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Does Disney World have an answer for Universal Orlando?

Apparently the New York Times quoted my article published November 28th, 2010 where I was reacting to the news that while Universal Orlando was having a banner year, Walt Disney World actually decreased in attendance. Here’s the full context:

The first was an Orlando Sentinel story on the flat attendance at Walt Disney World. I have to think that given the poor state of the economy, Disney would have been happy to have not lost any ground. But the reality is Disney did lose ground to Universal Orlando (despite their attempts at hiding the figures). Harry Potter is drawing guests away from the mouse house and Disney still has no answer lined up. That’s very troubling.

I then went on to talk about how Osceola County can capitalize on increase in attention that’s coming Central Florida’s way with LEGOLAND Florida and the Orlando Thrill park.

Like Disney states in the NY Times article, I believe that the Wizarding World of Harry Potter is a net gain for Orlando tourism business. Unlike Disney World officials, I do believe that there is a high risk of guests shifting their attendance to Universal away from Disney resulting in a net-loss for Disney. Universal is already siphoning off the teens and twenty somethings and LEGOLAND Florida threatens to do the same for the 6 to 10 year old set.

Look at all the Hogwarts scarfs and t-shirts you see next time you’re at WDW. Those guests all visited Universal before coming to Disney. The money they spent there on broomsticks and Butterbeer will not be spent on mouse ears and popcorn. That doesn’t include the guests who are spending a day or two at Disney and then visiting Universal.  I can’t understand why Disney doesn’t appear to be worried.

Take the typical five day family vacation. Disney has spent the last 5 years strategically arranging the chess board to trap tourists on Walt Disney World resort property using Mickey’s Magical Express, increased DVC hotels, free dining, and Magic Your Way tickets that get significantly cheaper after adding the fourth day on the ticket. The combination of the above has allowed Disney to maintain a much higher level of attendance during the depression when visitors were looking to save that extra $200 on a rental car. The theory was that when families still wanted to justify a vacation they could do it by saying “well, we’ll save by spending the entire trip at Disney.”

What Disney didn’t count on was that they were really playing a game of Wizard’s chess and Universal has Harry Potter (and all his fans) on their side. With Harry Potter, Universal has become a two-day visit (well, one and a half days on its way to a two day) and Universal is selling packages that encourage two day purchases and early admission which is a much lower hurdle than Disney trying to increase a visit from 3 to 5 or 6 days. Turns out that when families go on vacation, the allure of fun and adventure is stronger than the desire to save some money by staying only on Disney property.

Some believe that the spell weaved by the Wizarding World of Harry Potter will only create a temporary bump for Universal. But I think they under-estimate how strong a theme park Islands of Adventure is. After all, it was designed, in large part, by Disney’s own Imagineers many of whom were unceremoniously laid off after Paris Disneyland opened.

Universal is quickly growing a user base they can target for repeat visits. Guests visiting this year will tell their friends who will plan vacations of their own. Add a new Harry Potter ride and boom another group of guests coming back. Add another great franchise to another land and more regular visitors will return. Harry Potter has Disney in check and the next move is Disney’s.

Guest visitation patterns is something that will be revealed over time. Everything anybody says at this point is just a prediction. However my real point is based very much on fact.

The main thrust of my quote in NY Times yesterday is that Disney is at risk of losing their position as the best themed entertainment destination. IOA now has multiple examples of rides (Men in Black, Spiderman), queues (HPatFJ, MiB) and lands (WWoHP) that it does better than Disney. The trend for Universal has been to create Disney quality immersive environments for a smaller budget than Disney appears able to. This is a big accomplishment that has greatly improved Universal’s bottom line.

The trend at Disney’s theme parks, on the other hand, has been a mix of lightly themed off the shelf rides (Dinoland, California Adventure, Hong Kong expansion) and an expansion of very low cost Meet and Greets. It’s a quality drop that even average guests have noticed (hence the need to completely remake DCA). With the exception of the Finding Nemo Musical and Expedition Everest (although that has its problems with a non-functional Yeti and a too swift denouement) Disney has done almost nothing that could be considered at the top of the theme park industry in over 15 years. Instead they’ve been focused on building hotels, riding on the coat tails of memories from previous generations (Disney is counting on the Baby Boomer generation to provide a captive audience via DVC purchases).

[Note: Toy Story Midway Mania is a great attraction that capitalizes on a very successful Pixar franchise with incredibly popular characters. It is also a game you can recreate on your own at home on your Wii. So to me that’s a wash. Mission: Space is a good ride, but the pavilion suffers for lack of anything else to do. American Idol Experience, while good, doesn’t seem to be the draw that Disney had hoped it would be. Don’t even get me started on Stitch.]

What I want Disney to do is to re-assert their dominance atop the theme park industry. Here’s a short checklist:

  • Build a new themed land that knocks the Wizarding World of Harry Potter off his broomstick. DHS would be a good place to stick it.
  • Make Animal Kingdom a full-day park.
  • Fix the Fantasyland Expansion so that it’s more than just Princess and Fairies.
  • Figure out how to get the rides-per-capita measurement up so high that guest expectations are exceeded.
  • Add a new layer of ‘virtual augmentation’ to the theme park experience that revolutionizes how guests experience their vacation. In other words, the NGE project had better be amazing, because for $2 billion Disney could have built a fifth gate.
  • Maintain affordability, but make the resort experience so incredible and guest service so magical that there is no doubt where you want to stay when you visit Orlando.

I know Disney has the talent to answer those needs, they just need to pull the trigger. The question is will they? What else do you think Disney should be doing to answer Universal’s recent charge to the front?