On Aug. 10, Disney Experiences Chairman Josh D’Amaro got on a stage and made a promise about the future of Disney Parks.
“Everything that we’re going to share with you tonight is in active development,” D’Amaro proclaimed in Anaheim, Calif., at the semi-annual D23 fan convention. “This means that plans are drawn, this means that dirt is moving. I just want to be clear with all the fans out there – this isn’t blue-sky, we are going to do all of this.”
The 12,000 Disney fans in attendance cheered.
Over the next two-and-half hours, Disney parks announcements came fast and furious. There would be a new “Encanto” attraction for Disney’s Animal Kingdom, “Avatar” and “Coco”-themed attractions coming to Disney California Adventure, four new Disney Cruise Line ships being added to the fleet, and a “Monsters, Inc.” rollercoaster based on the movie’s climactic door chase.
By the end of the presentation, it felt as if Disney would be returning to theme park dominance after a few years when the company’s superiority seemed to wobble.
Disney knew it had to bring the fireworks. Next year, rival Universal Studios is unveiling Epic Universe, which it calls “the biggest, most technologically advanced theme park in decades,” just down the street from Walt Disney World in Orlando, Fla.
A renewed battle between Disney and Universal is heating up as theme parks, which have become vital to each company’s bottom line, are struggling with soft demand that they expect to continue.
When Disney faltered at the box office in 2023 and struggled to make its streaming business profitable, parks served as a money machine. The Experiences segment, which includes parks, pulled in a record $32.55 billion in revenue last year, or 37% of Disney’s total revenue — and generated six times as much operating income as its entertainment division in 2023, and three times as much in 2022.
Theme parks contributed $8.95 billion, or 21% of the NBCUniversal parent company Comcast’s Content and Experiences revenues in 2023, and half of the adjusted (EBITDA) earnings. Comcast theme parks revenues have ballooned 77% since 2021, while adjusted EBITDA is up 164% in that period, which spanned the global COVID-19 pandemic.
To get that cash machine turned back on, Universal’s 110-acre, state-of-the art Epic Universe is coming to Orlando in 2025 with lands dedicated to beloved franchises like “Harry Potter” and “How to Train Your Dragon.” Disney will employ a collection of stop-gap measures – ride re-themes, live shows, 3D movies and nighttime spectaculars – before some really-for-real projects get built near the end of the decade.
“If you look at the last six or seven years, we’ve opened up a lot in Orlando,” CEO Bob Iger said at the MoffettNathanson media conference in May when asked about Disney’s lack of response to Epic Universe. “As we’ve seen in the past, Universal’s expansion does bring more visitation to Orlando…I’m mindful of what they’re doing. But I’m confident in what we built and I’m confident in what we will continue to build. It’s not something that should be distracting to us or anxiety provoking.”
Iger cited Galaxy’s Edge, the “Star Wars”-themed land in Disney’s Hollywood Studios, which opened in the summer of 2019; along with a “Guardians of the Galaxy” coaster in EPCOT (summer 2022) and a “TRON”-themed coaster in the Magic Kingdom (early 2023).
But he failed to mention Tiana’s Bayou Adventure, the costly and problem-plagued redo of Splash Mountain that was just a few weeks away from opening. As one insider said, “Nobody is booking a plane from Dallas to ride TRON.”
While Iger projects a lack of concern about Universal’s new plans, massive layoffs during the pandemic have decimated the ranks of Walt Disney Imagineering, the secretive arm of the company responsible for theme parks — and diminished the unit’s institutional knowledge.
Iger also didn’t acknowledge Universal’s recent pattern of adding at least one major new attraction to one of its parks each year — attractions like the Velocicoaster, Hagrid’s Magical Creatures Motorbike Adventure or Villain-Con Minion Blast down in Orlando.
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Attendance is but one aspect of the parks revenue battle. Disney, in recent years, has perfected the art of squeezing more out of each guest through costly add-ons.
Earlier this month, the Themed Entertainment Association and AECOM published its list of most popular theme parks, with the Magic Kingdom at #1 with a slight increase in visitors and EPCOT at #3 with a sizable increase in visitors, thanks to attractions like the “Guardians of the Galaxy” coaster and a walkthrough exhibit inspired by “Moana.”
But both Disney’s Hollywood Studios and Disney’s Animal Kingdom showed a decrease in 2023 attendance.
“The lower-income consumer is feeling a bit of stress, and the higher-income consumer is traveling internationally a bit more,” Disney CFO Hugh Johnston said on the Disney earnings call this month. This “softening,” Johnston warned, could “impact the next few quarters.” Guests with the means aren’t going to the parks anymore, they’re traveling overseas. And those with less income can’t afford it.
While attendance is down, per capita spending is up 2% thanks largely to add-ons like the Lightning Lane program (formerly Genie+), a skip-the-line feature that used to be free and now costs between $20 and $40 per person per day, with additional costs on a per-attraction basis (costing up to $20 each). And Disney has employed Magic Bands, a wristband that allows you to get into your hotel room, check into the park and charge things to your credit card. This also used to be free but is now something for which customers pay extra.
Len Testa, a theme park analyst and owner of TouringPlans.com, estimated that the skip-the-line add-ons have generated between $500 and $800 million in revenue a year for Disney. Another source said that when Imagineers are pitching new attractions estimates for these numbers are factored in before being given the go-ahead.
The added costs are unpopular, complicated and require customers to give considerable attention to their phones when they’re supposed to be on vacation.
But the squeeze isn’t just on at Disney. A recently unveiled first-of-its-kind dining package for Universal Orlando Resort could save guests as much as $1,000 on a trip between now and April, Testa noted. The same TEA-AECOM report showed that attendance to the Universal Orlando Resort parks has also slowed. One individual with knowledge of the situation, who watches theme park trends, remarked that the marketing for Epic Universe has been so strong that those planning a trip have likely decided to wait until next year, when they can visit a brand-new theme park.
The origins of the Disney vs. Universal war
The Disney vs. Universal theme parks battle dates to the mid-1980s when Michael Eisner was running Disney.
In 1985, Eisner announced a bold new addition to Walt Disney World — a working studio. The eventual park, Disney-MGM Studios (now Disney’s Hollywood Studios), first made a go at being a full-day theme park, with a behind-the-scenes tour.
Years earlier, Universal was desperate to open a new park in Orlando. The studio had gone to corporate partners, including Paramount Pictures, where Eisner was an up-and-coming executive.
When Eisner announced Disney-MGM Studios, Universal felt betrayed. Sid Sheinberg, Universal’s CEO and president, was so incensed that he considered suing. The Disney park was “a rip-off of a concept that we worked hard to develop,” he later told Kim Masters, author of “Keys to the Kingdom: How Michael Eisner Lost His Grip.” While Disney held a near monopoly on Orlando theme parks, “they sure as hell weren’t in the studio-based theme park business,” Sheinberg said.
Eisner, for his part, denied being present for any park pitch meeting while at Paramount and assured the media that Universal was invading Disney’s “home turf.”
Ultimately, Disney beat Universal to the punch. Disney-MGM Studios opened in the summer of 1989, amidst a flurry of activity at the Florida park that makes the announcements at D23 look positively quaint. Disney opened the nighttime dining, entertaining and shopping district Pleasure Island, a new water park called Typhoon Lagoon and the Wonders of Life pavilion at EPCOT Center.
Universal Studios Florida (now known as Universal Orlando Resort) opened in 1990. Unlike Disney’s new park, Universal’s was plagued by faulty ride systems and sluggish attendance. It went for the same you-are-there behind-the-scenes atmosphere, with a (briefly running) tram tour and a working film and television studio.
Still, the escalation continued. In 1998, Disney opened Disney’s Animal Kingdom, its boldest gamble yet, which combined attractions with real-life animals along the lines of Busch Gardens. A year later, Universal opened Islands of Adventure, which included lands devoted to Marvel (pre-Disney acquisition), “Jurassic Park” and classic newspaper comic strip icons, but also featured lands devoted to mythological characters and ancient lands. Again, Islands of Adventure got off to a rocky start but found its footing and is widely celebrated today.
A seismic change happened in 2010 with the opening of The Wizarding World of Harry Potter at Islands of Adventure. J.K. Rowling first gave Disney a shot at developing theme park attractions based on the source material. When she became unhappy with Disney’s approach, she took the project to Universal Studios. The highly immersive land, with exclusive merchandise, food and an attraction (Harry Potter and the Forbidden Journey) that used proprietary technology, wasn’t just as good as anything Disney could have cooked up – it was better.
With the opening of the Wizarding World of Harry Potter, Universal established itself as a must-visit destination. “Harry Potter started to change the center of gravity,” said a theme park insider. “Before, you’d go to Disney and Universal – or maybe SeaWorld – would be the second choice.”
And Universal continued to battle Disney every step of the way.
In 2017, for instance, the media previews for Pandora – The World of “Avatar,” a highly themed addition to Disney’s Animal Kingdom, happened at the same time as the press event for Volcano Bay, Universal’s first “water theme park.” Volcano Bay and the “Avatar” land at Disney’s Animal Kingdom opened almost simultaneously.
An epic universe
Next year the opening of Epic Universe, a sprawling theme park with lands dedicated to Nintendo characters and the company’s stable of Universal Monsters, will heat up the competition once again. A new hotel buttresses the park. And an original land, Celestial Park, connects the various portals cascading through the center of the complex like a shimmery sliver, with a new rollercoaster (Stardust Racers) adding kinetic energy.
Epic Universe loomed over some of Disney’s announcements at D23. The proposed villains land in the Magic Kingdom seemed like a volley following Universal’s Monsters-themed land coming to Epic Universe, with the emphasis on edgy spookiness.
But the timing of when things will open makes the theme park arms race much closer than originally imagined.
As Testa points out, the ideal opening date for Epic Universe was early 2024. But with the dining plan announced already, the earliest it could now open is probably late May 2025. Assuming that Epic Universe opens next year, that would give the park only a 12- to 18-month head start to change the hearts and minds of Orlando visitors. “They’re giving up a lot of their advantage,” said Testa.
And before Epic Universe can open, Universal needs to have a transportation infrastructure in place that feels “seamless and smooth,” especially since it will be connecting geographically disparate locations, Testa said. With the opening of Epic Universe, complete with a new hotel (and value-priced hotel rooms elsewhere on property that are far cheaper than Disney), Universal will “try and lock you into a week-long vacation.”
Not that everyone thinks that Universal will be able to shift the habits of countless Central Florida vacations.
“I don’t know if you can change 50 years of Disney vacations,” said Alicia Stella, a leading theme park blogger. Even if Epic Universe is a runaway success, Stella said, “It’s not going to shift the tide as much.” Disney has “more parks, they have more history.”
Instead, the war between the two giants will result in other casualties – smaller parks like Sea World and Busch Gardens and cheaper hotels that line International Drive (those are already being eaten into by Universal’s value hotels).
Individuals with knowledge of the situation said that Disney is likely to complete its initial projects, including a re-theme of the 3D movie in the Tree of Life at Disney’s Animal Kingdom going from “A Bug’s Life” to “Zootopia” by next year. 2026 will see Test Track, an attraction that took over for World of Motion in EPCOT in 1998, reopen with a new theme. And by 2027 an Indiana Jones attraction will take over for Dinosaur in Disney’s Animal Kingdom.
“Spreading out these attractions over multiple parks is smart,” said Stella. “But [it’s] also the bare minimum Disney could do.”
Disney also plans to open a new Magic Kingdom nighttime spectacular, parades (fan-favorite Paint the Night is rumored to finally head to the Magic Kingdom) and other live experiences, like a Disney Villains-themed show that would replace a “Cars” show at Disney’s Hollywood Studios and serve as a trial run for the bigger villains land.
