We last wrote about the slowdown at destination theme parks in mid-July after Universal reported softer Q2 2024 results and Disney warned of a slowdown. For the summer season, Disney and SeaWorld gained share of domestic visitation, whereas Universal lost share due to because of the softer economy, more difficult year-over-year comparisons, and a lack of new attractions. Universal Studios Hollywood saw visits decrease at twice the rate of Orlando. We’d expect all operators, especially Disney, to report better year-over-year results than the table shows due to an increase in international visitors. We also show a +150 basis point stronger result in visits due to higher frequency and a lengthening of the average stay. More time in the parks generally equates to more in-park spending. We think the increases reflect visitors trying to get more value out of their trip.
The decline at Universal Studios Hollywood was more pronounced at the start of the summer, with Monday and Tuesday being the weakest days of the week. (Back to the office anyone?)
As shown in the chart below, average stay was also down meaningfully (-10%), which contrasts to the increases we saw at the other parks. The combination of the decline in attendance and average stay will have resulted in a stark high teens decline in park revenue (from domestic visitors).
Universal Studios Hollywood being down more than Universal Studios Orlando likely reflects it being more of a drive-to park with a less affluent visitor mix. 61% of Universal Studios Hollywood’s visitors live within 250 miles of the park (per Placer Trade Area Coverage by Distance), while only 43% live within the same distance for Orlando. Applying Experian Mosaic customer segmentation data to the park trade areas shows that Florida has a third higher affluent visitor mix over Hollywood and only two-thirds of Hollywood’s exposure to lower-income consumers. However, looking at this summer vs last summer, there are large declines for all household segments. Flourishing Families (affluent, middle-aged families and couples earning prosperous incomes and living very comfortable lifestyles) experienced the steepest rate of decline. These folks may have been off on international vacations this year, or simply preferencing California’s beaches, which are free to visit. For example, Placer shows 7% more visitors to Manhattan Beach this summer compared to last year.
