DISNEY LAUNCHES CAMPAIGN TO CURE TOURISM SLUMP HOPES PINNED ON MISSION: SPACE THE COMPANY IS BETTING ON THE SUCCESS OF THE $100 MILLION RIDE AND OTHER NEW FEATURES TO BOOST ITS THEME-PARK FORTUNES.
Richard Verrier, Sentinel Staff Writer
7 October 2003
Orlando Sentinel
Walt Disney Co. is counting on a big lift from Mission: Space, the $100 million ride whose grand opening this week is part of a larger campaign to promote Disney's signature resort in Orlando.
The entertainment giant hopes the latest Epcot attraction, along with other new features at the Central Florida parks, will help it recover from a tourism slump that has hobbled the company's overall earnings -- and the fortunes of an industry.
"We're not sitting back and waiting for the water level to rise and raise the ship," Jay Rasulo, president of Walt Disney Parks and Resorts, said in a recent interview. "I don't expect a giant rebound, and we're not planning for that . . . but we are aggressively seizing the moment in any way we can."
That's the message Rasulo will convey today in a conference call with Wall Street analysts, who have been invited to view the new ride and other offerings at Walt Disney World as part of an overview of the company's theme-park strategy.
The official launching of Mission, which had a soft opening in August, will involve Disney's first-ever national television-advertising campaign of a single attraction. The opening comes as Disney and others are investing millions again in new attractions and marketing approaches in the hopes of spurring a recovery of a business that employs more than 65,000 in Central Florida and thousands more around the globe.
Although business has picked up this summer, major theme-park resorts are still weathering the effects of what insiders have come to describe as the "perfect storm" -- an extraordinary confluence of economic slowdown, lingering security concerns after the Sept. 11, 2001, terrorist attacks and the Iraq war, not to mention high gas prices.
3 TRENDS TO FACE
Compounding the industry's woes are three long-term trends that pose new challenges to those in the business, industry analysts and veteran executives say.
For one thing, the industry has shown signs of reaching a peak in the United States. About 315 million people visit theme parks each year in the United States -- an average of more than one visit per person -- leaving little room for growth. By contrast, only one in three Europeans visits a theme park each year.
"It's the most saturated theme-park market in the world," said Tim O'Brien, editor of trade publication Amusement Business. "Now it's going to start separating the men from the boys out there."
In addition, the industry faces increasing competition for entertainment dollars. On top of that are troubling demographic shifts on the horizon.
There are currently 80.5 million people in the 25- to 44-year-old age group that represents a key demographic for the theme-park industry. That group is expected to shrink by 2.4 percent during the next five years. During the same time period, the 45- to 64-year-old category is estimated to grow 14 percent.
"The growth rate is not going to be what it was in the past because the theme-park market is shrinking in size," said Jim Cammisa, publisher of Travel Industry Indicators, a Miami-based travel-industry newsletter.
Some point the blame inward, saying that the major operators have recently focused too much on the bottom line at the expense of investing in major new attractions year after year to keep visitors coming back.
"I don't think the industry's woes are 100 percent 9-11 and the economy," said Ron Bension, former chairman and CEO of the Universal Studios' theme-park group. "Fifty percent of it is self-inflicted wounds."
NOVEL MARKETING
Industry executives say they are moving decisively to stimulate business through major new attractions, heavy promotions and fresh marketing approaches.
For its part, Disney this week launches a national TV-advertising campaign called "Magical Gatherings" that assists friends and families in planning reunions and group vacations at Walt Disney World. Disney is expected to offer a similar service at Disneyland.
"Nobody really owns this market; we want to be the first," said Linda Warren, executive vice president of marketing for Walt Disney World Resort.
Beyond Mission: Space, Disney this week also will tout a new 3-D film, Mickey's PhilharMagic, and the December opening of the first phase of Pop Century Resort, a new hotel that will have 2,880 rooms in its first phase.
And at California Adventure in Anaheim, which has struggled to meet its business projections, Disney is building the Twilight Zone Tower of Terror, a $75 million thrill ride that the company hopes will attract new visitors.
"I don't have a pessimistic view of the industry," said Rasulo, who was recently appointed to head a panel that will advise U.S. Commerce Secretary Don Evans on ways to draw more foreign tourists to the country.
"I think there are continued opportunities for those who are ready to evolve," Rasulo said.
HEAVY INVESTMENT
Disney's chief rival, Vivendi Universal's Universal Studios, also has been heavily squeezed by the industry downturn and is similarly investing heavily in new rides and shows.
Those include Revenge of the Mummy, a $40 million ride scheduled to open at its Universal Studios Florida and Universal Studios Hollywood in the spring. The money going into Revenge of the Mummy comes on top of more than $60 million that Universal has invested this year in attractions related to the animated hit movies Shrek and Jimmy Neutron: Boy Genius.
"I don't get the sense that the market has gone stale," said Wyman Roberts, chief marketing officer of Universal Parks and Resorts. "It's very difficult to say when we'll be totally healthy again, but we like the way the country is moving."
In Florida, Universal has stepped up its national advertising of Universal Orlando as a resort destination while promoting Universal Hollywood more heavily to the locals.
SMALL PARKS BENEFIT
In contrast to the big destination resorts operated by Disney and Universal, smaller regional parks that rely on day tourists have fared far better.
The SeaWorld parks in Orlando and San Diego (owned by Anheuser Busch) and Knott's Berry Farm in Buena Park, Calif., (owned by Cedar Fair Ltd.) have gotten a bounce from a recent trend that has seen people taking shorter vacations and staying closer to home.
"We see kind of a mixed bag," said Fred Jacobs, spokesman for Busch Entertainment Corp, some of whose holdings such as Busch Gardens in Tampa have been squeezed. "We've done about as well as can be expected this year."
SeaWorld San Diego also hopes to get a boost next year with the opening of a new roller-coaster ride, Journey to Atlantis.
Responding to demographic changes, Busch recently entered into a partnership with the AARP to promote its theme parks.
Cammisa, the publisher of Travel Industry Indicators, applauds such moves. To stay competitive, theme parks must continue to adapt their products with more emphasis on amenities geared to an aging population, he says.
"When one's core market is shrinking in size, changes in strategy are required."
AI
