Why Disney and Universal are investing billions into their theme parks
The Walt Disney Company and Universal, two of the biggest names in theme parks, are both undertaking historic expansions to their experiences businesses.
Universal Orlando Resort in May opened the gates to Epic Universe, its fourth theme park at its flagship resort. Epic cost an estimated $7 billion to build, according to numbers provided by the University of Central Florida. Brian Roberts, Chairman and CEO of Universal parent company Comcast, called it the "single-largest investment Comcast NBCUniversal has made in its theme park business".
"It's so different than anything else that we've ever built, but certainly I think it's different than anything anyone's ever built," said Karen Irwin, Universal Orlando President and COO.
Epic's opening coincides with an expansion of Universal Orlando's resort portfolio, adding three Loews hotels to bring its total to 11 operated on the property. Universal is betting that the addition of Epic will turn the resort into a full-week destination, a distinction that is normally reserved for its crosstown neighbor, Walt Disney World.
Not to be upstaged, Disney is working on a historic undertaking of its own.
In 2023, Disney announced plans to invest $60 billion in its experiences segment, which includes theme parks, cruise ships and consumer products. Of that investment, $30 billion will go to its domestic theme parks, Disney World and Disneyland.
"We've got a lion's share of that investment coming to us," said Michael Hundgen, portfolio executive creative producer with Walt Disney Imagineering. "It's about finding what strikes the best creative intent in the most value oriented way possible."
These investments come at a time when both Disney and Comcast are paring down or spinning off their linear TV segments, an arena that has seen volatility in recent years. By comparison, theme parks have been consistent revenue drivers for the companies in the post-COVID tourism bounce.
However, the timing of these openings and expansions could prove challenging for both theme parks. Epic's opening summer coincides with fears of a travel slowdown due to economic volatility.
"If you're uncertain how the economy is going to develop, then you're going to try to be more cautious in your spending," said Jorge Ridderstaat, associate professor at UCF's Rosen College of Hospitality Management.
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