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The tide has turned for Universal

Image: Terri Hodges, Flickr (license)

After spurning Disney, which asked for near-total control of her intellectual property, author J.K. Rowling agreed to terms with Universal for complete theme park rights to her Harry Potter series. The company would build, to Rowling’s demanding specifications, an immersive themed-land designed to transport guests into the world of her novels. Nothing would be built that Rowling didn’t personally sign off on – and if she didn’t love it, she didn’t sign off.

In 2010, The Wizarding World of Harry Potter opened, and at long last, Universal hit that home run it had been looking for. Sure, it took them 20 years, but that really only made it sweeter for them.

Seemingly overnight, Universal went from an afterthought in the Florida landscape to a destination. Not only were they successful, they were something they hadn’t been in a long time: Hip. People wanted to visit, not just because the Harry Potter experience was incredible, but also because they wanted to tell their friends they had been there too. The Wizarding World of Harry Potter wasn’t just magical while you were visiting it – the magic came in sharing the memories of your visit with everyone else.

Photos of Hogwarts Castle, magic wands, and butterbeer made their rounds online, and soon enough, Universal had the must-see property in tourism. It was a smash success.

Image: Sam Howzit, Flickr (license)

 

The Wizarding World of Harry Potter was a runaway hit for the company, and its success spurred them on to build an expansion based on Diagon Alley, a half-dozen new rides at the original Universal Studios Florida park, new resorts and shops, and, in the future, a brand new water park. Harry Potter completely revitalized Universal Orlando, and gave it a way forward from the land of mediocrity. Even with the opening of Diagon Alley, Universal has shown a more confident swagger – they know they can deliver amazing things. And that confidence is infectious.

There are a few reasons why Universal’s Harry Potter strategy paid off – and, frankly, they aren’t all Universal’s doing. On the one hand, yes, buying the rights to one of the hottest intellectual properties from this century is a good way of going about things and, yes, their magnificent execution of that property has kept the turnstiles turning. However, Disney’s inertia in the 21st century is as much of a cause for Universal’s sudden resurgence as the Wizarding World of Harry Potter.

Image: Anna Fox, Flickr (license)

Between 2007 and 2014, Walt Disney World was largely an unchanged property. Instead of making large-scale capital investments in the resort – something akin to the Disney Decade, or even what Universal was doing in that time period – Disney focused its efforts on rehabs and refurbs. That focus led to CEO Bob Iger’s famous insinuation in 2012 that Disney would not be planning any large-scale capital expenses in the near future, once its New Fantasyland expansion was complete. That admission gave Universal a window in which to strike, and strike they did. Now more than ever, guests are splitting their stays between Disney and Universal, and it’s largely happening because Disney phoned it in for a few years. If there’s one thing we’ve learned, it’s that stagnation leads to more competition in Central Florida – and Disney can’t be thrilled that they’ve let it happen.

Disney is firing back; Has Universal woken the sleeping giant?

Image: Disney

However, as you likely know (since you’re reading this article), that all changed at this year’s D23 Expo. It seems at some point in the last year, Disney got some data that has caused it to rethink that “no more capital investments” plan. How do we know this? Well, D23 featured announcements of not just one, but two enormous themed lands coming to Walt Disney World in the future: Star Wars Land and Toy Story Land. The Star Wars development, specifically, will be the largest single area they’ve ever built in a park. That’s … quite something.

Add to that the long-term projects Disney had already been very, very slowly working on – Pandora, the World of Avatar and Disney Springs – and suddenly, it seems as though the sleeping giant has been awoken. Those two lands are still likely 5 years away at best, so maybe the giant is still fighting its way out of bed, but the point is: Disney is aware of Universal. And, the rumblings are that they may not just stop with these two projects.

Image: Disney

And so, the question for Universal is this: Have they pulled the ripcord too soon? Did they scare Disney into action too quickly, preventing them from stealing more of Disney’s precious market share before Disney answered back?

Assuming their new waterpark, Volcano Bay, is a wonderful success, they’ll have really only one or two years at best to build their loyal following before they’ll face the steep challenge that only Star Wars can provide. And if anyone knows how to tie together corporate entities, it’s Disney – the company that turned Marvel Studios into one of the biggest forces in cinematic history. If their Star Wars rollout (beginning this December with Episode VII: The Force Awakens) is anything like their creation of the Marvel Cinematic Universe, they’ll be rolling in dough in no time.

Image: Disney

Disney has grown infamously slow in building their new projects, with Disney Springs and The World of Avatar seemingly taking until the heat death of the universe to complete. However, Universal would be unwise to assume that because Disney has been slow recently, it will continue to be slow in the future. They’ve seen first-hand how quickly Disney can act when it wants to, and they’d be well-served to act faster. They know Star Wars is coming – so they have to move now.

How? And what is it they should do? Well, if you’ve made it this far, you know the answer to that question: It’s time to build a third park. That’s the only way to adequately respond to the looming Star Wars threat while still keeping their flexibility for the future.

“But,” you might be saying, “How can they do that? Aren’t they out of land? Where would they put a third park?” Well, yes, they are sort of out of land. However, that might not be the case for long.

Where Universal could build a third gate

Image: Universal

In 1998, Universal bought Wet and Wild Orlando. At the time it seemed like a canny move to help diversify its entertainment portfolio in Florida and offer Universal guests a water park experience to rival those over at Walt Disney World. Around the same time, they also purchased 2,000 acres of land from nearby Lockheed Martin with the intention of developing their property into a Walt Disney World-style resort.

However, in 2003, they were forced to sell off nearly all of that land due to the stagnating economy – a move they regret to this day.

Much of that land has been developed by hotels, shopping centers, chain restaurants and the like – but there is a decent amount of it still left, particularly the areas closer to the Orange County Convention Center. Presumably, Universal could buy some of that land back and simply offer connecting shuttle transportation between the two resort enclaves. It may not be elegant, but it’s not like all of Walt Disney World’s parks are within walking distance of each other. Add to that the possibility of buying out some of the businesses on that land, and it’s not outside the realm of possibility that Universal could cobble together the land for a park. It’d be expensive, sure, but as anyone who pays their cable bill knows, Comcast has deep pockets.

Image: Kelly Spencer, Flickr (license)

And, clearly, the desire to move into this area south of I-4 is there. In 2013, Universal did something curious: They bought the land right out from underneath Wet and Wild. What makes that especially curious is that two years later, Universal announced that Wet and Wild would be closing.

So, here’s the question: Why did Universal buy that land, only to close the park two years later? Did they really not know at the time that they’d be building their own water park? Or that they’d even be considering building their own water park? Perhaps, but rumors of Universal’s interest in building a new water park have been swirling since 2011. The more likely scenario is that Universal bought that land because they intend to use it – just not for Wet and Wild.

Could this possibly be where the third park might go? Well, maybe – but it sounds unlikely.

Dewayne Bevil of The Orlando Sentinel has speculated that this property could be used primarily for new hotel development. He says Universal is hoping to triple the number of hotel rooms in its inventory in the coming years. So, if that turns out to be true, the purchase of that land probably isn’t the third-park confirmation we’ve been hoping to see. And, frankly, that’s somewhat disappointing conside-

Wait, wait, wait a minute. Hang on.

Why would Universal need to triple its hotel inventory? Where would all those extra people go?

Ohhhhhhhhhhhhhhhh.

 
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Comments

In reply to by Charles (not verified)

They can't build a Marvel park. Disney bought the rights to Marvel.

In reply to by Charles (not verified)

Due to the contract they have with Disney over the Marvel properties, they aren't allowed to do that. Disney can't use Marvel in its Orlando parks at all right now, but Universal can't expand on what they already have because the properties are no longer theirs to work with.

WDW and Universal may be rivals, but I love going to both the Disney theme parks and the Universal theme parks. A third Universal theme park would be exciting; I just hope it doesn't raise the price of annual passes too much!

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