As unlikely as it may have seemed during the 2000 – 2009 decade, when successive corporate owners (Vivendi and GE) didn’t make meaningful investments in the company, and a period punctuated by the Great Recession, this week Universal Studios Hollywood is celebrating an outlook of unprecedented growth.
It’s truly been a monumental week for the Universal Studios Hollywood theme park, with expansion-related news coming fast and furiously (literally).
Most tangible for 2014 is tomorrow’s grand opening of the new Despicable Me Minion Mayhem ride. Also opening is Super Silly Fun Land, a Despicable Me-themed family play area.
As you can imagine, we have numerous initiatives underway to spread awareness of the new ride. For me personally an interesting one was the video embedded above, featuring James Franco and some Minion friends. It was created for online use, particularly social-media sharing. (Developing and releasing this video has been an experience — one that would make for a good blog post if only the details didn’t fall into the realm of confidential information.)
Ride launches are big deals for theme parks. Given the high development and construction costs, they tend to be fairly infrequent.
That makes this week’s situation at Universal Studios Hollywood extra unusual.
Not only do we have the Despicable Me grand opening, but we also announced two 2015 launches: Fast and Furious – Supercharged and the expansion of the Simpsons Ride area to include stores and venues right out of Springfield (e.g., Mo’s Tavern). Also it was officially announced that the Wizarding World of Harry Potter will open in 2016 (the date hadn’t previously been communicated).
The New York Times published an article that provides a very good overview of the expansion plans, which include infrastructure improvements such as new parking garages.
Unlike previous corporate owners, current owner Comcast is making a huge (over $1 billion) investment in the Universal theme park business.
This investment in physical expansion coincides with a period of strong financial expansion. Comcast/NBC Universal publicly reported the theme parks division’s operating cash flow increased from $400 million in 2009 to over $1 billion in 2013.
Walt Disney has also reported strong financial results from its theme parks division. Disney and Universal Studios are also both increasing their international footprints with new overseas parks in development.
A heightened appreciation for real-world entertainment?
The growth of Disney and Universal Studios theme park businesses runs counter to a fear that was whispered a few years ago.
While never an official outlook, I recall hearing people in the industry privately express concern that the emergence of high-quality digital entertainment (HD TVs, highly realistic video games, and the unknown impact of the Internet) would render theme parks less relevant. The concern was that less expensive in-home entertainment would rival or outpace the park experience.
Perhaps what really happened is that increased time spent with digital devices has made reliable out-of-home entertainment more valuable. This might be especially true for parents who see a day at a theme park as being a way to get kids away from the Xbox for a period of shared, heads-up family fun.
These last thoughts are only personal speculation. However, it’s noteworthy to me that so many theme parks are thriving despite an ever-increasing volume of competitive leisure-time activities and attention-grabbing digital devices.
For many families, experiencing fun attractions together — with kids looking away from iPads — is worth the price of admission.
(Disclosure and disclaimer: As noted elsewhere on this blog, I am an employee of NBC Universal. All company information mentioned in this post is already publicly available. All opinions are personal and do not represent the opinions of the company. See media relations website for official press contacts and press releases. To state the obvious, the achievements of Universal Studios Parks & Resorts are the result of the hard work and commitment of many people.)