Here’s How Volcano Bay Can Drive Revenues For Comcast

Recently, Comcast (NASDAQ:CMCSA) opened its third theme park “Volcano Bay” under the Universal brand in Orlando. This next generation theme park has several advanced features such as wearable technology which will enhance the guest experience. The “Tapu Tapu” bracelets introduced in the park allow users to reserve rides virtually and wait elsewhere instead of standing in physical lines. These bracelets will also serve as digital wallets, allowing guests to spend easily in the park on food and beverages and other items. While theme park revenues do not form a very significant portion of Comcast’s business, we expect steady growth in these revenues over our forecast period.

Improving economic conditions and higher per capita spend are the two key factors which will drive revenues for Comcast’s Theme Park segment. We believe the enhanced guest experience at Volcano Bay can drive revenues for the company. While tickets are priced higher for this park compared to many competitors, the advanced features should attract customers. Further, this park will stay open until 10 p.m., later than the Disney parks, providing an option for early evening arrivals to enjoy the theme park. Comcast is also looking to build a competitive edge over Disney through its three theme parks in its resort in Orlando, which is likely to make this more than a weekend destination.

The International Association Of Amusement Parks And Attractions (IAAPA) estimates a 2.5% CAGR (compounded annual growth rate) in per capita spending at theme parks between 2015-2020. While this spending is likely to be modest in North America, and most growth in the segment is likely to come from other geographies, Comcast is well poised to capture some of this growth with Volcano Bay.

The theme park segment forms part of the NBC and Comcast content division of Comcast, which accounts for nearly 40% of the company’s valuation. While this division also includes other segments, and theme park revenues are not particularly significant, we believe Volcano Bay can give the company a competitive edge. Comcast has been an industry leader due to its innovations in various segments and the company is bringing the same innovation to theme parks. This technology advantage can enable the company to drive revenues from this segment in the long term.

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