Attendance was up slightly at the Walt Disney theme parks in the United States over the past three months, the company reported today.
Revenue jumped 6 percent year-over-year during the third quarter of Disney's fiscal year, which ran from April 1 through June 30, 2018. Operating income was up 15% for the period. Attendance was up just 1 percent, although Disney noted that this year's Q3 included only one week of the Easter holiday season, where last year's Q3 included both weeks of the Easter season. That drove a week of traditionally high attendance into the second quarter and cost Disney 1 percent of additional growth in attendance for the third quarter.
Per capita spending in the parks was up 5 percent, with per room revenue in the hotels up 8 percent. However, room occupancy was down 2 percent, in large part due to Disney taking rooms out of service for refurbishment, according to Disney executives. Disney reported an occupancy rate of 86% in its on-site hotels during the quarter.
Here is the Parks and Resorts declaration from Disney's press release:
Parks and Resorts revenues for the quarter increased 6% to $5.2 billion and segment operating income increased 15% to $1.3 billion. Operating income growth for the quarter was due to increases across key operations. Results include an unfavorable impact due to the timing of the Easter holiday relative to our fiscal periods. One week of the Easter holiday fell in the third quarter of the current year whereas both holiday weeks fell in the third quarter of the prior year.
Higher operating income at our domestic parks and resorts was due to increased guest spending, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices, food, beverage and merchandise spending and average daily hotel room rates. The increase in costs was due to labor and other cost inflation, partially offset by lower marketing costs. At our cruise line, growth was driven by higher passenger cruise days, which was primarily due to the Disney Fantasy dry-dock in the prior-year quarter.
The increased operating income at our international parks and resorts was due to growth at Shanghai Disney Resort and Hong Kong Disneyland Resort. Higher operating income at Shanghai Disney Resort was due to lower costs and attendance growth, partially offset by decreased guest spending. The decrease in guest spending was driven by lower average ticket prices, partially offset by higher food and beverage spending. At Hong Kong Disneyland Resort, the increase in operating income was primarily due to higher occupied room nights, average ticket prices and attendance.
Even though Star Wars Galaxy's Edge is debuting at Disneyland and the Walt Disney World resorts next year, "the launch of the Disney DTC ('direct to consumer,' i.e. streaming video) product is the biggest priority for the company in 2019," CEO Bob Iger said in an investors' conference call following the release of the earnings report. Expect a huge publicity push to anyone Disney has contact with - including annual passholders and DVC members - as that Netflix-style service prepares to launch in last 2019.
Iger also said that the company expects some "revenue yield" opportunities with the opening of the Galaxy's Edge lands. Get ready for more AP changes, new ticket packages, and prices increases.Tweet
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