Originally Posted By HokieSkipper From Jason Garcia, all were said by NBC/Universal CEO Steve Burke at a conference: <<Whoa: NBCUniversal Steve Burke says, using the multiple SeaWorld currently trades at, Universal's theme parks are worth $9-10 billion now. Said Comcast initially valued that biz at just $1B when it bought NBCU. They only owned 1/2 of Universal Orlando then. But still. Wow. Also just repeated his belief that Universal Orlando has room for 10,000 hotel rooms (has only about 2,400 now, not incl. Cabana Bay). 1st time he threw out the 10,000 rooms #, sounded like he was just using a big number to make a point. But this time sounded like a real #. Burke: “We love the theme-park business. We think there’s a real opportunity to increase the pace of new attractions.... "... We have far too few hotel rooms in Orlando….You’ll see us add attractions at a more rapid rate, add hotel rooms at a more rapid rate.">>
Originally Posted By HokieSkipper More from Burke: <<1st of all, just said NBCU did study saying Uni Orlando could have 10,000 to 15,000 hotel rooms -- 15,000! -- and still hit occupancy goals. "I think you'll see us open hotels. We've done a study that says we could have 10,000 or 15,000 hotel rooms and still have occupancy... "...that makes those rooms profitable. And all of those people staying in those hotels would be more likely to go to our theme parks. So... Second, he said attendance at Universal Studios Florida has been up about 20 percent "most weeks" since Transformers opened..... "...I think, strategically, we need to get those hotel rooms open and build out the resort." "Our theory is, if we open the right kind of attractions -- they have to be well-executed, they have to be things that are easy and.... "...and clear to market -- that we can really grow this business." Also said NBCU wants to continue the cadence of opening up at least one new attraction in both Orlando and Hollywood every year. And then a few fightin' words: Universal parks are becoming "a family destination in and of itself and not an add-on destination for.... "....somebody that spends three or four days somewhere else." Gee, I wonder where that somewhere else might be. >>
Originally Posted By Dr Hans Reinhardt He sounds just like Michael Eisner talking about WDW back in the 80s.
Originally Posted By HokieSkipper Not sure if you know, but he actually left Disney parks and resorts in the 90s because Eisner wouldn't give him more responsibilities. He was the guy that stabilized Euro Disneyland after its opening debacle.
Originally Posted By leemac <<Not sure if you know, but he actually left Disney parks and resorts in the 90s because Eisner wouldn't give him more responsibilities. >> Steve never actually worked at WDP&R (or WDA back in those days). He started his Disney career as MDE's executive gopher where he was despatched to work on different projects - he was the corporate lead on the Disney Stores development and he was President/COO at EuroDisney for a time. His final role was as President of ABC. Although Steve enjoyed the parks he never wanted to run the division. His sights were firmly on moving back to corporate as either president or CEO. MDE made it clear that a host of other candidates stood in his way so he jumped ship to Comcast in '98.
Originally Posted By HokieSkipper Thanks for the clarification, Leemac. I had always thought he was a P&R guy.
Originally Posted By leemac <<We've done a study that says we could have 10,000 or 15,000 hotel rooms and still have occupancy...>> We've? NBC-U currently has zero hotel rooms on property. I'm not sure Loews would be able to develop that number of properties (not just because of the cost but also because that would increase risk materially as they currently only have 20 hotels and three of those are at Uni). WDP&R's view is that the Orlando market is not over-saturated for hotels - particularly in the value and moderate space. Flamingo Crossing is close to having a couple of launch partners and there are still plans to increase inventory at WDW. Orlando is a mature market though - so if new inventory continues to outstrip the increase in tourists then the folks beyond the resorts will suffer - the likes of US-192 and I-Drive.
Originally Posted By leemac <<Thanks for the clarification, Leemac. I had always thought he was a P&R guy.>> No problem. I like Steve a lot - always have. Genuinely nice guy and it is a shame that MDE couldn't appease him. He wasn't particularly liked in corporate as he was seen as MDE's poodle (and he did get a reputation for reporting back to MDE on his direct reports) but he has a sound business brain.
Originally Posted By HokieSkipper <<Orlando is a mature market though - so if new inventory continues to outstrip the increase in tourists then the folks beyond the resorts will suffer - the likes of US-192 and I-Drive. >> I agree, and to add, Universal doesn't have the room to add that many hotel rooms as is. I honestly think the most likely scenario is that they buy land currently occupied by hotels on I-Drive and on Major Boulevard, knock existing buildings down, and build new, themed resorts.
Originally Posted By leemac <<Whoa: NBCUniversal Steve Burke says, using the multiple SeaWorld currently trades at, Universal's theme parks are worth $9-10 billion now. Said Comcast initially valued that biz at just $1B when it bought NBCU. They only owned 1/2 of Universal Orlando then. But still. Wow.>> They paid nearly $17bn to buy out GE - the parks and resorts business generates c.25% of the operating income for the whole NBC-U segment - so that put a valuation of over $4bn for half of the parks (including the control premium). Sea World is currently trading at about 10x earnings (the business should do $250m-300m this year) so that multiple isn't too bad - but Sea World own all of their properties whereas NBC-U has two resorts under licence (and therefore lower revenue).
