Is Universal Studios Gaining on Disney?
The hottest story in theme park circles this week is how Universal Studios is gaining on The Walt Disney Company’s theme park empire.
What happened, and how much truth is there to this claim?
Last week, the Themed Entertainment Association (T.E.A.) released its park attendance estimates for 2022.
I’ve analyzed these numbers for more than a decade now, and I’m aware of the caveats.
Critics suggest that the T.E.A. doesn’t offer official numbers but rather estimates, which is true.
Lately, the T.E.A. report, which you can read in its entirety here, spends an entire section describing its methodology.
Here’s the pertinent quote:
“AECOM obtains the figures used to create the TEA/AECOM Theme Index and Museum Index through a variety of sources, including statistics furnished directly by the operators, historical numbers, financial reports, the investment banking community, local tourism organizations, and professional estimates where necessary.”
Since I came up through the movie box office industry, which employs extremely questionable tactics, I view this methodology as completely understandable and logical.
Throughout the years, Universal Studios fans had dismissed this data by saying, “How do they know? They’re just guessing.”
Lately, extremely loyal and somewhat tribalistic Disney fans have made that claim instead.
That’s because the tide has turned since the pandemic’s start. Now, Universal Orlando Resort has gained a bit of momentum over Disney.
Specifically, for calendar 2022, the T.E.A. estimates that only one Walt Disney World theme park, Magic Kingdom, attracted more tourists than Universal’s Islands of Adventure.
Presuming you mostly trust the T.E.A.’s data – and I do – that’s a fact. Well, it’s a fact in a
technical sense depending on how you define attracting more tourists.
Statistically, Disney’s market share in the Orlando theme park market has fallen slightly, while Universal’s market share has increased.
What does that mean and how much does it matter? Therein lies the debate…
Why Some Believe Universal Is Gaining
This market share argument stems from a comparison between 2019 and 2023 attendance estimates.
According to the T.E.A., Walt Disney World’s four theme parks claimed an attendance of 58.8 million in 2019, the last year before the pandemic.
Meanwhile, Universal’s two theme parks managed 21.3 million, with SeaWorld Orlando at 4.6 million.
I’ll throw in Busch Gardens Tampa Bay, which hosted 4.2 million guests.
Overall, that’s 89 million guests visiting Florida’s primary theme parks in 2019.
Disney’s market share at the time was 66 percent, while Universal Studios held its own at 24 percent.
Most businesses would happily claim approximately one out of every four customers, especially in an oligopoly with a clear market leader.
Consider that Universal Studios’ Orlando resorts more than doubled the total attendance at SeaWorld and Busch Gardens. That’s pretty good, right?
However, Universal’s 21.3 million represents only 36 percent of Walt Disney World’s 58.8 million. So, a chasm existed before COVID-19 became a thing.
By 2022, the tide turned a bit, at least from a certain perspective.
During the first year of pandemic recovery, most parks failed to match 2019, which is completely understandable and expected.
However, Universal’s Islands of Adventure actually claimed its best attendance year ever, with 11 million as opposed to 10.4 million in 2019.
Universal Studios Florida with 10.8 million guests last year compared to 10.9 million in 2019.
Overall, these two parks have somehow increased their attendance from before the pandemic, which is terrific!
Meanwhile, Walt Disney World’s four parks hosted 47.1 million guests last year. So, Disney attendance has dropped 20 percent after the pandemic.
In terms of market share, 76.3 million people visited the same theme parks last year.
That raises Universal’s market share to 27 percent, while Disney’s drops to 62 percent.
How Much Does This Change Matter?
When Universal and Disney fans argue, here’s the inflection point.
Universal is unquestionably doing everything it can to host as many guests as possible.
Comcast, the corporate owner of NBCUniversal, has prioritized growth in this industry due to its large profit margin potential.
Disney has taken a different approach. The company has uncovered ways to monetize the same guests at a higher level.
Disney earns 40 percent more from the same customers than it did at the start of the pandemic…and probably even more.
Even with a 20 percent drop, the parks are earning more revenue than ever, which is true of Universal Studios as well.
The happiest people right now are the theme park fans who aren’t fiercely loyal to one brand over the other.
In reality, Universal and Disney are both doing exceedingly well in the aftermath of what easily could have been an extinction-level black swan for their industry.
Still, Universal loyalists are crowing about the fact that they’re closing the gap with Disney.
As a reminder, Disney still leads in market share by 35 points, which is eight points more than Universal’s total!
That’s how a monopoly looks in theory. One company controls more than half the business.
In the case of Disney theme parks, that’s not quite true worldwide, but it’s absolutely dominant overall.
Universal likely will close the gap more in 2025 when Epic Universe debuts.
That park probably gains five-to-seven million guests during its first year, depending on how early/late in 2025 it opens.
Realistically, we won’t be talking about Universal’s market share reaching even half of Disney’s until the 2026 T.E.A. data gets released…in 2027.
In other words, some folks are getting way ahead of themselves here.
Universal Studios is objectively performing brilliantly. Its recent success mostly underscores Disney’s overall sustained dominance, though.
Imagine performing like this for decades. That’s what Disney has done!
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