SeaWorld have said in the past that they expected to get a bit of a boost themselves from Potter.
"When a competitor puts a good property in the marketplace, it brings more people to the market . And we all know that's good for us because we usually get a good piece of all visitation to Orlando," Walt Disney Co. Chairman and Chief Executive Officer Bob Iger told analysts in early 2011, responding to a question about the impact of the original Wizarding World.
And late last year, in response to a question about Diagon Alley's impending opening, SeaWorld President and CEO Jim Atchison told analysts, "That's actually a benefit for the whole destination. ... It tends to help raise all the ships, if you will."
But the attendance figures show that Universal has claimed almost all of Orlando's theme-park attendance growth since Wizarding World debuted. Combined traffic at Universal's two parks soared 39.6 percent from 2009 to 2012, swelling by more than 4 million visitors in all.
By contrast, Walt Disney World's overall attendance grew by 2.1 percent during the same period, as the resort added about 996,000 more visitors. One of Disney World's four parks Epcot was essentially flat during the period, with attendance inching up by 0.7 percent.
And SeaWorld's attendance declined during the period, dropping 7.6 percent a loss of about 442,000 visitors.
Scott Smith, an assistant professor at the University of South Carolina, said Universal is doing a better job of keeping more of its traffic on property, as Disney World tries to do. And he said that should continue this year with the opening of a fourth on-property hotel, the 1,800-room Cabana Bay Beach Resort.
"Having two parks, plus the CityWalk area, plus the resorts they're now able to keep people almost exclusively on their property," Smith said.
jrgarcia@tribune.com or 407-420-5414
