Lisa Rittmeyer
When is comes to winter or the summer, many people go on vacation. One place that many people enjoy traveling to is Universal Studios. Universal Studios is a huge theme park owned by Comcast Corporation. It is the second largest company in the United States with an annual revenue of 3.3 billion US dollars.
In the first quarter of 2018, Universal Studios’ earnings increased about 25%, to 495 million US dollars. Because of the new attractions being continuously implemented, the company has higher per capita spending. Since the economy is improving, consumers can spend their income on elastic goods or services, like Universal Studios.
By adding more attractions, Universal Studios receives more revenue because they meet the consumers’ tastes in demand and the supply in demand. By meeting the consumers’ tastes in demand, the company sometimes replaces an attraction to extend an attraction that is more popular throughout the country. One example of attractions being replaced with others was the extension of the Harry Potter section in Orlando, Florida. In July of 2014, Universal replaced the Jaws section with Diagon Alley.
Universal makes most of their revenue from their Harry Potter attraction. They continuously upgrade and update this section of the park because they want to implement more rides, merchandise stores, and restaurants to appeal a vast majority of their consumers. An example of how their Harry Potter attraction increases the revenue was in the second quarter in 2017, in Hollywood, California, there was a 60% increase in attendance of this attraction.
Depending on how popular the attractions are in each year, determines the price of the tickets. When more consumers attend, the price of the tickets increases and the amount of tickets increase, while when less consumers attend, the price of the tickets decreases. To keep up with the supply in demand, Universal continues to implement new rides and attractions to make consumers more willing to pay high prices for tickets. One attraction that will gain more profit is the new Fast and Furious: Supercharged; which will be implemented sometime this year in Orlando, Florida. Because the Fast and Furious is such a popular franchise, more customers will want to visit the Fast and Furious section.
There are many hotels and restaurants nearby the theme parks, which improves the economy. In Hollywood, California, these nearby businesses have provided around 2,600 jobs in 2016. Due to all of the job creations, people who are currently experiencing frictional, structural, and seasonal unemployment can be hired to continue to produce income. As time goes on, more hotels and restaurants are being constructed because Universal continues to become more and more popular each year. Between the rides, merchandise, and the food; inflation increases because tourists continue to spend lots of money while at Universal. By continuously meeting their consumer expectations, Universal continues to remain as one of the best theme parks known in the United States. Universal Studios is a rare, expensive, treat that most middle-class citizens usually experience at least once in a lifetime.
Works Cited:
Brigate, Ricky. “From Jaws to Diagon Alley – Tributes to the classic Universal Orlando ride hide in new Harry Potter land”. Inside the Magic, 23 Jun. 2014, https://insidethemagic.net/2014/06/from-jaws-to-diagon-alley-tributes-to-the-classic-universal-orlando-ride-hide-in-new-harry-potter-land/.
Holmes, Jamie. “Universal Studios Adding Major new Attractions to its Orlando Theme Park”. WFTV9: ABC, 11 Apr. 2018, https://www.wftv.com/news/local/universal-studios-adding-major-new-attractions-to-its-orlando-theme-park/730208844.
Kondolojy, Amanda. “The 6 New Attractions Coming Soon to Universal Orlando Resort
”. Theme Park Tourist, 28 Sep, 2017, https://www.themeparktourist.com/news/20170928/33242/7-new-rides-coming-universal-orlando-resort-5-years.
Martin, Hugo. “Big investments in Potter world and other attractions will pay off for the Southland economy”. Los Angeles Times, 10 Apr. 2016, http://www.latimes.com/business/la-fi-theme-park-economy-20160410-story.html.
“North American Box Office Revenue of Universal from 2000 to 2017 (in million U.S. dollars)”. The Statistics Portal, 2017, https://www.statista.com/statistics/187335/box-office-revenue-of-universal-in-north-america-since-2000/.
“Parks - Statistics & Facts: Amusement & Theme Parks”. The Statistics Portal, 2017, https://www.statista.com/topics/1525/parks/.
Pedicini, Sandra. “Universal Parks and Resorts' Theme-park Revenue Increases”. Orlando Sentinel, 27 Apr. 2017, http://www.orlandosentinel.com/business/os-comcast-earnings-20170426-story.html.
Russon, Gabrielle. “Universal: Theme Park Revenue Grows 15 percent”. Orlando Sentinel, 25 Apr, 2018, http://www.orlandosentinel.com/business/tourism/os-comcast-universal-earnings-2018-story.html.
Universal Studios has been a large attraction site for families going on vacation, just like Disney. With the new attractions being built and additions being made, Universal Studios should be more popular within the next few years. Adding to the Harry Potter ride will definitely attract and bring more people towards Florida, adding up the revenue for Universal Studios as well. By having restaurants, merchandise, and more, Universal Studios will continue to improve and add more attractions to bring more people in to increase their revenue.
ReplyDeleteI find it interesting that Harry Potter is still the reason for all the popularity. With so many new movies and things coming out you would think that Unviersal would make newer attractions rather than just add on. Especially because you'd think that Harry Potter will die down, as less and less kids will start to know what it is. Also with the rising prices to enter the parks, I think that less people will be able to afford to spend their money on tickets, however that must not be the case.
ReplyDeleteAs a huge fan of Universal Studios, I can certainly attest to their outstanding ability to appeal to consumer preferences. Every time I travel to Orlando I am amazed by the new attractions that have been added; in particular, it was incredible to see the expansion of the Harry Potter World to both sides of the park. In addition to the two sides of the theme park, hotels, and restaurants, Universal Studios Orlando recently added a waterpark called Volcano Bay that will certainly attract even more youth and create more revenue. In addition, it would be interesting to compare the growth of Universal Studios with that of Disney World or Disneyland, and see if either has experienced a decline as result of the growth of the other.
ReplyDeleteUniversal Studios is a very popular tourist attraction. i have been there a couple of times and I am also a huge fan. The rides, the food and the place overall is super fun. Like Kelly Stated above, I am also amazed by the new attractions added every season. They have new ideas all the time and they put them into place. They have a lot of economic growth through all the new attractions being created and added as time goes on. I think Universal Studies is becoming more popular for consumers than Disney World or Disney Land because of Harry Potter World, the new water park and all the other cool attractions. I think they will continue to grow in profit but also as a park.
ReplyDeleteIt would be interesting to see the return made through investments in capitol over time. to see the initial cost vs the total profits made by increasing the number of attractions. It would also be neat to see how much land the park has in other words how much space they have for expansion or if the opportunity cost of opening a new ride entails closing down a prior ride.
ReplyDelete