Earlier this week The Walt Disney Company released its quarterly earnings report and while the biggest news was in regards to the continuing evolution of the Disney+ streaming service (and the wild success of The Mandalorian), some interesting things have been revealed about the Parks and Resorts division as well!
After reporting that theme park attendance was basically flat last quarter, all eyes are on attendance figures at domestic theme parks, as this most recent quarter (which ended December 28, 2019) includes the blockbuster opening of Star Wars: Rise of the Resistance at Disney’s Hollywood Studios
1. Attendance and spending are up US Disney parks, thanks in part to the blockbuster launch of Star Wars: Rise of the Resistance at Disney’s Hollywood Studios
Though Disney does not typically report specific attendance numbers in their quarterly financial reports, they do report general trends at their parks, and this quarter was no different, with Disney confirming that attendance Walt Disney World and Disneyland combined was up two percent in the first quarter when compared with last year.
Though not stated specifically, we’d guess that a lot of this is due to the blockbuster opening of Star Wars: Rise of the Resistance at Disney’s Hollywood Studios, which drew massive crowds in December. And with this attraction now making waves at both Disneyland and Walt Disney World, we’d expect attendance to go up even more next quarter!
2. Revenue is up again thanks to higher attendance and increasing prices on tickets, food and more
Increased attendance at Disney’s parks was definitely a good thing for revenue this quarter as per-guest spending was up 10 percent overall thanks to higher ticket prices, more expensive merchandise and increased food and beverage spending,
In addition to higher spending in parks, it was good news for Disney’s on property hotels as well, as guest spending in this section was up four percent and occupancy hit 92 percent during the quarter that ended in December. Fast-forwarding to current resort trends, domestic resort reservations are trending up by four percent compared to this time last year, and booked rates at our domestic hotels are currently up 10 percent as well.
3. Disney is prepared to take a big hit from Shanghai Disneyland and Hong Kong Disneyland closures
Looking outside the US, though Disney reported lower attendance at Hong Kong Disneyland Resort, during the most recent quarter Shanghai Disney Resort actually saw some growth, which was definitely a positive trend for the struggling resort. However, CEO Bob Iger had to address the current closure of both of these parks due to the Coronavirus outbreak in China, and unfortunately the news was not good.
Right now Iger said that the company is bracing for a two month closure for Hong Kong Disneyland and Shanghai Disney Resort, which is in line from what we have been hearing elsewhere, and this will result in a $135 million loss from Shanghai and a lesser (but still significant) loss of about $40 million from Hong Kong.
Of course, things can change and there’s no way to know if planning for a two month closure is too conservative or excessive, but right now it looks like Disney is going to see some real negative effects from this unfortunately ongoing situation.
Though there was a lot of positive news for this most recent quarter, we are eagerly awaiting Disney’s next quarterly results, as we’ll have more of an idea of how Star Wars: Rise of the Resistance is performing on both coasts, as well as the overall effect of the extended park closures in Shanghai and Hong Kong.
