Earlier this week The Walt Disney Company released its quarterly earnings report and, while the big news out of the company may have been the company’s better-than-predicted earnings as well as new details about its Disney+ streaming service (coming later this year), it looks like this most recent quarter was a good one for the Parks and Resorts division as well, despite some early stagnation…
1. Attendance is basically flat with last year at Disneyland and Walt Disney World Resorts
Image: Disney
Last year, Disney went on a massive budget cut spree, removing characters, cutting hours at attractions, and even shuttering dining locations in an effort to prepare for attendance slowdowns during the first part of this year. And while attendance hasn’t really crashed the way some predicted, it hasn’t grown either, with Disney confirming that crowd levels during the first quarter of 2019 are basically flat with the first quarter of 2018. However, even though guest levels aren’t jumping up like they have in the past, that doesn’t mean Disney isn’t making more money during this period. In fact, it’s quite the opposite…
2. Revenue continues to rise as per-guest spending jumps thanks to higher prices on everything
During Disney’s first quarter revenue in the parks and resort division increased 5% to $6.8 billion for the three-month period, and operating income increased 10 percent to $2.2 billion.
Operating income growth at Disney’s US-based theme parks and resorts was due to an average 7% per guest rise in spending. This additional spending is largely thanks to higher average ticket prices, an increase in food, beverage and merchandise prices and of course greater parking fees. However, that’s not the only place where the increased revenue is coming from…
3. Guests are staying and paying more at Disney-owned hotels in the US
Image: Disney
Though per-guest spending in the theme parks was up by modest amounts, room spending in particular at Walt Disney World and Disneyland Resort was up 5% across the two destinations. And though you might think higher prices would deter some guests from staying at a Disney-owned hotel, it looks like the opposite is happening, as total occupancy at Disney-owned hotels across the two US resorts is up 3% to 94%.
This is a very positive trend, as domestic resort reservations are now up 4% compared to the same period last year, while booked rates are up 1%. This is certainly good news, as Disney is opening Disney’s Riviera Resort later this year, and will be looking to continue to fill these additional rooms.
4. Star Wars: Galaxy’s Edge is largely going to market itself
Image: Disney
Looking to the future, though we’ve still got a few months before Star Wars: Galaxy’s Edge opens at Disneyland Resort (and just under a year until it opens at Walt Disney World), it looks like Disney is already looking at how they are going to market this new land, and based on the following comments from Bob Iger during an earnings call, it looks like Disney’s promotion for this new land will be minimal:
“I would say on the marketing expense side, don’t expect much. I am thinking that maybe I should just tweet, ‘It’s opening’ and that will be enough. We are going to end up with incredibly popular and in-demand product with these two new lands. They’re large. They are beautiful, and they are extremely innovative. And they obviously leverage the popularity of the Star Wars brand. And I think that we are going to have absolutely no problem gaining attention for them or to them. It’s not going to take much marketing to do that.”
5. Shanghai Disneyland isn’t making as much money as was previously hoped
Image: Disney
Also during the earnings call, CEO Bob Iger mentioned a certain “softness” in attendance at Shanghai Disneyland during this most recent quarter, with profitability not quite meeting the internal thresholds set by the company. Of course, Disney isn’t quite giving up on Shanghai Disneyland just yet, as they just announced a new Zootopia-themed land, coming soon to the park with shopping, dining, and a brand new dark ride, so even if things aren’t exactly where they are supposed to be right now, Disney seems to be hoping that this park will be soon as it continues to grow and develop.
