I live in Orlando and can report the attendance at the theme parks has been atrocious the past few months. I know there is usually a lag between Spring break and Memorial day, but I haven't seen the parks consistently this dead since pre-Harry Potter (not counting 2020). And it's not just Disney, its Universal, Sea World, and Busch Gardens as well. And the parks are forecasting a bad summer you can tell with the deals that are coming out now like the Disney 4 park deal that is way discounted from the normal rate.
I think this is an indicator that the economy is finally starting to slow down and headed for a recession later this year and 2024. While I certainly don't think everything is going to fall apart like in 2008, there has been talk for years now that once the covid money dries up, interest rates go up, and inflation settles there will be a period of stagflation and then finally a recession. It will be interesting to see what happens when Disney, Universal, and Sea World report at their next earnings calls.Tweet
All of the travel experts are predicting a really buy summer travel season with most people who held off travel over the past 2+ years due to the pandemic finally willing to hop on a plane. However, it does seem like much of the demand is for overseas travel and more out-of-the-way domestic destinations.
I do think unending price increases are finally starting to catch up with the big destination parks, and we'll see if they are able to quickly pivot if projections of a slower summer season really do come to fruition. People do have a lot of desire to travel, but want to do so on a tighter budget. If theme parks are unable to adapt to this shift in mindset, they could be in for a long year.
RM: "I do think unending price increases are finally starting to catch up with the big destination parks ..."
Me: I might've offer up a similar question that would've read "I wonder if theme park admission prices have topped out." But potato, potato I suppose. What concerns me is the long term effect a recession and the political actions may have on future theme park development. Walt Disney World only has the core of EPCOT's re-imagined Future World to complete. It hasn't already broken the eggs to make and mega-omelets. Universal Orlando, on the other hand, will likely need to sustain its admission prices to cover construction costs associated with Universal Epic Universe -- costs measured in billions of dollars.
Related: Epic Universe's subcontractors are starting to feel the pinch associated with Governor Ron DeSantis' crackdown on undocumented workers. Even established subcontractors turn to second tier companies to provide them with qualified labor. Those smaller second tier models rely on undocumented immigrant workers to keep their costs competitive. If those workers feel the need to leave Florida, the Universal project could see a real labor shortage that would have an impact on production and costs.
@TH - While I agree that subs are likely going to feel a pinch retaining qualified labor to complete projects associated with Epic Universe, I don't see how that would impact Universal/Comcast. There are probably some finishing projects that have not yet been awarded, but those are likely to require highly skilled/artistic labor that would not be significantly impacted by punitive immigration policies.
I would be shocked if there were any major construction/installation contracts to award, and what has been awarded is almost certainly on a firm fixed price or T&M w/cap terms that would protect Universal/Comcast from any increases in subcontracted labor costs. Unless trusted and contracted firms start walking away from EU, I don't think there would be a major impact on the cost and/or delivery timeline - unless of course Universal/Comcast lawyers and contracting officers are incompetent.
If there is a scope of work that requires twenty guys to complete by this Friday, and a subcontractor can only find six guys qualified to do the work ... Well that scope ain't gonna get done by Friday -- I don't care how many emails your Comcast lawyers write.
It's just silly to offer up rationalizations that accommodate a belief that looking ahead the labor shortage (exacerbated by the DeSantis legislation) won't have an impact on a construction project like UEU.
An impending recession is likely part of it, but in the specific case of Florida I think there's a few more factors at play...
1. All the big attractions have now opened, and there doesn't look to be anything noteworthy for the next couple years. Unless someone was holding out for Tron, there's a good chance they took their post-pandemic trip in the summer 2022-spring 2023 period, and at this point most who aren't Disney-exclusive travelers and don't visit frequently are probably considering delaying until Epic Universe opens.
2. A Florida theme park vacation has become quite pricey, and reviews from post-pandemic travels have not been quite as enthusiastic as in the past. As a result, those who have already gone in 2020-2022 are probably less likely to go again, and those who were on the fence may be rethinking their plans.
3. Super Nintendo World opening at Universal Studios Hollywood may be drawing some to opt for California this year instead, especially if Nintendo is a large draw. I don't think that's as big of an influence as points 1 and 2, but I'm sure it has some degree of impact.
4. The political climate in Florida is most certainly causing some to opt out of visiting the state. I don't think it's as big of a factor is it's made out to be in some online communities, but it definitely isn't a nonfactor.
5. This is probably a reach and would only apply to Disney fans, but the Splash Mountain closure could have resulted in a small percentage boycotting Disney and potentially opting out of Florida as a whole.
I've long thought that the growth experienced post-pandemic was more likely parabolic than linear. My guess is that we're right at the peak of the parabola, so 2023 will probably have less growth than the past couple years before a drop in 2024. Will there be a gain again in 2025? Unless Epic Universe gets delayed, I'd be shocked if there wasn't.
@AJ I would add 6. Theme parks just aren't considered cool (interesting) anymore.
We are all waiting for Epic Universal to Open....
Compare that to California which still seems to do well. My family are die-hard WDW fans but we agree if it was a choice we'd go for Disneyland over Orlando for right now.
#4 stopped us from going to UO in September.
I would generally agree with your list AJ, particularly re Epic Universe. Once that date was announced I know my wife and I decided to put of a return to Florida until it was open. The Political Situation, its on my radar, but its a long way from the point where I'd pull the pin and say we're not going, but I can anticipate it being a reason not to go.
The State of Californian parks is a a bit too far to be a factor for a UK visitor, as is Splash Mountain.
Starting to see Disneyworld Florida advertised about as much, or maybe more than Disneyland Paris now.
Not hoping for a recession or anything but hopefully this means the HHN deal comes back! Wouldn't mind going for 2 nights instead of cramming it in one night like last year.