When Comcast acquired NBC Universal some years ago, many believed that the chain of Universal theme parks would be deemed expendable and quickly be sold off. However, these speculations proved to be unfounded when Comcast spent upwards of a hundred million dollars to construct a “Transformers” ride in the Orlando park. Brooks Barnes from the New York Times points out how this move was not enough to satisfy some of the most stubborn skeptics. Comcast, however, recently reaffirmed their stance as they have announced they are planning to inject billions in their Orlando and California theme parks. Furthermore, they are opening more attractions and resort hotels as they view these parks as robust revenue drivers.
These announcements come as no surprise to some experts who have kept a close eye on the skyrocketing attendance number in recent years. In 2014 alone, attendance spiked more than 10.4 percent engendering about 40 million turnstile clicks. This growth hasn’t stagnated this year as the operating cash flow has increased nearly 50 percent compared to last year reaching the $600 million mark.
Stephen B. Burke, who presently serves as the CEO of NBC Universal and Senior Vice President of Comcast, reiterated the company’s position in a conference calls with analysts last month. They see this sector as a viable driver of growth for the next decade or two.
Many are wondering if Comcast is acting too swiftly, ignoring longstanding issues that have continually plagued the industry. Regardless, the speed and immensity of their undertaking is difficult to dispute. Upon exploring the 800-acre plot of Universal Orlando, you will encounter a slew of ongoing construction sites. Four cranes are in position being used in the construction of a brand new watermark, Volcano Bay. Less than a quarter mile away stands six more idle cranes waiting to be used for another project. Plans for the 1000 room hotel Sapphire Falls that will occupy a chunk of the Orlando plot were recently released. Comcast executives are hoping that this hotel, which will cost upwards of a quarter billion dollars to construct, will help fortify Universal’s conference business.
Sapphire Falls represents only a small portion of the hotel rooms they are planning to add in the coming years. Universal is hoping to more than double the number of on-site rooms to a number of 10,000 or so. Over the course of the last two years, a number of new attractions and rides have been created including those with Despicable Me, Harry Potter, and Transformers themes. The aforementioned expansions and construction relate only to the Florida location. The park on the other side of the nation in California is also currently undergoing an expansion costing upwards of $1.5 billion. Universal is also in the midst of constructing a Beijing-based theme park that is slated to open in 2019.
Some experts believe that these parks are particularly vulnerable during economic lulls. For the time being, however, Universal theme parks were actually brought in more profit than did the broadcast television and movie sector of the company. Only time will tell if Comcast’s heavy investments pay off.