Will Universal's Epic keep the ride going for US theme parks?
Universal is betting billions of dollars that thrill seekers and holidaymakers will be queueing in their thousands this month to ride rollercoasters at its latest theme park, which boasts Harry Potter's Ministry of Magic and a Super Nintendo World.
But real life outside the gates of Epic Universe, and the market for theme parks, are both very different to 2019, when Universal's parent company, Comcast, started planning the massive new site in Orlando, Florida.
Industry executives and analysts have begun to fear that the trade and culture wars sparked by the arrival of Donald Trump in the White House could hit demand among visitors to Florida this year.
One executive expressed concern that the White House's actions could deter overseas visitors, as well as risk an economic slowdown that could sap appetite among domestic visitors for daily tickets that will be priced at more than $100.
Epic Universe, which opens this month, is not the only US investment that Comcast is making in the sector. The group is also opening Universal Horror Unleashed, the first permanent year-round horror 'entertainment experience' in Las Vegas in August; and, in 2026, its first Universal Kids Resort in Frisco, Texas, marketed to families with younger children. Epic Universe is the largest ever investment by Comcast in its theme park business © Felix Mizioznikov/Alamy
Rival Disney's parks and experiences business is also expanding in the US and abroad, with $60bn of investment planned over the next decade.
Disney has more expansion projects around the world than at any time in its history, including new 'lands' and attractions at domestic parks in Florida and California. This week, the group revealed plans for a new theme park resort on Yas Island, Abu Dhabi, albeit funded by local entertainment company Miral.
Theme parks have been a crucial engine for growth for both groups, with cash flow helping support Disney's investments in other areas, such as streaming and movies. Parks and experiences is the largest source of operating income for Disney, and the second-largest revenue driver after its entertainment division.
Comcast president Mike Cavanagh, meanwhile, explained last month about the importance of its theme-park business given — unlike its television arm — it is 'not at all exposed to the shift in time on screens . . . park experiences have been thrilling to people, and we think we lean into that'.
Epic will be the largest ever investment by Comcast in its theme park business. The site — Comcast's fourth in Orlando — includes five different themed areas, including the Wizarding World of Harry Potter, and How to Train Your Dragon. Its opening will enable the media group to offer week-long vacation destinations for tourists across its Orlando sites.
But the opening of the park — the biggest in Florida for more than two decades — comes after a tougher time for the sector over the past year.
Both Comcast and Disney enjoyed strong growth in 2022 and 2023 following the end of the pandemic, which sparked a boom in demand for experiences and travel as people sought to catch up on lost time under enforced lockdowns.
But this bounceback faded in 2024, leaving attendance at the Florida parks still well short of 2019 pre-pandemic highs, according to Aecom, which supplies data on the industry.
Revenues for Comcast at its parks division fell from $8.9bn in 2023 to $8.6bn in 2024, driven by a fall in park attendance, with earnings down from $3.3bn to $2.9bn. In the first quarter of this year, Comcast's parks division saw revenues fall again, which it blamed on the Hollywood wildfires.
Disney's experiences business last year fared better — including cruise vacations — with revenues up 5 per cent to $34.1bn, but still much slower than the 16 per cent growth the year before.
A note by Rothschild & Co's Redburn Atlantic analysts in October warned that the Florida theme park market was 'not healthy', with 2023 attendances about 13 per cent below 2019 levels. It blamed over-aggressive pricing strategies that have hit affordability, particularly for foreign visitors. Read More Female artists drive music sales boom in UK
'While Epic could well attract new visitors to Florida,' Redburn Atlantic wrote, 'given how Florida attendance has not recovered to pre-pandemic levels, with affordability in part to blame, we suspect it is more likely to take share from Disney.'
Giant park operators like Disney and Comcast — followed by mid-level operators such as SeaWorld and Six Flags — have been pushing up per capita revenue through steep price increases. They have been willing to sacrifice high attendance as a result, said Chris Yoshii, global director of leisure and culture services at Aecom. People walk through the Dark Universe at Epic Universe. Comcast is hoping the park's new attractions will drive consumer demand © Thomas Simonetti/Bloomberg
This was in part to give 'a premium experience' for those who can financially afford to visit, he explained, without needing them to wait in line too long. Parks in Orlando and California last summer were supported by wealthy foreign visitors, according to Yoshii.
'It questions whether [a theme park] is really a middle-class activity any more . . . family budgets are stretched and they're really pricing [these consumers] out,' he said.
'They are getting up to a point where this is about as much as they can do in terms of pushing prices. Going forward growing prices and profitability will be challenging in economically uncertain times,' Yoshii added.
Analysts are also asking whether Trump's trade war will add to that uncertainty for the US theme parks. Airlines and hotel groups have warned that domestic travel is waning, while overseas visitor numbers could be hit by the threat of tougher, less welcoming border controls.
Craig Moffett, an analyst at MoffettNathanson, last month pointed to the 'very significant drops in international travel to the United States . . . and some anti-American sentiment' when asking Comcast's management about its theme park business.
But so far, both Comcast and Disney say that US consumer demand remains strong for their amusements.
Comcast's Cavanagh said in the analyst call that both advance ticket sales and hotel bookings were 'strong for the overall parks and for Epic'.
Sales 'continue to be tracking well' and there was 'continued steadiness in the backdrop for parks', he added, with 'a lot of folks from the US' who do not have to fly to get to Florida.
He admitted 'there may be a delayed effect between what the airlines are starting to report on and what we see' but so far 'no real sign of that in our business as we sit here now'.
Comcast and Disney are confident that their new parks and experiences will bring in new audiences. Executives claim that one reason for slower growth last year was the lack of any major new attractions, which tend to drive demand. Comcast is hoping that Epic will change that — this year at least.
Analysts at JPMorgan forecast that Comcast's slate of new openings should 'tap into new demographics and geographies — capturing latent demand'.
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Disney expects its experiences division to be up 6 per cent to 8 per cent on the year, and reported a strong first half of the year. It told analysts this week that bookings at Walt Disney World were up 4 per cent in the third quarter against a year ago, and 7 per cent in the fourth, making the company 'very optimistic' about its prospects in the US.
Johnston acknowledged that foreign visitors to US parks were down slightly in a call with analysts, but added that this had been more than offset by growth in US attendees.
'We've seen a bit of an impact, but it's literally like in terms of the mix one to one-and-a-half per cent. And what I would expect going forward is something similar to that. The good news is we're clearly more than making up for it with domestic attendance.'
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