OK, the Vivendi Universal second quarter numbers are out, and it is a mixed bag....looks like the Houghlin Mifflin Book Publishing is the first US asset that will be sold to raise cash.....
Universal is one of the stars of the company...
Consolidated operating income grew 8% to 2.4 billion euros, primarily driven by Vivendi UNIVERSAL Entertainment (VUE) and Cegetel, and to a lesser degree Environmental Services and Vivendi Telecom International. Operating income from businesses owned more than 50% declined 6% to 469 million euros
Now the company report states that the attendance at Universal Studios Hollywood is up.
Recreation reported 20% lower revenue, as lower per capita spending more than offset higher attendance at Universal Studios Hollywood as well as lower management fees from Universal Studios Japan.
Now, the problem is that the amount of money the average in-park guest spends is down. Based on my own personal opinion (plus what Disney stated in its third quarter report - see below), the promotions of the low cost AP's, and the child free with an adult admission causes two problems. First is the lower total admission revenue, if you have more AP's and child "comp" tickets, you are collecting a lower average price per guest entering the park, also, this type of guest will not spend as much in the gift shops, etc....
This is an issue that was brought up earlier in the year, Disney was more focused in raising the average vacation stay, trying to have people spend more time per visit, bringing in a group that would spend more on meals and souvenirs, and more revenue to the resort in general (Promotions like 3 and 4 day ParkHoppers at a discount). They then decided that they needed to get the "attendance" count up, no matter what, even after announcing that they would not offer "discount" admissions. The resort made a 180, and brought back the "buy an Adult admission at the Child's price, and get a Child's ticket for free", plus a new discounted two-day SoCal ParkHopper. And while this promotion, plus the Rockin' the Bay music series helps to bring in/back local guests, it does not help sell Hotel rooms, or multiple meals (A family would pick up Breakfast on the way to the park, and grabs a late night snack on the way home), so we are having the same problem USH has, but even with the discount tickets, the DLR attendance is down, both at Disneyland and DCA. (Based on the Third quarter information released by Disney, plus the comments that they don't expect the fourth quarter to match last year's numbers). Here is a quote from Disney's third quarter report - "Lower guest spending at both Walt Disney World and Disneyland was due primarily to a higher mix of local guests, which tend to spend less per visit, in combination with various other promotional programs. "
We also know that Knott's attendance and in-park spending is up over 1% per its second quarter information, plus we know that Six Flags attendance is down 7.5%, but the in-park per guest spending is up 9.6% per its second quarter release. Anheuser-Busch (Sea World) second quarter report is less specific, but we do know that that the park division revenue is up 5% over last year.
So lets look at the summary, based on the stock market information released this week...
Knott's - UP
Sea World - ?
Six Flags Magic Mountain - ? (The parks in general are down, no breakdown per park)
Disneyland - Down
DCA - Down
IN-PARK GUEST SPENDING
Knott's - UP
Six Flags Magic Mountain - UP (If the parks in general is up almost 10%, this is a good presumtion)
Sea World - UP (If total revenue is up 5%, this is a safe presumtion)
Disneyland - Down
So out of the five main theme park companies in Southern California, only Disney is down in BOTH attendance and in-park guest spending.
And now the question is why, all the parks got hit with the economy and travel worries, why is Disney the underperformer in this group, even after adding a new park and hotel???