Sapphire Falls is Universal Orlando's latest hotel, but it won't be the last. Image source: Universal.
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You probably don't want to face off against Universal Orlando parentComcast(NASDAQ: CMCSA)in a game of Monopoly. All it does is keep building hotels. The theme park operator filed updated plans with the county last week for what would be the resort's sixth hotel, according to anOrlando Sentinelarticle.
Comcast has been voraciously building out its resort since the success of The Wizarding World of Harry Potter cast a levitation spell on guest attendance in 2010. It opened Cabana Bay Beach Resort, the resort's fourth and largest hotel, in early 2014. That was just months before it would debut the Diagon Alley expansion of J.K. Rowling's wizard universe, a move that would be highlighted by the addition of a richly themed train experience that connects Universal Orlando's two theme parks.
The resort's three original resorts opened between 1999 and 2001, following the debut of the Islands of Adventure theme park. The three hotels combine for 2,400 rooms, but the recent push to beef up lodging is taking things to an even higher level. Cabana Bay offers a massive 1,800 rooms. It is building a pair of towers that will add 400 rooms to the resort come early next year. Sapphire Falls opened this summer with another 1,000 rooms. In a span of two hotels and a little more than two years, Comcast's resort has more than doubled its capacity. It won't end there, and sooner or later Disney (NYSE: DIS) is going to start worrying.
Inn the loop
Last week's Comcast filing detail a 600-room hotel going up in a six-acre tract of land adjacent to Sapphire Falls. It's been labeled Aventura since the initial filing in late June, but names can always change along the way. There is no timeline for its completion, but by the time it has opened, we're talking about on-site capacity at Comcast's resort going from 2,400 rooms in early 2014 to 6,200 by the time Aventura is complete. In an interesting wrinkle, last week's filing taps Aventura as the resort's seventh resort. Unless the Cabana Bay expansion is being labeled as its own resort there may be yet another hotel in the works.
It won't end there. Aventura may be the smallest of the hotels as Comcast exhausts its viable real estate in the immediate area, but this is only the beginning. A few months ago it shelled out $130 million for a parcel of roughly 475 acres just outside of Universal Orlando. Comcast called the purchase a "strategic acquisition," but we've seen that it's moving at a much different speed than the methodical Disney. It's a strategy that's paying off when we see the attendance gains for both theme park operators since the Potterization of Universal Orlando.
Data source: Themed Entertainment Association.
This has to be troublesome for Disney. Its nearest rival is gaining ground. Universal Orlando's annual attendance has grown by 8.2 million guests since 2009. Disney World's four parks combine for growth of 6.5 million. Comcast is killing Disney with half as many parks. What's going to happen when Universal Orlando opens its new water park next summer? What's going to happen as it completes this hotel-building renaissance that will increase overnight guest capacity by at least 158% since the three original properties? Disney knows that folks staying at its resorts tend to stick to its parks. Won't the same thing happen at Universal Orlando?
Start rolling those dice like you mean it, Disney. If you don't advance to Go, you can't collect your $200.
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Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.