00:00:03
We're going to invest
roughly $30 billion in the
00:00:06
United States to expand
Orlando and California.
00:00:10
This park is the most
technologically advanced
00:00:13
thing we've ever done,
and we've done some pretty
00:00:15
advanced things in our time.
00:00:16
Walt Disney World and
Universal Orlando Resort,
00:00:19
two of the biggest names in
theme parks, are about to
00:00:21
get even bigger.
00:00:22
We've got a lion's share of
that investment coming to
00:00:25
us.
00:00:25
At Walt Disney World. Plans
are already in the works,
00:00:27
with expansions and
facelifts being rolled out
00:00:29
across several of its parks,
00:00:31
including the largest
addition to Magic Kingdom in
00:00:33
the park's history.
00:00:34
This is a massive site and
we want to stay relevant,
00:00:38
stay current,
invest in our existing
00:00:40
assets, and make new
experiences as well.
00:00:43
Across town is Universal
Orlando,
00:00:45
the home of another iconic
castle.
00:00:50
Now it's opening Epic
Universe,
00:00:52
a fourth theme park that's
expected to double the size
00:00:54
of Universal's footprint in
Orlando.
00:00:59
It's so different than
anything else that we've
00:01:02
ever built, But certainly I
think it's different than
00:01:04
anyone's ever built.
00:01:05
A theme park. Universal
hopes will rival Disney
00:01:07
World, making it a full week
destination in itself.
00:01:10
I think you might be passing
Disney at this point,
00:01:12
Mark.
00:01:13
But as these two theme park
giants invest billions into
00:01:16
their Central Florida
properties,
00:01:17
a dark cloud is hanging over
Orlando.
00:01:19
Now, looming over the whole
industry is concern about a
00:01:22
potential decline in
consumer spending.
00:01:24
Economic and political
volatility has pulled on
00:01:27
consumer sentiment,
forcing travelers to forgo
00:01:29
US vacations in 2025.
00:01:32
The United States is
expected to lose $12.5
00:01:34
billion in international
travel,
00:01:36
spending, a 22% decline from
its peak in 2019.
00:01:41
That trend could cost the US
$21 billion in revenue if it
00:01:45
continues.
00:01:46
And Walt Disney World or
Universal Orlando escape a
00:01:50
broader, prolonged period of
consumer weakness that
00:01:53
results from tariffs.
00:01:55
No way.
00:01:55
So while Universal and
Disney's billion dollar bets
00:01:58
on theme parks pay off,
or will a tourism downturn
00:02:01
sour Orlando's epic summer?
00:02:13
You step in and you get to
see all your favorite
00:02:16
characters and all the
surrounding environment and
00:02:19
all the animated,
substantive entertainment
00:02:22
elements in it.
00:02:24
This spring, Universal
Orlando opened the gates to
00:02:26
Epic Universe,
costing an estimated $7
00:02:29
billion. Epic Universe is
Comcast's biggest theme park
00:02:31
investment to date. It also
marks the first theme park
00:02:34
opening in the US and more
than two decades.
00:02:37
Comcast is the parent
company of CNBC.
00:02:40
When you walk in and you
step through Peach's castle
00:02:43
and you're standing in Super
Nintendo World,
00:02:45
you feel like you've been
dropped into the game.
00:02:48
Universal's flagship resort
welcomes around 20 million
00:02:50
visitors annually,
a number hoping to boost
00:02:52
during Epic's inaugural
summer.
00:02:56
Epic universe includes five
brand new themed worlds that
00:02:59
combine a wide variety of
new and existing IP for the
00:03:02
park. How to Train Your
Dragon two.
00:03:03
Isle of Berk. The Wizarding
world of Harry Potter's
00:03:06
Ministry of Magic Celestial
Park.
00:03:08
Super Nintendo World and a
throwback to classic monster
00:03:10
movies with Dark Universe.
00:03:12
One of the most amazing
attractions I'd say that
00:03:14
we've ever built is in that
world.
00:03:16
It's called Monsters
Unchained.
00:03:18
Well, only 7% of Comcast
overall revenue theme parks
00:03:21
brought in $8.6 billion in
2024,
00:03:23
and an additional $1.8
billion in Q1 2025.
00:03:28
That makes Epic's edition a
clear growth opportunity for
00:03:30
the segment.
00:03:31
A reasonable estimate of
revenue for epic is about $2
00:03:35
billion on an annualized
basis,
00:03:37
with about a 30 to 35%
profit margin.
00:03:40
Both Disney and Universal's
parent company,
00:03:42
Comcast, saw their share
prices peak in 2021,
00:03:45
as the post-Covid tourism
wave saw pent up travel
00:03:47
demand spilling into theme
parks.
00:03:49
For both companies. The
theme park segments are
00:03:51
consistent performers,
offsetting volatility in
00:03:53
areas like film and linear
TV.
00:03:55
Industry insiders are
telling me that the media
00:03:58
giant's parks divisions are
more important than ever.
00:04:01
A larger part of Comcast
once it spins off Versant,
00:04:04
which includes CNBC,
and almost 60% of Disney's
00:04:07
operating income comes from
its parks division.
00:04:10
At a time of transition and
uncertainty for its linear
00:04:13
and film divisions.
00:04:14
For universal,
though, it still has a long
00:04:16
way to go to catch up with
Disney World's roughly 50
00:04:18
million annual park goers.
00:04:20
But for its part,
universal is looking to go
00:04:22
after another segment of
tourists thrill seekers.
00:04:25
The Disney product is more
geared towards families and
00:04:31
nostalgia, and Universal
Park is more geared towards
00:04:35
teenagers, young adults and
contemporary culture.
00:04:39
Beyond the addition of epic,
universal is also building
00:04:41
out its hotel footprint in
and around Orlando to 11,000
00:04:45
rooms.
00:04:45
We now have 11 hotels and
they're all very different,
00:04:48
all really designed to cater
not just thematically,
00:04:52
but to different people's
budgets.
00:04:54
Comparatively, Disney World
Resort's portfolio is more
00:04:56
than double that 29,000
rooms and more than 25 hotel
00:04:59
options. Still,
universal is hoping the
00:05:01
addition of epic will take
Universal Orlando from a 2
00:05:04
to 3 day destination to a
full week experience.
00:05:07
You will not be able to
enjoy everything that it is
00:05:09
we have to offer without
being here for for 4 or 5
00:05:12
days. You really need it
all.
00:05:14
While all eyes might be on
Epic Universe this summer,
00:05:16
Walt Disney World has some
epic or should I say magical
00:05:18
plans of its own. I'm
standing on Main Street USA
00:05:27
and Walt Disney World's
Magic Kingdom.
00:05:29
Every single day,
tens of thousands of
00:05:31
visitors come down the
street towards that castle,
00:05:34
culminating in 17 million
visitors annually.
00:05:37
Welcome dancers,
welcome.
00:05:39
Riding rides,
taking pictures, eating
00:05:41
pretzels, buying Mickey ears
and staying at Disney
00:05:43
Resorts.
00:05:44
We talk about the Disney
bubble.
00:05:46
Without that,
we wouldn't be able to have
00:05:48
that value proposition.
00:05:49
Now, with $30 billion being
infused into its US parks,
00:05:53
Disney World has already
rolled out plans for some
00:05:55
major expansions and
additions.
00:06:00
One of the places you'll see
these changes is right
00:06:02
behind me. Rivers of America
and the Space Beyond is
00:06:05
going to be home to one of
Magic Kingdom's largest
00:06:08
expansions to date a brand
new car themed area and
00:06:12
Villains Land.
00:06:13
We're taking villains that
we know and love from their
00:06:16
stories, but we have this
chance to create a new place
00:06:19
for them, a new environment
that has not necessarily
00:06:22
been seen.
00:06:24
Disney's Hollywood Studios
will also be welcoming a new
00:06:26
expansion with Monstropolis.
00:06:27
Other projects are already
in the works.
00:06:29
Hidden behind this green
wall is the future site of
00:06:31
Tropical Americas,
a new addition to Disney's
00:06:33
Animal Kingdom,
opening in 2027.
00:06:36
We're leaning heavily into
the Maya culture.
00:06:38
To put in perspective how
big that $30 billion
00:06:40
investment is. In 2018,
Disney opened Pandora The
00:06:42
World of Avatar and Animal
Kingdom,
00:06:44
an immersive world that cost
an estimated $500 million to
00:06:47
build. Featuring what was at
its opening the most
00:06:50
advanced animatronic in
Disney Parks history.
00:06:52
Over in Disney's Hollywood
Studios, it's Star Wars
00:06:54
Galaxy's Edge. Opened in
2019.
00:06:56
The entire 14 acre expansion
cost Disney a reported $1
00:07:00
billion.
00:07:00
You have incredibly advanced
figures like the shaman on
00:07:03
Na'vi River, or you've got
something more nimble,
00:07:06
like droids that can circle
the globe very quickly.
00:07:09
And rest assured that as we
think about the investments
00:07:11
that we're making in
tropical Americas and cars
00:07:14
and villains in the future.
00:07:16
All of that and more is
being incorporated into the
00:07:18
thinking of what we'll be
able to bring to life for
00:07:20
our guests in 2024.
00:07:22
Disney's theme park segment
raked in a record revenue of
00:07:24
more than $34 billion,
a 5% climb from the year
00:07:28
prior.
00:07:29
Disney really is a theme
park company that also makes
00:07:32
films and television,
so it's about two thirds of
00:07:35
the company's operating
profits are coming from
00:07:39
experiences.
00:07:40
On top of its announced $30
billion investment last
00:07:42
year, the Central Florida
Tourism Oversight District
00:07:45
approved a historic deal
with Walt Disney World.
00:07:48
Remember Disney's political
back and forth with Governor
00:07:50
Ron DeSantis? Well,
it quietly came to a close
00:07:53
last year. Afterwards,
Disney and the board came to
00:07:56
a new agreement where Disney
would invest up to $17
00:07:59
billion over the next 10 to
20 years.
00:08:02
For its part,
Disney got approval for
00:08:03
several expansions if it
wishes to do so.
00:08:06
In the agreement,
Disney World got a green
00:08:08
light to grow its maximum
hotel capacity from around
00:08:11
40,000 to more than 53,000
8000 rooms.
00:08:14
A serious expansion from its
current hotel capacity of
00:08:16
29,000. Still,
Disney World has yet to
00:08:19
announce any such plans.
00:08:21
If you think about a hotel
company with 29,000 rooms
00:08:23
now that we've grown to and
we really,
00:08:26
after 54 years,
continue to raise the bar.
00:08:29
The tariff uncertainty could
put pressure on Disney
00:08:31
World's construction plans.
00:08:33
Most of the rides,
the big heavy duty equipment
00:08:37
in the theme parks are
manufactured outside of the
00:08:39
United States and shipped
here.
00:08:41
There's certainly a chance
for impact from tariffs
00:08:45
that's measured in the
billions.
00:08:47
A lot of the construction
costs of a theme park is
00:08:50
labor, and that would be
only indirectly exposed to
00:08:54
tariffs.
00:08:55
It possibly would raise the
construction cost,
00:08:59
the amount of investment
needed.
00:09:01
Probably the burden will
come back to the consumer.
00:09:04
Meaning your theme park
vacation could end up
00:09:05
costing you the consumer
more in the coming years.
00:09:08
Vacations that are already
pretty pricey.
00:09:11
The price hikes at parks was
enormous over the last few
00:09:14
years. Same for some of the
food,
00:09:16
you know, just every,
every time they could they
00:09:18
would either make packages
smaller, higher priced,
00:09:20
whatever. If that consumer
is just pushing back on
00:09:23
that.
00:09:23
The great thing about a
great business is you can
00:09:26
increase your prices because
there just aren't sufficient
00:09:29
substitutes for what you
sell.
00:09:30
And that's certainly true of
Disney World.
00:09:33
And so while Disney World
revenues above its 2019
00:09:38
pre-pandemic high watermark,
00:09:39
Disney World attendance
isn't.
00:09:42
But the real villain or
monster in the story could
00:09:44
be something that's out of
Disney and Universal's
00:09:46
control. Tariffs.
00:09:54
Economic uncertainty.
Recession fears.
00:09:56
Inflation. Political
volatility.
00:09:58
Lots of us go on vacation to
avoid thinking about
00:10:00
headlines like these.
Unfortunately,
00:10:02
they may now be.
00:10:08
Crashing their way into your
vacation.
00:10:09
In really harsh downturns
like the financial crisis of
00:10:14
2008. And then,
of course, Covid.
00:10:17
Orlando has been terribly
cyclical.
00:10:20
Revenue in Orlando declined
by a double digit
00:10:24
percentage. Peak to trough
during the financial crisis
00:10:27
and much more during Covid.
00:10:29
Early bellwethers for the
travel industry, US airlines
00:10:32
and hotel chains are raising
alarms around softening
00:10:34
consumer demand. As of April
2025,
00:10:36
US airline ticket sales are
down almost 4% compared to
00:10:39
last year.
00:10:40
At the end of the day,
travel is consumer
00:10:42
discretionary spend,
and when people see capital
00:10:44
market volatility,
trade uncertainty,
00:10:47
they tend to pull back in
discretionary areas like
00:10:49
travel. And we do think
that's happening right now.
00:10:51
Hotel chains Marriott and
Hilton have all lowered the
00:10:54
revenue outlook. Expedia and
Airbnb both cited softening
00:10:57
demand in recent quarters.
00:10:58
This says consumer
confidence took a hit in
00:11:00
early 2025 on fears of
tariff driven inflation.
00:11:03
If you're uncertain how the
economy is going to develop,
00:11:06
then you're going to try to
be more cautious in your
00:11:10
spending so that that is
something that that is being
00:11:14
seen as well.
00:11:15
A recent Bank of America
report found travel demand
00:11:17
in the first half of the
year fell sharply in several
00:11:19
states. Hospitality
dependent cities like Las
00:11:21
Vegas are already showing
cracks, with multiple casino
00:11:23
layoffs being attributed to
a downturn in international
00:11:26
tourist, a demographic that
spends on average eight
00:11:28
times more than domestic
travelers.
00:11:30
International tourists make
up 8 to 9% of Orlando's
00:11:33
annual visitors.
00:11:34
6.4 million international
visitors that come to our
00:11:38
area.
00:11:38
They stay longer and they
spend more money.
00:11:41
It could have an effect,
a negative effect on our
00:11:46
local GDP.
00:11:48
But if we revisit that Bank
of America chart, we see
00:11:50
Florida actually saw an
increase in tourism in early
00:11:52
2025.
00:11:53
The opening of epic this
year,
00:11:56
together with what is going
on,
00:11:58
it's a countering effect on
the overall.
00:12:00
Many of the people,
both internationally and
00:12:03
domestically, that are
already planning their
00:12:05
vacations for this summer.
00:12:07
Not only is Epic's opening
helping bring money into
00:12:09
Orlando, but it could be the
thing that helps the city
00:12:11
survive a broader consumer
pullback.
00:12:13
Hotel and vacation home
bookings climbed as much as
00:12:15
14% in the Orlando area
around the time of Epic's
00:12:18
opening.
00:12:19
So far in 2025.
00:12:21
The numbers are
extraordinary.
00:12:24
We believe that those
numbers will continue.
00:12:26
I know people who are like,
whatever happens,
00:12:28
they still need and want to
go to the theme parks.
00:12:36
When it comes to this
multibillion dollar battle
00:12:39
between these two theme park
giants,
00:12:41
analysts believe Epic
Universe is opening isn't
00:12:43
just a tailwind for
universal,
00:12:44
but also a big driver for
visitors into Disney World.
00:12:47
Disney's parks chairman Josh
D'amaro,
00:12:49
is bullish, saying,
quote, if something is built
00:12:52
new in Central Florida like
Epic Universe,
00:12:54
that new tourists coming
into the market is going to
00:12:56
have to visit the Magic
Kingdom.
00:12:58
The numbers speak for
themselves because epic is
00:13:02
having an amazing opening as
far as ticket sales and
00:13:07
driving that demand.
00:13:08
You look at Disney and
SeaWorld and they're seeing
00:13:12
incredible numbers already
in this year.
00:13:14
Disney said that their
forward bookings for the
00:13:18
prime months of the theme
park season are up mid
00:13:23
single digit percent against
last year.
00:13:25
So will these historic theme
park investments pay off?
00:13:28
Well, when it comes to
Disney's $30 billion in
00:13:30
expansions.
00:13:31
In the long run,
it almost certainly will.
00:13:33
We have objective financial
evidence that historically
00:13:37
very large, you know,
tens of billions of dollars
00:13:40
scale investments have paid
off for epic.
00:13:43
However, Universal's newest
addition might take a little
00:13:45
more time to turn a profit.
00:13:46
Comcast will require years
of growth and price
00:13:50
increases to drive epic
towards a really robust
00:13:55
financial return that meets
the level of the more
00:13:59
seasoned portfolios at
Universal and Disney.
00:14:02
We build these parks and
these assets for a very long
00:14:06
future, and we're not in it
for a short term.
