Vote of the week: The Walt Disney Co. vs. Wall Street
Written by Robert Niles
The Walt Disney Company's stock was one of the biggies driving Wall Street into the dirt this week, in large part due to analysts' skepticism that the company's theme parks can keep revenues up during a bad economy.Tweet
That makes me wonder just how much analysis Wall Street analysts actually do.
First, the Disneyland Resort in California traditionally does better when the economy tanks, keeping millions of Southern Californians closer to home for their vacations. When a tight family budget puts Hawaii or Mexican resorts out of the question, it's "I'm going to Disneyland!" time for those of us who live in Southern California.
Second, I've noticed that changes in the economy tend to do more to change the make-up of visitors to the Walt Disney World Resort in Florida than it does to reduce the number of those visitors, as opposed to the regional amusement parks, which can get killed in a bad economy. Disney's made huge moves in recent years to add upscale services and accommodations at Disney World, making the resort more attractive to wealthy visitors who are immune to economic downturns. Walt Disney World is no longer exclusively a middle-class destination, and anyone who believes that hasn't been paying attention for the past 15 years. Sure, a flush economy will bring more middle-class visitors as the wealthy tourists jet off to Europe. But a poor economy brings the wealthy and upper middle class back to Disney even as many working-class visitors stay home. Either way, tens of millions of visitors keep coming to Walt Disney World each year.
I don't want to deny that a bad economy could cause Disney World attendance and revenue to dip in 2012. But Disney theme parks have proven themselves quite resilient during the latest downturn - outperforming the rest of the industry up until Harry Potter's debut powered Universal Orlando to even higher percentage growth. (If there's an ongoing threat to Disney in Florida, it's not the economy - it's Potter stealing visitors off Disney property and over to Universal Orlando.)
Ultimately, though, it's you who will decide Disney's financial fate. Not me. And not Wall Street analysts. So tell us what you're planning in 2012. Are you planning to visit Disney's theme parks more often, or less, than you did this year?
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