The Universal Orlando Resort confirmed another round of layoffs today, one day after reporting a 94 percent revenue loss in the previous quarter.
The parks have reopened during the pandemic, but crowds remain slow to return, with daily attendance consistently below their lower-capacity limits. Universal laid off an undisclosed number of team members last month, making this the second round of dismissals since the Orlando parks reopened in early June.
"We have again made the difficult decision to reduce our workforce to reflect current priorities and needs. As always, we are aware of the impact this will have on those affected by this decision and their families," a Universal spokesperson said in an email provided in response to press inquiries.
"We are prioritizing daily operations and shorter-term projects and continuing our pause on longer-term projects, such as Epic Universe, as we allow the tourism industry to recover."
In its second-quarter financial results presentation yesterday, NBCUniversal CEO Jeff Shell reiterated that the company has paused development on the planned third theme park for the Universal Orlando, which company, state and local officials announced one year ago tomorrow. Epic Universe has been in development south of the current Universal Orlando property, just north of the Orange County Convention Center.
Fans have been speculating whether NBCUniversal parent Comcast would cancel the Epic Universe project, given its cost (estimated in the billions of dollars) and the uncertainty of a return in the current tourism environment.
No matter what ultimately happens to the project, Universal's Epic Universe - in the form announced one year ago - is dead. That's because the market for which Universal designed it no longer exists. The trouble is that no one - at Universal or any other theme park or attraction business - knows what will replace it.
I know that many readers, fans, and people covering the industry have been questioning whether the Orlando-area theme parks should be open now, given the continuing spread of Covid-19 - especially in Florida, which has the third-most number of cases per capita among the United States and the second-most number of cases overall. Ultimately, the public will answer that question if the state does not step in to close the parks. And so far, the public's answer seems to be trending toward "not now."
That's frustrating for Orlando-area park leadership and employees, who - frankly - have established the nation's best health and safety standards for people going outside their homes. Universal and Disney went beyond the vague and too-often inconsistent advice to "wear a mask" and instead provided detailed instruction on what that meant.
Want to get into Disney or Universal now, you'd better be wearing a double-layered, solid cloth covering that loops over the ears or ties around the head, and that covers the nose, month, and chin. Masks can come off only while people are safely physically distant from one another, either in a designated rest area or while seated or standing still to eat and drink. Combined with physical distancing in queues, on rides, in shops, and at shows and character meets, Universal and Disney have taken a familiar leadership position in showing how crowds can be accommodated safely in even the most trying environments. Earlier this week, Orange County health officials reported that they had traced no cases to an infection that happened inside the parks.
But that track record isn't moving fans to book trips. Now parks must lay off employees, reduce operating hours, close locations within the parks and leave hotels empty in response.
This isn't the public's fault. Despite all the efforts made by Disney and Universal, the safest place for people remains their own homes. By staying home now, millions of theme park fans believe that they're doing the right thing to get this industry back on its feet as quickly as possible, because staying home offers the best way that the public can help subdue this virus most rapidly.
But what happens next? What happens when a vaccine or containment strategy finally ends this threat? How many fans will be able to afford theme park vacations like they did in 2019? Will people be eager or reluctant to be in the big crowds for which a park such as Epic Universe was designed to accommodate? Will the lingering health damage of Covid infections disable enough of the populace that Universal and other attraction designers must reconsider the physical requirements they create for rides and shows?
Universal would be foolish to keep spending to build a billion-dollar theme park it designed to open in 2023 based upon what it knew about the market in 2019. Yes, fans want a Super Nintendo World in the Orlando market. They probably would love to visit lands based upon "How to Train Your Dragon," "Fantastic Beasts" from The Wizarding World of Harry Potter, and Universal's classic monsters, too. Universal should now trash any of the designs that it has created for Epic Universe, and it won't.
But until Universal has a clearer vision for what a post-pandemic market is able to support, it can't responsibly go to investors and ask their blessing to continue with capital spending at the level that a project such as Epic Universe demands.
When Universal's spokesperson talks about "allow[ing] the tourism industry to recover," it's not in the sense of getting back to 2019. This pandemic has had too much effect upon the world for that to happen. It's about getting the industry back to some stable equilibrium, from which business leaders can begin again to make accurate forecasts that allow them to justify major capital investment again.
I hope that Universal someday soon builds new lands based upon the themes it planned for Epic Universe. I hope that it builds a new theme park on its planned South Campus. I hope that Universal calls that park Epic Universe and that it opens in 2014 or as soon after as possible.
Yeah, I'm an optimistic theme park fan. I believe that other fans will continue to pay for world-class, immersive, out-of-home entertainment as soon as it's safe to leave home again. But until parks can be certain of that, expect to see more layoffs, more delays, closures, and even more cancelations in the industry's immediate future.
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