Disney confirms drop in summer theme park attendance
The Walt Disney Company confirmed that attendance at its US theme parks was down 4 percent in the three month period ending July 2, compared with the same period one year ago. Despite the attendance drop, theme park revenue increased 6 percent, to $4.3 billion, and operating income was up 8 percent, to $994 million, according to the company's most recent earnings report.
Disney didn't break down attendance at the Walt Disney World Resort in Florida versus the Disneyland Resort in California. However, anecdotal reports from fans suggest that theme park attendance across the board has been softer in the Orlando area this summer than it has in Southern California. A strong US dollar has made it more expensive for international tourists to visit the United States, which tends to hurts the Orlando parks more those in Southern California, which are more reliant upon local visitors.
In addition, tourism from Brazil — another traditionally strong market sending visitors to Orlando — has dropped significantly due to economic and political turmoil in that country. The Pulse nightclub shooting in Orlando certainly didn't help inspire visits, nor did a fatal alligator attack at Disney World immediately after that.
Finally, and perhaps most significantly, Disney's big price increases have limited demand on both coasts and Disney's revamp of its ticket and annual pass pricing has helped steer people away from the summer months toward traditionally less popular times of the year.
Disney World this summer opened a Frozen-themed revamp of its old Maelstrom ride in Epcot as well as a new version of its popular Soarin' travelogue in the same park. In addition, it expanded nighttime hours at Disney's Animal Kingdom and added a new Star Wars-themed fireworks and projection mapping show at Disney's Hollywood Studios. However, Disney canceled press events promoting these additions, then went silent for a week on all social media after their debut, following the Pulse shooting and alligator attack.
Disney World yesterday announced 20 percent discounts on select Disney resort hotel rooms in November and December and Universal Orlando recently lifted summer blockout dates in an effort to boost attendance. However, fears about the spread of the Zika virus in Florida still threaten the state's tourism prospects.
In California, the Disneyland Resort should get a boost this month from the impending closure of the popular Disneyland Forever and Paint the Night shows, but attendance might weaken after those shows close, especially with lower annual pass renewal rates since the price increases and program changes last year. Meanwhile, observed attendance gains at Universal Studios Hollywood following last spring's opening of The Wizarding World of Harry Potter appear to be at least partially offsetting the presumed attendance softness for Universal in Orlando.
I'm guessing they'd still be pretty happy with this result. Despite significant challenges they've still managed to increase profits with only a very mild drop in attendance.
It's going to be even harder hit when UK visitors take a sharp decline, with the fall of the pound.
At least in the U.S., Disney needed to lower attendance. The park overcrowding was decreasing customer satisfaction while increasing other costs. Trading attendance for margin made business sense and they have done that successfully. The real challenge is keeping attendance up in the off season with the higher prices and here they have demonstrated how to do that. Attendance may be down but revenue is still increasing. As long as enough people are willing to pay, they will keep it up.
I hope this trend continues thru this winter for when I visit in December. The last time we went in '12 the crowds were horrible.
This seems expected given the raise in prices, lack of new attractions, and number of closed attractions at both resorts due to construction of Star Wars and Toy Story. Now is the best time to go, because once Star Wars is done, there will be record crowds. They should also build Star Wars Land at Disney Studios Paris or Hong Kong. Star Wars would lead to record attendance there too, just not anywhere near close to what it will do to DHS or Disneyland Park.
a lot of uk people visit florida and i can see a decline until brexit sorts it self out and the pound dropping sharply.
I didn't go to Disneyland this year. The price increases returned me to old habits of a generation ago like visiting Disney as a once a few years treat despite the fact that I moved to within a 15 minute drive to Disneyland Anaheim. Other parks are offering generous discounts. Can't pass them up.
Brian Emery, you are thinking like a fan and not a businessman. Prices are up, profits are up despite lower attendance. There will be another price increase next year, people will still come, and the cycle will continue.
Hey Two Bits - actually no....
Brian, just no. They are making more money and don't have to worry about as many people. That is their business strategy whether you like it or not. Phase out the middle class and cater the the upper class that spend more. It's currently working.
"3. Maybe finally build a new Adult ride."
While all these points are valid points for the drop in attendance, this article left out one key factor for the drop in attendance. That one factor is the many fans who have simply become upset with WDC. From the removal of Aladdin, to the shorter operating hours at Disneyland, and finally to the removal of the Tower of Terror, many fans like myself have decided to finally pull the plug on renewing their long held AP. And trust me there's actually quite a few fans who've become disenfranchised. Don't believe me? Just go check on Micechat or WDWMagic and see what people are saying about renewing their AP. For many people, it has very little to do with cost of the AP, and more to do with the fact that Disney has angered their fan base.
Before I accept Disneyobsession's analysis I want to know how many AP holders there are for Orlando and what percentage they constitute of the total WDW attendance. My suspicion is that it's a vanishingly small percentage of overall business and that whether fans visit or stay away makes stuff all difference to Disney's Orlando bottom line....
Barry - Ever hear of J. Paul Getty? His theory was to make a small about from a large number of folks. And for his time, he was the wealthiest person in World.
Disney is a different niche for amusement parks....Disney wants to be the higher end of entertainment and want the experience to be Magical. Having a large number of folks at the park so that it's filled to capacity is not Magical.
I used to love Disney World and had premium season passes. It was expensive, but I felt at the time it was worth it. I tried the My-Magic Plus app. and all the fast passes were gone at 7PM at night. (Usually the time I arrive) It was just not a good. I found Pineapple Dole-Whip on-line and can make at my house now...sorry no reason to go now. I'm going to Universal and have been impressed with what they have been doing in their parks.
Cut costs, cut quality, raise prices, dumb down content, cater to the lowest common denominator, maximize profits for the next quarterly report...
Disneyobsession, I'd love to believe you're right, I don't believe you are. Fortunately I'm sure the marketing and bean counting people at Disney are sure to know the cause for drop in attendance, and ignite customer dissatisfaction that'll be the strongest argument for new development. However given the small drop and the existence of these other known reasons I think it's unlikely.
Robert, can you explain the difference between theme park revenue and operating income?
James wins. Also thank you for that economics lesson from the mid 1900's, Brian. While I won't dispute the theory, I think there is something to be said about the growing gap between two classes in this country and one companies decision to capitalize one. Which appears...at this moment...to be working.
Attendance drops are to be expected at the WDW parks as people hold off on planning trips while construction crews are out in force. However, I do tend to agree with Barry that WDW bean counters would rather have fewer visitors spending more money, than the opposite. Why wouldn't they? Operationally, if you can cater to a select group of wealthy folks and still beat your revenue numbers, then why wouldn't you?
Hey James: How about just outside Orlando BGT... Great park with many adult rides.
Got it, Brian... You're talking big boy coasters / thrill rides. So BGT has Shiekra, Montu, Kumba, and Falcon's Fury that might qualify as more adult oriented. About the same number as SeaWorld.
Hey James: Montu is my favorite..
I have noticed how light crowds have been even for a Friday and Saturday.
It's so funny to see the criticisms of Disney when they are the premiere theme park and entertainment company in the world and will go down in history as such. We have been in the golden age of theme parks for the past six decades and no one has done it better than them. From theme park design, to the way guests are entertained the moment they step through the gates, every other successful company has borrowed something from Disney.
James Rao - Soon to be removed Dragon Challenge? What did I miss?
@220.127.116.11, you missed
we live in England, we have been to Orlando Heaps of times. gripe 1. 14 day pass 2007 £141. 2016 £330 car parking for none Disney guests.
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