Despite Slump, Universal Sees Promise for Theme Parks
THE theme park business looks promising in the months ahead, despite the economic downturn, according to Jay Stein, chairman and chief executive officer of MCA Recreation Services Group, a subsidiary of MCA Inc., the giant entertainment company.According to Mr. Stein, over 3 million visitors passed through the turnstiles at MCA's Universal Studios Florida in Orlando during the first half of 1991. Stein estimates that some 6 million people will have visited the park by the end of the year. Stein is generally considered the driving force behind Universal's Florida site - the person who almost single-handily conceived of the park, and oversaw its development. Universal Studios Florida is a $630 million joint venture between MCA Inc. and the London-based Rank Organisation PLC. Late last year, MCA was acquired by Matsushita, a Japanese consumer electronics company. The improvement in attendance at Universal's Florida site comes at a time when the theme park business in general has been hurt by the economic downturn. The Walt Disney Company recently noted that it was facing its first decline in earnings since 1984, in part because of soft attendance at Disney theme parks and resorts. Paul Marsh, a stock analyst for Kemper Securities Group Inc., notes that Universal Studios Florida has not hurt Disney's Florida attendance, since many visitors "overlap" and visit both parks. Universal does not break out detailed financial figures on its theme parks, since such data are generally included within MCA's financial sheets, according to Stein. However, Stein says that not only are more visitors coming to MCA's Orlando site, but that the Florida park will prove highly profitable over time. In fact, the park "will make a profit this year," he says. Universal is currently seeking to expand its Florida attractions; for example, it recently opened a new $40 million ride, based on the "Back to the Future" films. Stein concedes that Universal has had to overcome "very severe" comments about its opening last year, when many rides either did not work, or worked only part of the time. But Stein insists that the mechanical problems, which he says were unfortunate, have been corrected and that a polling of visitors shows current strong public satisfaction. Is the theme park business peaking? Stein says that there may be some slowing of attendance in the United States - in part related to underlying economic difficulties - but that business has "not even begun to peak in other countries." Asia, Latin America, and Europe remain potential areas for expansion in new theme parks, he says.