Revenue up, attendance mixed at Disney theme parks in 2019

November 7, 2019, 4:13 PM · The Walt Disney Company reported its fourth quarter and full fiscal year 2019 financial reports this afternoon. In the Parks, Experiences and Consumer Products segment that includes Disney's worldwide theme parks, revenue and operating income were up for both the quarter and the year, but the company reported attendance decreases at some resorts.

Revenue was up 8 percent for the quarter and 6 percent for the year for the parks' segment, while operating income rose 17 percent for the quarter and 11 percent for the year. Income gains were driven mostly by higher prices for admission, hotels, food, and merchandise. Disney reported a slight attendance gain at the Walt Disney World Resort but noted attendance declines at California's Disneyland, Shanghai Disneyland and Hong Kong Disneyland.

From the company's earnings summary:

Growth at Disneyland Resort was primarily due to higher guest spending, partially offset by expenses associated with Star Wars: Galaxy’s Edge, which opened on May 31, and, to a lesser extent, lower attendance. Guest spending growth was primarily due to increases in average ticket prices and higher food, beverage and merchandise spending....

Results at Walt Disney World Resort were comparable to the prior-year quarter, despite the adverse impact of Hurricane Dorian in the current quarter. Increases in guest spending and, to a lesser extent, occupied room nights and attendance were offset by higher costs. Higher costs were driven by costs associated with Star Wars: Galaxy’s Edge, which opened on August 29, and cost inflation. Guest spending growth was primarily due to increased food, beverage and merchandise spending and higher average ticket prices.

Operating income at our international parks and resorts was comparable to the prior-year quarter, as growth at Disneyland Paris and Shanghai Disney Resort was largely offset by a decrease at Hong Kong Disneyland Resort. The increase at Disneyland Paris was driven by higher average ticket prices and attendance growth. At Shanghai Disney Resort, higher operating income was due to an increase in average ticket prices, partially offset by lower attendance. Lower results at Hong Kong Disneyland Resort were due to decreases in attendance and occupied room nights reflecting the impact of recent events.

Disney officials said in a conference call that advance hotel bookings are up 5 percent at Disney's domestic theme park resorts, suggesting that attendance will rise in the upcoming year as Disney completes the opening of its Star Wars Galaxy's Edge lands at Walt Disney World and Disneyland, and opens additional new attractions on both coasts.

Replies (10)

November 8, 2019 at 10:03 AM

Definitely a confusing report and investor call this quarter. Disney continues to toe the line that revenue is up from increased spending and ticket prices, but as one of the questions queried, how much more can the company rely on these tactics to deliver value to shareholders? When investors are starting to question if prices are too high, you know you're getting close to the upper fringes of what the consumer will tolerate. Disney did retort that future bookings are up, which confirms speculation that a lot of guests are waiting for RotR to open, but it remains to be seen whether Galaxy's Edge can drive attendance growth after it's fully armed and operational. Since we are visiting in late January/early February, I have been routinely following resort bookings, ADR availability, and occupancy, and it does seem that what is typically a very quiet time of year will feature very full resorts - partially due to a confluence of events at WWoS. I've also been closely following FP+ availability at WDW, and aside from the top attraction at each park (7DMT, SDD, and FoP), it's pretty easy to cobble together a prime morning itinerary for the week after Thanksgiving even inside the 30-day window, so my perception is that the parks will remain relatively uncrowded, particularly compared to what they were like for most of October where they were close to summer peak levels, even with the debut of RotR.

This will be an economic and project management case study for the ages, as there are so many variables and unorthodox decisions that were made here. The presence of PtWoA and WWoHP give us contemporaneous comparisons, but the point remains that Star Wars is different than almost any other IP on the planet. What hopefully will be gleaned is that the apparent under-performance of Galaxy's Edge is primarily due to external factors and that reduced investment in capital improvements should not be seen as a viable strategy for future projects (i.e. just because Galaxy's Edge didn't bring the expected wall to wall crowds right away, Disney shouldn't start cutting corners and budgets on new attractions).

November 8, 2019 at 11:24 AM

2019 will go down as an odd year for theme parks with attendance down a lot worldwide. Europe has excuse of the killer heat wave in the summer but still odd seeing the dips at Disney, Universal and Six Flags among others. Still, we've seen such dips before and things bounce back, something to look forward to with new projects coming.

And agree, worried Disney has a knee-jerk reaction to it by cutting corners on future stuff. We've seen that happen before and it rarely works out.

November 8, 2019 at 12:33 PM

I own stock in Disney, and I'm not happy with all the price increases. I used to live in Maryland, but moved to Florida this past June. Now, instead of spending 7 or 8 days in Disney, I just spend a few hours at a time. I don't buy food there, and I no longer buy any of their products. I do enjoy the shows and rides.

Crowds are just too big to really enjoy... Try getting a Fastpass+ for Flight of Passage (at the AK). I can't get one even 30 days ahead of time.

Once Upon a Time, they gave discounts to Stockhoders.

Galaxy's Edge is good, but not a great place. It's mostly just sales (food and trinkets). RotR is good, but certainly not worth standing in line for a second ride.

The SkyLiner is nice, but again... not something I want to consider a ride. I still prefer the buses.

So... where is Disney going with all of this?

November 8, 2019 at 2:35 PM

I've said it before, and I'll say it again: As long as profits are up, Disney will considered all additions and changes to their parks and resorts a success. Attendance is not an issue to them. The higher-ups are more than happy to see fewer people spending more money.

There will be an upper limit to what Disney can reasonably charge, though. I think it will likely be external factors that will make that upper limit appear. Right now, people reading about attendance being down at Disney parks are thinking its a great time to visit since it will be less crowded. As long as they could afford a Disney vacation before, they won't be concerned with spending another thousand (or two). But if there is an economic downturn like the media keeps reporting is coming, then Disney price increases will level off (but never decrease outside of the vacation packages and deals they regularly release).

November 8, 2019 at 2:48 PM

The business model articles are quite interesting. Yes Disney has raised prices causing less attendance. The parks are overcrowded. The price increases are therefore in some ways a relief when one visits the park. However, I am one of those people who will be going less now, in part because of the price increases. We used to go every year for over ten years in a row, but did not go this year, and maybe not even in 2020. Too much nickle and dimeing in and around WDW. I can't stand resort fees and having to pay for parking everywhere. These fees were nowhere near as prevalent ten years ago.

November 9, 2019 at 2:19 PM

Definitely too expensive! I went to DL this summer, just because I got to take advantage of the $99 pass holder discount tickets from a friend. It was slow, RoTR was the longest line we waited in at 45 minutes, and I have to say, would not have been worth any more time than that. If you like playing video games, you’ll probably like it. GE was cool to see once, but it’s not going to be a draw for me to visit again. Best thing there was the bar, and the prices were so insane that I probably won’t go back. And I’m a SW fan! My friends who are super fans though, loved everything and paid for the crazy stuff like getting a lightsaber, so maybe Disney’s strategy is working.

November 10, 2019 at 3:18 AM

we usually vacation in Florida once a year from the uk but the experience we had this year has certainly put us off visiting for at least the next 5 years.. Horrible crowds, ride times awful, we couldn't get fastpass for avatar , slinky, seven dwarfs even 60 days in advance!! Prices have really risen and we found the park staff to be rude on quite a few occasions. We found GE to be ok but we walked round once and sued for 35 mins to ride smugglers run and felt cheated at that "no better than star tours". But the obvious popularity of the land then had an awful knock on effect with the rest of the parks ride times!180 mins for TOT and RRC !! We even left the MK early while watching the fireworks as the crowds were so bad and the ferry que back to the parking lot was quite dangerous as we were herded like cattle with no lighting... We also noticed that many of the shops were rather sparsely stocked on more than one occasion?? Next time we visit we will give Disney a miss and concentrate more on Universal SeaWorld and busch gardens,

November 11, 2019 at 3:44 PM

As Warren Buffett said, Disney is a great company because they can continue to raise prices as long as the management has the courage to. And as we know, they definitely have the courage to lol.

November 12, 2019 at 7:13 AM

@jacquiv - How did you get on RotR? The attraction isn't set to open at Disneyland until January.

November 12, 2019 at 2:48 PM

Yeah, if I could get on RotR 6 months before it opens, I wouldn't complain at all!

I'm sure JacQuiv mean Millennium Falcon: Smuggler's Run. :)

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