Feud in Florida
ORLANDO, Fla. — A weathered lighthouse marks the entry to Florida’s newest theme park, but just beyond, a fiercer icon looms: the Hulk Coaster, which blasts riders from 0 to 40 mph in two seconds before turning them upside-down in a zero-gravity loop.
Fans of Walt Disney Co.’s comfortable and inviting amusement parks might be taken aback by this collision of Marvel Comics and seaport exotica at the entrance to Islands of Adventure.
But Islands is no Disney park. And the towering green Hulk is surely no Disney ride.
This park is the edgier turf of Universal Studios Inc., and while it aims to get a slice of the multibillion-dollar family market that Disney owns, it will offer a decidedly un-Disney-like experience: an unabashed revelry in pop culture and thrills.
Universal first challenged Disney in Florida nine years ago when it opened an updated version of Universal Studios in Orlando.
Now, a continent away from the two companies’ headquarters and their original theme parks in Southern California, Universal is launching a second front in the battle to loosen Disney’s chokehold on central Florida’s $16-billion tourism business.
Islands of Adventure’s mix of red-hot coasters, cartoon heroes and villains, and other attractions stands a good chance of luring tourists away from Disney this year, analysts say.
The new park is part of a huge bet on music and recreation. by Seagram Co., Universal’s owner. If the wager pays off when Islands of Adventure opens late this month, it will be seen as setting new technical standards for theme parks, and Islands will become a major profit center.
If it doesn’t pay off, the new park will become another costly bust for Seagram, which is coming off two miserable years at the box office and a spate of asset sales, purchases and consolidations.
Whatever the result, it will not come cheap. In all, $2.6 billion is being spent by the Canadian liquor company, its bankers and its longtime Orlando partner, Britain’s Rank Group. The eye-popping price tag includes the new theme park; a CityWalk complex of nightclubs, restaurants and movie theaters; and the first three of five hotels being built in partnership with Loews Hotel Corp.
The entire complex is called Universal Studios Escape, to emphasize its status as a self-contained resort. The aim is to create a recreation “brand” to rival Disney’s--but one that is bolder and more appealing to teenagers and adults.
“As an adult at Disneyland, you’re having a good time by watching your children have a good time,” says Universal President Ron Meyer. “But from age 8 to 80 we become really the park of choice.”
He compares Universal Studios Escape to a ski trip: Different family members may take to different slopes, but everyone has fun.
The strategy is “wildly ambitious,” acknowledges Edgar Bronfman Jr., Seagram’s 42-year-old chief executive and heir to the family distilling fortune.
It’s a point not lost on observers of the theme park business. Given the huge start-up and operating costs, the financial consequences of disappointing attendance could be huge.
“They’ll need to hit a home run,” says Jill S. Krutick, a Salomon Smith Barney analyst.
Seagram Sees Movies as Theme Park Booster
Swinging for the fences is a tradition in Orlando’s booming visitor industry, beginning with Walt Disney’s on-the-sly purchase of land south of town for $183 an acre in the 1960s.
Disney bought up more than 42 square miles of cypress groves, cow pastures and swamps for about $5 million. The property yielded Disney about $1 billion in operating profit last year.
Eying figures like that, Seagram hopes to triple profit from its parks over the next few years. Besides the expansion in Florida, it is a partner in a $1.7-billion theme park being built in Osaka, Japan. And it recently bought a major stake in another park in Barcelona, Spain, with room to expand.
Bronfman, whose firm purchased Universal in 1995, said he’s still serious about the movie business. But much of its function will be to help legitimize his parks. Films based on Dudley Do-Right and Dr. Seuss’ Grinch will feed new attractions, much like rides at Universal’s California park that are based on blockbuster movies such as “Jurassic Park,” “Twister” and “Jaws.”
Bronfman’s other big bet, of course, is on music. His recent $10.4-billion purchase of PolyGram created the world’s largest record company. That emphasis takes center stage at the CityWalk mall between the two Florida parks, with attractions themed to Bob Marley, Jimmy Buffett, Thelonius Monk and Motown.
A live-performance venue is being added at the world’s largest Hard Rock Cafe, which is owned by Rank Group.
“You theoretically could have a concert there by [Universal artists] U2,” says PaineWebber Inc. analyst Christopher Dixon.
CityWalk will compete with the Downtown Disney entertainment complex, whose attractions include the nightclub zone Pleasure Island; a DisneyQuest “virtual theme park” packed with roller-coaster and white-water raft simulators, and the world’s largest Planet Hollywood.
All told, Disney has four Florida theme parks: Magic Kingdom, Epcot, Disney-MGM Studios and Animal Kingdom. Universal now has two: Universal Studios Florida and Islands of Adventure. Universal owns one water park; Disney has three.
The mismatch doesn’t end there. Disney also has four PGA-certified golf courses, 27 hotels, a 200-acre sports complex, a cruise line, 1,029 time-shares in Orlando and 274 elsewhere in Florida.
“We’re still tiny compared to them,” Bronfman says. “It’s David versus Goliath.”
Counting multi-day passes, Disney sold 41.7 million theme park tickets in Florida last year, compared with Universal’s 8.9 million, according to the trade publication Amusement Business.
But those numbers understate the imbalance. With its vast sprawl, hotels and other attractions, Disney has no peers in its main goal--making sure visitors spend no time or money away from its empire.
A couple with two young children will pay $1,844 for a six-night, seven-day package at the cheapest Disney hotels this summer, including unlimited access to the company’s parks and Downtown Disney nightclubs.
If they spend $150 a day on food and souvenirs, they’re out another $1,000 for the week--all easily accomplished without leaving Disney’s turf.
In the past, Universal responded mainly by trying to poach one-day admissions from Disney-sated parkgoers.
But that strategy has limited returns. At current ticket prices for the big Orlando parks--$42 for adults, $34 for kids--a family of four might spend just $300 on a day at a Universal park with food and souvenirs.
From Parking to Park in Under 12 Minutes
Universal hopes to make a virtue of its urban, 840-acre site, which is dwarfed by Disney’s 30,000 acres outside town. Disney has 150 buses to move guests around; Universal has none because it doesn’t need them.
Bronfman claims that getting from parking space to park will never take longer than 12 minutes. “It can take you 45 minutes to get from your car to the park at Walt Disney World,” he said.
Across a bridge from CityWalk, a familiar Universal globe marks the studio-themed park. Across another bridge, the Islands of Adventure lighthouse beckons. To the right, the lagoon leads off to the faux Italian fishing village of the Portofino Bay Hotel. More lodging, starting with a 1,000-room Hard Rock Hotel, will be added later on both sides of the parks.
The Islands of Adventure park also has a simple layout, with five “islands” around another lake. They include:
* Seuss Landing, with a “Cat in the Hat” ride and a Green Eggs and Ham Cafe.
* Lost Continent, featuring dragon coasters battling in the sky and gods beneath the sea.
* Jurassic Park, with ferocious dinosaurs along with some downright pettable ones.
* Toon Lagoon, featuring Popeye and Dudley Do-Right water rides and a 100-character Comic Strip Lane.
* Marvel Super Hero Island, where Hulk hangs out near Spider-Man and Dr. Doom attractions.
Universal executives say they tried to set new technical standards throughout the park. “We really didn’t just want to raise the bar,” said park designer Mark Woodbury. “We wanted to redefine the experience.”
The Spider-Man ride, for example, is billed as the first ever to combine a moving vehicle, live action and 3-D special effects. Such innovations aren’t limited to the theme park. In the hotels, sensors will alert maids if a room is occupied, so guests won’t have to endure intrusive knocks.
Universal Ad Blitz Will Top $60 Million
Hoping now to take a far bigger bite out of the tourist business, Universal is spending more than $60 million on print and TV ads for its new complex. That’s nearly double what Walt Disney World spent on advertising for all of 1998, according to Competitive Media, a New York company that tracks ad spending.
Another $100 million will be spent by Universal marketing partners such as Coca-Cola and Dodge. Think Spider-Man in a Caravan and you get the picture.
Experts have varied opinions about the campaign. Some think even more is needed to establish Universal as a brand that can compete with Disney. Others worry it’s already too costly.
Veteran entertainment analyst Harold Vogel says Universal has “out-Disneyed Disney” with its bold new park and believes that Disney will be forced to strike back with its own expensive promotional campaigns.
“The marketing battle will be so costly that they’ll depress profits at both parks--at least for a while,” Vogel said. “I suspect they may both be a little disappointed the first year out.”
Universal has also redoubled efforts to sell multi-day packages combining its two theme parks, the Wet ‘n Wild water-slide park it purchased recently, Anheuser-Busch’s Sea World and various local hotels.
A seven-day package with unlimited admissions to those attractions and stay at a Holiday Inn costs $1,270--nearly $600 less than the similar Disney package. Many other combinations are modest two- or three-day packages costing a few hundred dollars.
When Universal opens its first hotel this September, the luxury Portofino Bay Resort, a two-night, three-day package for four--including admission to both its parks--will cost $970.
“It’s cheaper to buy the Universal package and add on a couple of Disney parks,” said New Jersey travel agent Vinnie Amico, who expects many veteran Disney vacationers to build a trip around Universal in the coming year.
Universal’s addition of a second park, hotels and an entertainment mall in Florida is a larger-scale version of Disney’s expansion plans in Anaheim.
Disney’s California Adventure--at 55 acres and $1.4 billion about half the cost and size of Islands of Adventure--will open next to Disneyland in 2001 with a 750-room luxury hotel and a version of Downtown Disney.
‘We Just Want Them for 2 Days Instead of 1’
Orlando or Anaheim, Disney or Universal, the idea of the new complexes is the same: not to equal Walt Disney World, but to capture the time and wallets of visitors just a little longer.
“We just want them for two days instead of one,” said Universal’s Meyer. “The good news for us is that we don’t need a big piece of Disney. We just need a shave.”
Universal hopes to steal at least 2 million visitor days from competing Florida theme parks--a goal Disney executives privately concede is realistic.
It also hopes to cut into time tourists would otherwise spend outside a major theme park. Those attractions are as varied as Belz Factory Outlet World, a 170-store outlet mall; Cape Canaveral; and local institutions such as Gatorland, a reptile farm that draws visitors to a feeding frenzy known as the Gator Jumparoo Show.
But another sort of bite is feared: “cannibalization,” or attendance at the new park coming at the expense of the old.
Universal projects attendance of at least 6 million at the new park, and is hoping for 8 million. Executives say they are prepared for 20% of the total to come from declines at Universal Studios Florida, leaving the old park with 7 million annual visitors.
But Universal executives said Disney’s Animal Kingdom--a less ambitious park that opened last year for $850 million--also expected a cannibalization factor of 20%. Instead, they say, 40% of the guests came from Disney’s other parks, where attendance plunged. Disney officials wouldn’t disclose figures but said profits for the new park and all of Walt Disney World have met projections.
In anticipation of Universal’s new onslaught, Disney has beefed up attractions. Animal Kingdom has a new Asia section and 3-D movie based on “A Bug’s Life.” Test Track, an Epcot speed ride, is open after a year’s delay. The Magic Kingdom has added a “Toy Story”-themed ride. And a spectacular Cirque du Soleil venue has opened at Downtown Disney.
More major draws are coming soon: Rock ‘n’ Roller Coaster at Disney-MGM Studios, with a high-speed launch, multiple inversions and a trip through an “O” on the Hollywood sign, and what sounds like another Universal winner, a “Men in Black”-themed attraction.
Dixon, the PaineWebber analyst, said the additions by both companies should boost visits for the entire Orlando area--a view that Universal executives welcome.
“If Disney gets aggressive about marketing and we’re aggressive, we may wind up growing the market significantly,” said Cathy A. Nichols, head of Universal Studios Recreation Group.
Disney World President Al Weiss was circumspect in assessing the new Universal competition.
“We wish them every success,” Weiss said. “But right now we’re focused on the biggest year of growth in the history of Walt Disney World, and that has got us very, very busy.”
Sidney J. Sheinberg, pushed out as Universal’s president when Seagram bought the company, has accused Bronfman of bungling on many fronts, indeed, of ruining what Sheinberg helped build. But he still sounds excited about what’s happening in Orlando.
“When I left, if there was any part of MCA I missed it was being part of this theme park,” he said. “I’ve always taken a great deal of pride in taking on Disney, a formidable opponent, and being successful.
“And I think the elements are there at Islands of Adventure for a terrific park. I would bet on it.”
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TOTAL ACREAGE
* Disney: 30,500
* Universal: 2,640 (includes a nearby 1,800 acre site for future development)
THEME PARKS
* Disney: Magic Kingdom, EPCOT Center, Animal Kingdom, Disney-MGM Studios
* Universal: Universal Studios Florida and Islands of Adventure
1998 ESTIMATED ATTENDANCE
* Disney’s four Florida parks combined: 41.7 million
* Universal Studios Florida: 8.9 million
ADMISSION FOR FAMILY OF 4
Disney
* Seven-day package with unlimited access to its four theme parks, three water parks, and nightclub zone; lodging at economy Disney hotel: $1,844.
* Single-day admission at one park for a family of four: $152 (two adults and two children over three)
Note: Single-day admission prices are the same for all parks-- $42 adults, $34 for children three to nine, children three and under free.
Universal
* Seven-day package with unlimited admissions to two Universal theme parks, Wet N’ Wild water park and Sea World. Lodging at Holiday Inn: $1,270.
* One-day admission for family of four at Universal Studios Florida: $152 (two adults and two children over three)
Note: Single-day admission prices are $42 adults, $34 for children three to nine, children two and under free.
EMPLOYEES
Disney: 52,000
Universal: 9,800 (increasing to more than 28,000 when new park and hotels open)
HOTELS
* Disney: 27 at Walt Disney World, including 17 owned and operated by Disney.
* Universal: Portofino Bay Resort (opens in September); four more scheduled to open by 2005. Owned in partnership with Loew’s Hotels.
ENTERTAINMENT COMPLEXES
* Disney: Downtown Disney
* Universal: Universal CityWalk
WATER PARKS
* Disney: Blizzard Beach, Typhoon Lagoon and River Country
* Universal: Wet ‘n Wild
FILM PRODUCTION FACILITIES
Disney
* Disney-MGM Studios: A working film, television and radio production facility with two sound stages.
* Walt Disney Feature Animation Florida: Located within Disney-MGM Studios. “Mulan” animated feature produced here.
Universal
* Universal Studios Florida: Nine sound stages, 100 backlot locations.
* Nickelodeon Studios: Where Nickelodeon television network produces “Gullah Gullah Island”, “Allegra’s Window” and other popular children’s programs.
Graphics reporting by Janice Jones Dodds and E. Scott Reckard, Janice Jones Dodds / Los Angeles Times.
Sources: Walt Disney Co. Universal Studios, Amusement Business Magazine, Mickey’s Travel, Times reports.
It All Started in California:
Universal Studios Chronology
* 1915: Universal Studios builds spectator bleachers overlooking its two outdoor sound stages located on the north side of the Hollywood Hills. The public is charged 25 cents a head to watch silent movies being filmed, tour the back lot and enjoy a box lunch. The tour was discontinued with the advent of “talkies’ because it was too difficult to keep spectators quiet during filming.
* 1964: Universal reestablishes the studio tour. It’s facilities now include 14 sound stages, an office building, a hotel and the 6,000-seat Universal Studios Amphitheater. It’s back lot facility includes structures and props from popular television series and films.
* 1990: Universal Studios Florida opens to the public, hoping to cash in on the tourist influx generated by Disney.
* 1993: JAWS shark attraction opens at Universal Studios Florida
* 1996: Terminator 2 3-D attraction opens at Universal Studios Florida
* 1997: Universal files development plans saying that by 2010 it wants to build two more theme parks, 13,000 hotel rooms, two golf courses and a mixed commercial and entertainment district on 1,800 acres to be acquired from Lockheed Martin Corp. near its current 840 acres in Orlando.
* 1998: Twister attraction opens along with Universal Studios CityWalk in Florida; Universal acquires the 1,800 acres from Lockheed Martin for future development.
* 1999: Universal opens second park, Islands of Adventure and Portofino Bay Resort, the first of five planned hotels.
Disney Chronology
* 1955: Walt Disney opens Disneyland in Anaheim, later regrets cramped space and commercialization of surrounding area.
* 1959: Walt Disney begins studying the purchase of land in central Florida, 20 miles from downtown Orlando *1965: Disney completes acquisition of 28,000 acres in Florida for an average price of $183 an acre.
*1967: Florida legislature creates Reedy Creek Improvement District to develop Walt Disney World infrastructure; gives Disney total control of the land and exemption from local building codes, permits, zoning, environmental controls and impact fees.
* 1971: Disney opens first Florida theme park, Magic Kingdom.
* 1982: Disney opens second Florida theme park, EPCOT.
* 1984: Eisner-Frank Wells regime installed at Disney to ward off threatened takeover by corporate raiders.
* 1984: Universal Studios executives approach Eisner about teaming up to build a movie-themed park in Florida. Disney reveals that it already has a studio tour project in the works. Universal executives are enraged by the perceived encroachment on their movie-theme turf.
* 1989: Disney-MGM Studios opens. The movie-themed park is Disney’s third Florida park.
* 1990: Universal Studios Florida opens.
* 1993: Universal announces plans to add a second park, Islands of Adventure, in Florida, with a Jurassic Park-themed section and a CityWalk entertainment district beside it.
* 1995: Disney says it will build another Florida park, Animal Kingdom, with a Dinoland section and an entertainment district beside it.
* 1997: Disney opens Village Marketplace, an entertainment and shopping district, that is later renamed Downtown Disney.
* 1998: Disney opens fourth Florida park, Animal Kingdom.
* 1998: Disney Cruise Line launched after long construction delays.
Graphics reporting by E. Scott Reckard and Janice Jones Dodds/Los Angeles Times
Sources: Universal Studios; Walt Disney Co.; Times reports; “Building a Company-Roy O. Disney and the Creation of an Entertainment Empire”, by Bob Thomas; “Michael Eisner-Work in Progress”, by Michael D. Eisner and Tony Schwartz; “Walt Disney”, by Bob Thomas
