Florida theme parks - recession indicator

May 17, 2023, 10:10 AM

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.

Replies (24)

May 17, 2023, 12:44 PM

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.

May 17, 2023, 12:55 PM

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.

Edited: May 17, 2023, 1:48 PM

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.

May 17, 2023, 2:17 PM

@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.

May 17, 2023, 5:01 PM

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.

May 18, 2023, 1:07 AM

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.

May 18, 2023, 5:50 AM

@AJ I would add 6. Theme parks just aren't considered cool (interesting) anymore.

May 18, 2023, 1:23 PM

We are all waiting for Epic Universal to Open....

May 18, 2023, 2:43 PM

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.

May 19, 2023, 12:23 PM

#4 stopped us from going to UO in September.

May 21, 2023, 7:48 AM

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.

May 30, 2023, 6:13 PM

I don't know if anybody feels this way, but I've been having a major case of the "mehs" recently when it comes to theme park visits. The last visit to Disney was a major disappointment, and it is hard to justify the expenditure when you can have as much or more fun just relaxing at a major resort and come back from your vacation feeling refreshed.

But on the upside, like Chad and Brian, I'm looking forward to Epic Universe in 2025.

May 31, 2023, 10:10 AM

By the sounds of it, 2024 will be the time to visit Orlando ..... everybody is holding off until 2025 :)

Being a local, it's been amazing to watch an actual theme park be constructed from ground up.

Just gotta figure a way to be there on opening day now ..

June 1, 2023, 2:11 PM

@Makorider - I think you're right anyone that lives within driving distance of Orlando will see a big decline in 2024. We normally go twice a year and typically never miss HHN except for COVID obviously but so far we've agreed to skip 2024 all together to focus on 2025. Anyone planning to go in 2025 should start saving now so you can buy express / VIP tours cause I'm sure it will be needed!

June 2, 2023, 9:26 AM

As a follow up on this thread even through the holiday weekend all of the parks in Orlando were still very slow, and even into June they still seem slower than normal. I would expect some grim earning reports coming from Disney/Universal/Sea World in October.

I know its cliche but "dry powder" is definitely on my mind for 2023/2024, not just theme parks but the economy overall. While inflation has come down its still twice what the FED wants it to be, in my opinion the people who are expecting interest rate cuts are delusional. Why would they cut rates right now with the job market still really strong and inflation still going twice the target...doesn't make sense. I think these economic factors are going to slow Orlando's business down at least for the next year and possibly longer.

The cheap 4 day tickets and bringing back the dining plan will definitely prop up attendance, however.

June 2, 2023, 10:29 AM

It will definitely be an interesting summer to watch. Experts are still predicting massive travel demand this summer, so it's curious to see the typical destinations like WDW/DL less crowded than usual. Anecdotally, I will note that our school system made some major changes to the calendar that is only giving students a 9-week summer break (instead of 10), and personally while having more travel planned this summer than the previous 5 years, our destinations are to smaller markets like Kansas City and Seattle (and San Francisco).

I'm not sure if the prevailing trend this summer will be away from the typical tourist destinations, or whether the shear mass of people traveling will offset a higher percentage of tourists bypassing Orlando and LA, but it certainly seems as though the FL parks might not see the same level of demand that they enjoyed last summer. The real question will be whether that will extend further into 2024, or this will just be a blip in an otherwise stead rise back to normalcy.

June 2, 2023, 4:02 PM

RM: "Experts are still predicting massive travel demand this summer, so it's curious to see the typical destinations like WDW/DL less crowded than usual."

Me: Or USF/IOA, yes.

Edited: June 6, 2023, 10:51 AM

Question is how much the reduced numbers at the Parks is down to economics and how much is down to the experience itself.
When we used to visit on regular basis we could Park Hop and easily access free Fast Passes for those popular rides and it worked. Just walking around the Parks taking in the atmosphere was generally relaxed and enjoyable. Now it seems that everyone is hyper. I know things are being relaxed with regard to booking your entry to a Disney Park but I ask, who's going to book an exepnsive trip to Florida with the prospect of not getting into their Park of choice or riding what they want to ride without booking in advance. Often early in the morning with no guarantee of success.
Most visitors appear to walk around with their eyes fixed on their phones frantically trying to reserve and pay for a lightning lane or even some food.
These things put paying customers off. The way the Parks are being run isn't condusive to the wonderful experiences we were used to 20 years ago. Yes I know times past blah blah.
I don't blame Disney you understand. The lockdown hit them hard and they had to find a way to recoup their losses.
So it's a dilemma. Should they increase charges or attract more people ?
My belief has always been that getting more people in at a lower price and offering them every benefit possible is a better business model than overcharging the hell out a reduced crowd. The former almost always increases revenue. Disney always represented good value when you consider what they offered you. Now it's become a less happy place and the numbers, particularly those outside the local areas or overseas , might fall sharply. They might not want to commit to something that can't be guaranteed. We are all suffering financially. Not just big businesses.
I hope that Disney succeeds because I want them to be there for generations to come.
Build it and they will come............

June 6, 2023, 11:37 AM

Its not just Disney having a slow spring/summer, its UO and SWO as well.

June 7, 2023, 9:25 AM

Rob P: "I hope that Disney succeeds because I want them to be there for generations to come."

Me: I hope Disney succeeds too. Because if Disney succeeds, so will Universal, Sea World and so many other Central Florida attractions.

June 7, 2023, 1:45 PM

Every time someone goes "things would be better without Disney," I reply "you think all these other parks would step up the game for big attractions without Disney to inspire?

June 7, 2023, 4:07 PM

I definitely want all of the Central Florida parks to have a profitable season, but something seems to be missing in the theme park experience for me. Maybe having a fun day at the park got too complicated.

Edited: June 10, 2023, 12:57 PM

I have to agree with you Tim. There's too much emphasis on having everything pre-planned days, weeks, months in advance. There will be many out there who won't have ever known the joy of spontaneity that we had in the past.
I understand the reasons for the changes post-lockdown but it would be nice to see the green shoots of a return to those, as you rightly say, less complicated

June 12, 2023, 12:51 PM

Something to consider: The Florida parks' efforts to become year-round destinations have resulted in summer no longer being the "busy" season for WDW/UOR.

So I don't think that judging Disney and Universal by summer bookings gives an accurate picture of either their financial health or the health of the broader tourism economy.

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