Universal leans into theme parks with multibillion dollar Epic Universe, even as economic uncertainty looms

CNBC

22-05-2025

ORLANDO, Florida — With the grand opening of Epic Universe on Thursday, Comcast is positioning its Universal Studios Orlando Resort as a destination, not a pit stop.
For years, Universal's Florida-based resort has played second fiddle to rival Disney. While it boasted three theme parks — Universal Studios Florida, Universal Islands of Adventure and water park Volcano Bay — and a handful of hotels, it wasn't viewed as a destination.
"This fourth gate changes everything," said Karen Irwin, president of Universal Orlando Resort. "It not only cements us as more than a full week destination vacation, but it also adds three hotels to the resort."
Epic Universe opens at a time of economic uncertainty in the U.S., as President Donald Trump has instituted a wide range of ever-changing tariffs that have stoked fears about a global trade war, sent the stock market on its own roller coaster ride and has threatened to tip the American economy into a recession.
The U.S. has already seen a slump in air travel, particularly from international travelers. While those guests are small subset of overall visitors to central Florida, they often spend a longer period of time staying at hotels and visiting theme parks and spend more money on food and merchandise.
"When there's consumer uncertainty, the parks tend to feel it," Jason Armstrong, chief financial officer at Comcast, said during a MoffettNathanson conference last week. "They tend to snap back really quickly, but they do tend to feel that."
"On parks, whether it's current attendance trends or bookings — which, bookings aren't a perfect window, but they are the window you have — there's nothing that's showing up in the bookings trends so far that would indicate any pressure," he added. "That's true in Orlando. It's true internationally."
Those who are most budget-conscious may have already been priced out of the theme park market, Craig Moffett, co-founder and senior analyst at MoffettNathanson, told CNBC.
"There was a time when visiting a theme park was a mass market vacation," he said. "It's arguably too expensive for that to be the case anymore. The tickets alone can run a family a thousand dollars or more for a multiday visit, and that's before hotels and meals. Perhaps that's why we're not seeing as much economic sensitivity as we might have expected."
In spite of these economic headwinds, Epic Universe is expected to draw in millions of visitors, bolster theme park revenue for Universal, as well as Disney just down the highway, and bring billions of dollars to the local economy.
It's also the start of a new era of theme park development for the company.
It took nearly a decade for Comcast to bring Epic Universe to life. From buying up land its previous administration had sold off, to Covid-related construction delays, this 750-acre development is the first new theme park to open in Orlando in 25 years.
Epic Universe, first announced in 2019, represents the largest single investment Comcast has ever made in its theme parks business and in Florida overall, CEO Brian Roberts said at the time. That figure is rumored to be around $7 billion, though the exact amount is unclear.
The park features five themed worlds: The Wizarding World of Harry Potter – Ministry of Magic, Super Nintendo World, How to Train Your Dragon – Isle of Berk, Celestial Park and Dark Universe.
Comcast's investment in Epic Universe is part of a wider push to grow its theme park and experiences business. The company already has plans to open a year-round Hollywood Horror Nights themed experience in Las Vegas later this year, a kid-friendly park in Frisco, Texas, in 2026, and a U.K.-based park in 2031.
"Comcast is leaning into the theme park segment for a simple reason: It's working," Moffett said. "Growth is good and returns on investment are attractive, and the theme parks pay all kinds of strategic dividends by deepening customers' relationships with their favorite Universal characters."
While theme parks are a smaller revenue driver than Comcast's media division, the division is profitable and has significant potential for growth. In 2024, theme parks accounted for a little less than 20% of Comcast's overall revenue, but about 44% of its adjusted EBITDA.
For comparison, Disney's experiences division, which includes parks, represented 37% of the company's revenue in fiscal 2024, smaller than its entertainment business, but accounted for nearly 60% of its net income.
Universal's theme park investment and expansion come as Disney has pledged to spend $60 billion over a decade to improve, innovate and expand its amusement locations. New developments, whether they be parks, lands or rides, spark healthy competition between the companies to create more compelling and innovative attractions to lure in guests.
"This is the first new theme park in Orlando in a quarter century, and those 25 years have seen breathtaking technological advances," Moffett said. "For that reason alone, it's a big deal."
The company has received 161 patents for its innovations at Epic Universe, including new animated effects, ride designs and robotics. Across the new park, there are trackless ride systems, augmented reality and high-resolution projections. In total, the Universal Destinations and Experience division holds 3,300 patents globally.
Major innovations can be seen in rides like Monsters Unchained: The Frankenstein Experiment in the Dark Universe portal and Harry Potter and the Battle at the Ministry at the newest Wizarding World land that transports guests from 1920s Paris to the 1990s British Ministry of Magic.
It is also apparent in new entertainment shows like "The Untrainable Dragon" with the How to Train Your Dragon – Isle of Berk portal, where an animatronic Toothless, with a wingspan of nearly 27 feet, soars over the audience.
"This is a truly momentous occasion for us, and just a significant milestone in that continuum of our development," said Mark Woodbury, CEO of Universal Destinations and Experiences. "The future is super bright. … There's a lot of room for expansion. We're already thinking about how that plays out. New attractions coming, new intellectual property coming, all part of our philosophy to grow our business by expanding our existing footprint."
Woodbury noted that there is plenty of space on the Epic Universe campus to bring other worlds into the fold.
The company has plenty of intellectual properties to tap into, including existing theme park brands like Jurassic Park and Minions as well as untapped franchises like "Wicked."
Where Universal executives also see strength is with its partner brands. Across its domestic and international theme parks, the company has brought to life lands and attractions based on IP from other studios like Harry Potter, Nintendo and Transformers.
"There's no creator out there that wouldn't like to see their their IP delivered to the world in a way like you see in these parks," said Mike Cavanagh, president of Comcast. "It actually enhances the IP for further use of the creator."
Universal's theme park expansions also broaden its appeal to more age segments with the How to Train Your Dragon and Super Nintendo worlds.
"In the past, Disney really had the under 10-years-old segment more or less to themselves," Moffett said. "Universal catered to tweens. The new Epic Universe park brings whole worlds to life for younger children."
More parks, more merchandise, more food options and more guests to cater to open up more opportunities for Universal to generate revenue, not just in Florida, but globally. The company has selected franchise IP that is not only beloved, but evergreen, Comcast executives said. It has also updated characters and stories, like its classic monsters, for a modern age.
"We've soft opened for a while, and that gives you a lens into sort of what people are going to do in the parks," Armstrong said. "And exit surveys have been great. The reviews of it have been terrific."