Disney’s Q3 earnings report just came out and while the company shared many successes, the park numbers are down.
During the call, The Walt Disney Company discusses its latest quarterly earnings, revenue streams, and more. So when attendance to its theme parks came off topic, Disney wasn’t quite as advantageous to share its latest findings.
Visiting Disney theme parks both domestically and across the world can seem like a literal dream or a once-in-a-lifetime visit to some. With prices of tickets increasing steadily over the last several years, the introduction of a paid Lightning Lane system that replaced a once-free FastPass+ service, and the reduction of “perks” to hotel stays, it stands to reason why some folks just aren’t able to afford to visit the parks as often if at all these days.
During The Walt Disney Company’s earnings call, CFO Hugh Johnston addressed theme park attendance numbers as they make up a large portion of the company’s profits. In their reporting, it seems Disney has found that “higher income consumers are traveling internationally much more. Those people we think are eventually going to come back.”
So what does this mean? Well, it’s quite possible that the prices of a Disney World vacation rival an international vacation so evenly that “higher income consumers” are opting to vacation in other places besides the domestic theme parks. Is this a sign that prices for a Disney vacation may have risen to a point of plateau for the company? Well, they don’t seem too concerned about that yet.
Johnston followed with, “Our parks business tends to get hit late, it gets hit less, and it recovers early in comparison to the other theme parks out there.” He also went on to attribute this to Disney’s IP (intellectual property). He finished his comments about this topic adding, “I do believe the parks business is fundamentally in good shape.”
He also shared that the company’s success at the box office is “really what’s driving things more than anything else,” especially when it comes to licensing and streaming. Disney’s whole strategy recently has been producing great Intellectual Property (IP) as it pertains to the box office, streaming, and consumer products.
And, during the call, Disney revealed that park operating income was actually down for the quarter, attributing it to higher costs driven by inflation among other factors. Even still, Disney doesn’t seem to be too worried about this “financial slowdown.”
Revenue growth was impacted by lower consumer demand near the end of the third quarter more than what the company expected, but that doesn’t seem to be a problem for Disney.
We know that Disney is investing a ton of money into new cruise ships, hotels, and theme park lands — all things that will likely start to bring in huge revenue by 2025. Even though Disney isn’t pulling in the big bucks right now when it comes to the Experiences department, they’re probably not too worried because they’re placing big bets on new cruises and experiences.
It will be interesting when the next Disney quarterly earnings call rolls around to compare how quickly the company’s theme park attendance recovers. It’s important to note that Disney expects this to take several quarters to fully recover. Also, Comcast (owners of Universal Studios) also saw parks business decrease by 10.6% in Q2 due to lower attendance at domestic parks, so Disney’s news isn’t that shocking.
We’re constantly talking about how Disney is evolving and changing as a company, theme park mogul, streaming service, and more! Stay tuned with us at AllEars for the latest updates.
Disney Dropped MAJOR Theme Park Profit News — And It Isn’t Great
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What are your thoughts about Disney’s latest earnings call? Leave yours in the comments below!
Disney would do better if they stopped selling stale or moldy food. For the prices that they charge it shouldn’t be in that state. They also would do better by treating the cast better. Happy employee = Happy Customer.
or are the “higher” income vacationers going elsewhere because disney got too expensive? let alone taking away some of the nice perks. i dont think disney understands supply and demand. and what percentage of these higher income visitors did they loose compared to the number that quit coming?
Hopefully they will see the vision Walt had that made this company great! Maybe the rich can spend more but what does that do to the company’s reputation for 2/3 of the world.. Do you really want to be that Company? What goes around comes around. If I were rich, I would travel different places and see the world as well.
How soon before Disney’s prices prohibit the average family to go? They keep going up but nothing improves or changes????? If they keep nickel and diming the guest, the guest will go elsewhere!!!
Bob Iger is just biding him time until he can sell Disney to Apple. He couldn’t care less about who can afford to go the parks or not. He’s already stated that publicly. He would rather have once in a lifetime family visitors over lifetime repeat customers because repeat customers don’t spend as much per visit. Itsad that he publicly denounces the very people that made him over people he can letteraly rob and never see again. Shame on you, Bob. Go back to reporting the weather. I’m sure you didn’t do well there either.
This is what they say publicly anyway. I’ve overheard many visitors in the parks muttering “We’re never coming back here” because of inflated standby wait lines since Genie + launched. The standby waits are far worse than they were with FP+. Honestly, the only reason I think I keep coming back is Run Disney (which is also slowly but surely pricing me out). Doing two races a year, my annual pass so far pays for itself. But the CFO’s comment smacks of elitism. Does he really think that the wealthy travelers are going to consistently come back and come back and not become enthralled with the next exclusive destination? Then again, changing the extra evening hours to only Deluxe resorts is an extension of that, basically telling the people paying $200-$300 a night for Value and Moderate resorts you don’t deserve this perk. There are a lot of reasons Disney will publicly make as to why they are getting lower crowds, but hopefully they realize the real reasons.
I do not believe the attendance is low. If that was true lines would not be so long and you would not need lightning lane just to be sure to ride a couple rides. I go once a year and it is more crowded than before the pandemic.
DISNEY IS OVER PRICE We were planning on coming but instead going to take ten-day trip out west and still save money on what a four day at Disney was going to cost Disney vaction
This fall will be my “Disney farewell” trip. Hope those Internationals come with all their money,and keep the parks alive. Obviously Disney is not interested in the people who have made this company what it is
with their excitement and loyalty. I will be using my vacations to explore other desinations.
They can’t see what is right in front of their face. They make it sound like guests are taking a little break from the parks, but will be back. How about this: It costs a lot of money. It used to be that was acceptable because a family of four, staying on Disney property, could plan their stay weeks in advance with fastpass for free. Now 3-7 days in advance and paying another $100+ per day is just as good? They didn’t have to hassle with luggage, the ride to the resort was Disney through and through Disney and also free, and you didn’t need to worry about cell phone battery back up because you didn’t need to be glued to the phone all day. And then you could drop off your luggage on the weary day of departure and go have some fun or relax by the pool until the bus came to take you to the airport, your luggage meeting you at your home airport. Disney took alot of the magic away or made you pay for conveniences. And they wonder why people have had enough and are looking elsewhere? I’d say a good place to start when trying to figure out why people are going elsewhere is to look in the mirror first instead of arrogantly thinking you didn’t drive them elsewhere by making a Disney vacation just like any other.
You know your stuff. Lots of bad changes made by WDW .
“What does this mean?” It means Disney identifies it’s customer base as “higher income consumers”, not middle class families. It means that Disney is not concerned about affordability to bring in more families, but instead is focused on catering to the wealthy with expensive and exclusive perks and hotels – like the Galactic Starcruiser, because that was such a huge success!
The theme park attendance is dropping because not only is it expensive, it’s now overly complicated and a huge PITA to visit. The old fast pass system worked just fine and allowed for some flexibility and spontaneous activities. If you don’t schedule things, and don’t stick to the schedule, Disney World is happy to give you a middle-finger salute regardless of how much you spend
Its too complicated, I use to go twice a year, and enjoyed the planned fast passes and magical express. I did not have to stare at my phone the entire vacation and got to enjoy disney taking care of many things and those perks are gone. I still visit but its way more limited and way less than before.
Guests might be waiting for Summer of 2025 when Epic Universe opens.
Your dropping in attendance because your prices are outrageous! People can’t afford groceries, prescription medications and gas for their vehicles with this economy! You’ve made it just about impossible for families to afford a hotel let alone admission to the park! You’re price gouging is what’s caused your drop in attendance, not people traveling internationally!! Wake up!!
I wonder how many people stopped going because of the new DAS rules? Has Disney thought that they might have excluded a large group of the disabled community?
The people who run Disney are puffed up overpaid fat cats who think of themselves as “elite”, so is it any surprise that they target the same type of people for their target customer. For someone who stayed at Contemporary the first year it was opened, who honeymooned at both the Contemporary and Polynesian in 1986, and who has so many special memories, now including not just my children but my grandchildren, it is heartbreaking that we cannot afford to take a Disney vacation when we’d like to any longer. Trips to the beach or mountains, even when we choose somewhat luxurious accommodations cost just a fraction of what a full, no compromised Disney trip now costs. I’m fact, although I’m from Indiana, a very nice trip to Hawaii or U.S. Virgin Islands is now quite a bit cheaper for the same amount of days. And Disney Snob? Before you get too sure that your business is down but “so is Universals”, remember this. Universal is opening a HUGE brand new shiny theme park and THREE more hotels in 2025. Maybe, just maybe people are holding out their Universal trip until then. What’s your excuse? Change your motto from “happiest place on earth” to “let them eat cake”. I hope the people responsible for ruining Disney for the “lowly” middle class come on their “elitism”
Disney park attendance drops are relative. They’ve continually raised prices and nickel & diming their guests for years. People just sucked it up & paid, and they still do. Smaller crowds is a relative term at Disney also. There may be fewer folks in the parks, but if you are there, they are still crowded. Disney has always treated the parks as cash cows(because they are)but you can only milk them for so long before there’s just no more milk to give.
The average family cannot afford Disneys prices. It’s such a shame, especially those kids who will never experience Disney as a child. All the extras are ridiculous, Lightning Lanes, Genie Plus, and having to live on your phone all day planning rides. Not an enjoyable vacation for the amount of money you have to spend. I am a DVC member and rarely go anymore.
DVC member here as well. Disney needs to open their eyes and ears, and start listening to their customers. I don’t foresee positive changes. As long as Disney continues the nickel and dime game, my family WILL NOT pay park prices, fast pass charges, extra for magic bands etc. We will enjoy our resort and it’s amenities. We’ll venture off property and explore the state of Florida, maybe take in a dinner show. Until Disney brings back some Magic, we’ll continue to explore other fun adventures!
Agree. Since all the changes Disney blamed on Covid (Its telling all the things Disney ‘paused’ because of the pandemic that never came back or they now charge for), we do not get more than a 3 day park pass on a 7 day vacation.We use our DVC points , yes, but spend far less time and money on Disney property.Next February, we are using our points at the Vero Beach resort. No WDW at all.
It looks like people (including those with disabilities) are choosing to spend their money either where they’ll get more value or respect as a guest. My guess is Disney is just going to dig its heels in vs. bringing back the value and empathy.
Well, we are putting off a WDW trip and going to London next month so they aren’t wrong. I also noticed may of the travel folks I follow are doing the same. Interesting.
Numbers are only dropping as the post Covid rush dies out. I was at Disney World earlier this year and it was packed.
It’s a shame they only care about the “higher income consumers” and not the consumers that
have been with Disney since the days of Walt. I wonder what he would think? I think I’ll go elsewhere.