Wendy
09-03-2009, 10:51 AM
Attendance, sales and profits all slid at Universal Orlando in 2008, the company reported this week, with the two-park resort squeezed by a worsening recession even as it spent more money on new attractions.
Combined attendance at Universal Studios Florida and Islands of Adventure sank 1.9 percent in 2008, falling to 10.6 million from 10.8 million a year ago.
Universal did not offer any specifics about how its parks are faring so far in 2009 in what has become the most challenging economic climate in at least a generation. But the resort has implemented widespread cost cuts since January, temporarily closing some attractions, reducing hours at others and laying off employees.
Universal, like Walt Disney World and SeaWorld Orlando, also has been forced to roll out steep discounts on tickets and hotel rooms in order to continue luring reluctant consumers.
“Our business is strong, yet all of us know we are operating in an increasingly challenging economic environment,” Universal Orlando President and Chief Operating Officer Bill Davis said in a written statement.
Total revenue slipped 1 percent for the year to $923 million. Operating profits fell 5.8 percent to $180 million.
The resort blamed the wider profit drop in part on increased spending on new attractions. Universal is building the Hollywood Rip, Ride, Rockit roller coaster, which is scheduled to open at Universal Studios this spring; and the Wizarding World of Harry Potter, which will open sometime next year in Islands of Adventure.
Universal had projected it would spend $150 million on capital projects in 2008up from $95 million in 2007.
The results released Friday, which were issued in advance of a more-detailed regulatory filing expected later this month, did not break out Universal’s performance during the fourth quarter, when economic conditions rapidly deteriorated. Attendance at Disney World, for instance, fell 5 percent between October and December, after climbing through the first nine months of the year.
But it is clear Universal also was hit particularly hard during the period.
Universal’s attendance through the first nine months of the year was down just 1 percent from the same period in 2007, compared with the 2 percent drop the resort reported for the full year. Revenues through the first three quarters of the year were still running slightly ahead of the previous year’s pace, before turning negative near the end of 2008.
Industry experts say conditions have continued to worsen for Orlando’s theme parks in the new year.
“As far as the theme parks and attendance go, I think it’s really just starting now to hit,” said Ady Milman, a professor at the University of Central Florida’s Rosen College of Hospitality Management and coordinator of the college’s theme-park specialty track. “All in all, 2008 was probably not so bad. But the key issue, and we don’t really know, is how 2009 is going to be.”
In January, the resort laid off about 70 of its roughly 13,000 employees. Other workers have had their hours cut.
Combined attendance at Universal Studios Florida and Islands of Adventure sank 1.9 percent in 2008, falling to 10.6 million from 10.8 million a year ago.
Universal did not offer any specifics about how its parks are faring so far in 2009 in what has become the most challenging economic climate in at least a generation. But the resort has implemented widespread cost cuts since January, temporarily closing some attractions, reducing hours at others and laying off employees.
Universal, like Walt Disney World and SeaWorld Orlando, also has been forced to roll out steep discounts on tickets and hotel rooms in order to continue luring reluctant consumers.
“Our business is strong, yet all of us know we are operating in an increasingly challenging economic environment,” Universal Orlando President and Chief Operating Officer Bill Davis said in a written statement.
Total revenue slipped 1 percent for the year to $923 million. Operating profits fell 5.8 percent to $180 million.
The resort blamed the wider profit drop in part on increased spending on new attractions. Universal is building the Hollywood Rip, Ride, Rockit roller coaster, which is scheduled to open at Universal Studios this spring; and the Wizarding World of Harry Potter, which will open sometime next year in Islands of Adventure.
Universal had projected it would spend $150 million on capital projects in 2008up from $95 million in 2007.
The results released Friday, which were issued in advance of a more-detailed regulatory filing expected later this month, did not break out Universal’s performance during the fourth quarter, when economic conditions rapidly deteriorated. Attendance at Disney World, for instance, fell 5 percent between October and December, after climbing through the first nine months of the year.
But it is clear Universal also was hit particularly hard during the period.
Universal’s attendance through the first nine months of the year was down just 1 percent from the same period in 2007, compared with the 2 percent drop the resort reported for the full year. Revenues through the first three quarters of the year were still running slightly ahead of the previous year’s pace, before turning negative near the end of 2008.
Industry experts say conditions have continued to worsen for Orlando’s theme parks in the new year.
“As far as the theme parks and attendance go, I think it’s really just starting now to hit,” said Ady Milman, a professor at the University of Central Florida’s Rosen College of Hospitality Management and coordinator of the college’s theme-park specialty track. “All in all, 2008 was probably not so bad. But the key issue, and we don’t really know, is how 2009 is going to be.”
In January, the resort laid off about 70 of its roughly 13,000 employees. Other workers have had their hours cut.