Pandemic a setback for Epic Universe

Construction has halted on Universal
Orlando Resort’s fourth theme park, Epic Universe, because of the coronavirus
pandemic, said parent company Comcast Corp, on Thursday.

Speaking on Comcast’s Q1 earnings call, CEO Brian Roberts
said construction has also been delayed at Super Nintendo World at Universal Studios
Japan in Osaka. Expected to open this summer, Super Nintendo World is likely to
open “a few months” later, Roberts said. However, its new theme park in Beijing
is expected to open on schedule next spring.

Orlando’s Epic Universe was originally expected to open in 2023.

All of Universal’s theme parks have been closed due to the
coronavirus pandemic.

“But there is no doubt that our theme parks will reopen, and
when they do, I believe we’ll benefit from strong, pent-up demand,” Roberts
said. “We love these businesses. They have been one of our fastest growing for
the last 10 years. They are extremely profitable, historically resilient and
enjoy high barriers to entry.”

In the first quarter, theme park revenue was down 31.9% to
$869 million, Comcast reported. 

According to CFO Michael Cavanagh, the park in Japan was
already experiencing some softness prior to its closure related to Covid-19 on
Feb. 29. The Universal Hollywood Resort closed March 14, followed by Universal Orlando
on March 16.

“At this point, all of our theme parks are closed and we do
not know when they will reopen,” Cavanagh said.

If the parks remain closed for the entirety of the second
quarter, it will result in a $500 million loss before before interest, taxes,
depreciation and amortization.

Asked by an analyst what capacity the parks would have to
reach attendance-wise to break even, Cavanagh said typically 50%. But even with
lower attendance, the company would be in better shape than if they were

Universal will not push attendance when the parks do reopen,
he said, because safety will be a priority.

“Our talented parks team is taking the right near-term steps
to control costs while remaining laser-focused on putting in place the
appropriate protocols, technology and infrastructure so that when we do reopen,
our parks are safe and feel that way to consumers,” he said.

The CEO said he was “heartened” by what the company is
seeing in China, where another theme park, Universal Studios Beijing, is under
construction, slated to open in May 2021.

Going into the Chinese New Year when the coronavirus’ spread
started to heighten in China, there were 12,000 construction workers working on
the park, Roberts said. That quickly went to zero, but today there are more
than 15,000 construction workers on the site.

“I’m pleased to announce we expect to be open on time and on
budget in 2021,” he said. “Beijing may be different, but perhaps it shows the
arc of this crisis.”

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