Until recently, the words “Universal Studios” were looked at as something akin to blasphemy amongst the hardcore Disney faithful. Sure, it was a nice diversion, but there was nothing that the upstart neighbors on I-4 could offer that would outclass the mighty mouse. And, for a long time, even the Universal apologists (of whom I’d call myself a member) had to agree: The service was better at Disney, the attractions were better at Disney, and there was simply more to do at Disney.
In 2015, however, the calculus is different. While Disney is still the old standard, Universal has become an ultra-trendy competitor, attracting teenagers and young adults with its immersive thrills inspired by franchises like Harry Potter, Transformers, and soon, King Kong (again), and the Fast and the Furious. Universal isn’t seen as a diversion anymore – but rather, it has quickly become a must-do destination that truly rivals Walt Disney World. The team members are far more helpful than they used to be, and the resort offers some of the best attractions on the planet – two factors that have clearly helped Universal steal precious vacation days away from the Central Florida mainstay.
Image: Universal
The question is no longer whether or not Universal is stealing market share from Disney – it very clearly is – but rather, the question is how far they can go with it.
The closing of Disaster at Universal Studios Florida – a refurbished version of the opening day attraction, Earthquake – brings to mind an interesting quandary for Universal. Now, following its closure, there are only two opening day attractions left in operation at Universal Studios Florida: E.T. Adventure and the Horror Make Up Show. Compare that to the Magic Kingdom’s 13 or so (not counting experiences like the Dapper Dans and Frontierland Shooting Gallery), and it’s hard to see Universal having that same generational hold on guests that Disney currently enjoys. Universal has spent a lot of money redeveloping its attractions over the years out of necessity – now that they have largely a pretty good slate to work with, it will become ever-tougher to pick and choose what must stay and what must go when it’s time to build a new attraction. This is where the benefit of size that Walt Disney talked about so many years ago has really aided Disney.
Image: Robert Linsdell, Flickr (license)
And so, Universal has reached a point where it has to make a decision of what it wants to be: A Disneyland-style park that puts immersion and freshness ahead of variety and volume, or a Walt Disney World-style resort that caters to every vacation whim and encourages week-long stays.
Every indication is that Universal desperately wants its Orlando resort to be the latter, which can mean only one thing: It’s time to build a third theme park. We’ve discussed reasons why it might be difficult for the company to do this before, but with Disney announcing the development of its Star Wars land, it seems more and more likely that we’re just counting down the days until Universal makes an announcement on this scale.
So, buckle up and let’s take a look at why Universal Orlando needs a third park, how they might go about building it, and what it may look like when all is said and done.
Universal has always been about beating Disney
Image: Sam Howzit, Flickr (license)
Before we get into this third gate business, it’s important to look back at the history of Universal Orlando. It has always measured itself against Walt Disney World, and it shouldn’t be surprising that this competitive nature has baked itself into the resort’s DNA. When Disney does something, it’s important for Universal to answer back – even though the reverse is not always true.
It used to be true, however.
Back in the early 1980s, Walt Disney World was humming along nicely, opening its grand Epcot Center in 1982 and revolutionizing the Central Florida tourism market. Clearly, it wouldn’t be long before someone else jumped into the fray to give Disney some competition, and sure enough, it would be Disney’s old California rival Universal in 1986.
That year, the company announced its plan to build an East Coast version of its iconic Hollywood park. The plan not only called for full-scale adaptations of some of the most popular features from its famous Tram Tour, but it would also be a working studio – complete with the home base for the wildly popular Nickelodeon Studios.
Coincidentally, Disney announced its own plans for a movie-themed theme park / production studio hybrid around the same time – and, the proverbial race was on. Because Walt Disney World acts largely free from governmental control due to its own special municipality, the company was able to have its new park up very, very quickly: Disney-MGM Studios opened in 1989 – one year before Universal Studios Orlando.
Image: Matt Wade, Flickr (license)
While Universal had its fans in the early years, it never quite caught on in the way the company hoped. Its effect on Disney’s bottom line wasn’t quite as dramatic as they might have projected, and investment in the property quickly stagnated. Meanwhile, Disney was embarking on its most dramatic era of construction in its history: the Disney Decade. By 1999, Disney had opened dozens of hotels, sports complexes, a water park, an overhauled shopping area, and a fourth theme park. Universal had opened only two attractions that are still in operation today.
And so, near the apex of the Disney Decade, the company decided to take another big swing at the mouse, overhauling its entire resort. They built a nightlife complex, two luxury hotels, and a second theme park – all of which finally opened in 1999. Everything they built was well-received, but still didn’t cause Disney any pause. Islands of Adventure, which is about as beautiful a theme park as you’ll find anywhere, was critically adored but largely ignored by the vacationing public. Again, Universal remained a day-trip diversion – something that maybe you’d seek out on your third or fourth visit to the area. It hadn’t yet cemented itself as a destination in the same way as Disney.
Image: Lawrence Rayner, Flickr (license)
With Universal’s grand swing not really affecting them, and with the economy slowing down in 2001, Disney essentially declared victory in Central Florida. The cranes mostly went away, the feverish construction stopped, and things pretty much stood pat on their property for nearly the next decade.
But then, in 2007, Universal took one final shot. After changing corporate hands several times and nearly running out of money, this was pretty much it for Universal: Connect and deliver, or whiff and decline. Universal has always been about competing with Disney, but now, they desperately needed a win.
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.
The third gate is coming, and here’s what we know
Image: Universal
Even if we don’t know where, exactly, it might go, the signs are certainly pointing to a third park being in Universal’s future – and not just in our collective imaginations. Back in 2014, with Harry Potter still the hot word on everyone’s lips, Universal gave guests a survey asking them what other intellectual properties they’d be interested in seeing come to the parks in the form of a themed land. A couple of the options on that survey stick out: the Fast and the Furious and “Super Mario.” A year down the line, we now know that Universal is bringing a Fast and the Furious-themed attraction to Orlando, and we also know that they’ve partnered with Nintendo for some sort of forthcoming attraction experience, possibly on the scale of a themed land.
And so, knowing that Universal was indeed taking these ideas seriously, some of the other options on that survey are quite intriguing. Six of the options are related to literary franchises: James Bond, Sherlock Holmes, The Lord of the Rings, Willy Wonka and the Chocolate Factory, and Twilight. Others are clearly sci-fi related: Battlestar Galactica, Tron, and Star Trek. Others are obviously children-oriented: SpongeBob Squarepants, Ice Age, Looney Toons, Scooby Doo, and Dora the Explorer. And others are already living happily in Universal: Jurassic Park, Spider Man, Terminator, Transformers, and Shrek.
Image: Loren Javier, Flickr (license)
What this tells us is that if Universal were thinking of building a new park, they’d probably look to one of these overarching themes to connect it together: Literature, Science-fiction, or kid-friendly. Each of those three options would fill a need for Universal thematically while still providing flexibility moving forward – with sci-fi and kid-friendly parks seeming like the best bet.
Think about it: One of the biggest complaints about Universal is that it lacks family-friendly attraction options, or that it is a park geared too largely toward teenagers and young adults. Building a park that appeals largely to young children would help fill that need – one which has largely been absent since the closure of the Nickelodeon Studios over a decade ago.
Additionally, one way of offsetting the forthcoming Star Wars wave – or even capturing some of it – would be to build an entire park dedicated to sci-fi. Tron, owned by Disney, probably wouldn’t make an appearance, but Battlestar Galactica and Star Trek (and maybe even Lord of the Rings) would certainly provide a worthy competition. And, the theme is expansive enough to allow for further development, relocation of IP from the other parks (like Terminator) and, possibly, an additional location for Halloween Horror Nights.
Image: Paramount
Now, all the caveats apply here – this is just speculation and, of course, all of this could cost a tremendous amount of money. Nevertheless, what has been made abundantly clear in the last 5 years is that Universal does not shy away from spending money when it is the right decision. And, in that same time period, they have been unequivocally beating the pants off Disney. Disney is still number one, yes, but until Star Wars comes to town, that title will be under threat. The third park is coming – land is procurable and ideas are cheap. The only question, really, is when. And only Universal knows the answer to that.
So, let’s say they do announce a third park. What then?
If Universal announces a third park, all hell will break lose in Central Florida. For a decade, Disney has operated under the assumption that Universal cannot pose a meaningful challenge to its tourism supremacy. Even now, Disney’s response of Star Wars and Toy Story are measured and precise. The reason they feel comfortable doing this is that they have unparalleled brand loyalty and an immense variety of offerings for their guests. Universal is great, but it’s still not the kind of place you could spend a week – and for those vacationers, Disney will always come first. But if Universal builds a third park, that feeling of security evaporates.
The capital outlay for a third park would be so big – from land acquisition costs, to construction, to R&D, to operation – it would show Disney that Universal is not constrained by anything. And that amount of money and energy is scary to a company that has built its business around keeping guests on its property. They know, if Universal has a third theme park, more guests are going to choose to stay with Universal, making Disney the day-trip destination. Add to that the increased sense of distance between Disney’s most passionate fans and the company due to the recent increase in prices for annual passes, and you have a real opportunity for Universal to grab a big chunk of Disney’s market.
Image: Disney
So, what happens then? What might Disney do? Well, there are preliminary overtures for a fifth gate at Walt Disney World, but that seems premature. Instead, Disney would be wise to invest in something Universal could never replicate, and something which has already proven to be a success for the company: Epcot. A full overhaul of Epcot would no doubt be cheaper than building a new park, and it would thrill Disney fans into keeping their precious vacation days with the mouse.
But, if you want some hope for a fifth Disney park, think of it this way: Disney increased the prices of its annual passes because, it says, capacity has been an issue in its Florida parks. Considering the relatively small percentage of visitors to the resort that actually have an annual pass, this price increase seems more like a temporary solution — and is there a better way to increase capacity than opening another theme park? No, there’s not.
The next decade in Central Florida should be pretty exciting no matter what, but if Universal does what it’s starting to feel like they’ll do, the next ten years have the potential to be really special. The iconic attraction at Walt Disney World says, “There’s a great big beautiful tomorrow” – who’d have thought that’d largely be because of Universal?
