Revenue, Income Recover at the Disney Theme Parks

November 10, 2021, 3:18 PM · About one-third of Walt Disney World visitors are upgrading to Disney Genie Plus, Disney CEO Bob Chapek said today. In addition, per capita guest spending is up 30% over pre-pandemic levels, company executives said.

Disney reported revenue of $5.450 billion for its Parks, Experiences and Products segment in the fourth quarter of 2021, a 99% increase over the same period in 2020. However, this year's revenue remained behind the $6.655 billion in revenue that Disney reported for its parks segment for the final quarter of 2019, before the pandemic.

Operating income for the parks segment was $640 million in the fourth quarter, up from a $945 million loss in the same period in 2020, but down from a $1.381 billion in income for the same period in 2019.

For the year, Disney Parks, Experiences and Products reported $16.552 billion in revenue in its 2021 fiscal year, down 1% from the 2020 fiscal year. Yet operating income was up 4%, to $471 million, for 2021 over 2020.

Disney's theme parks were closed for significant part of both the company's 2020 and 2021 fiscal years. In the company's 2019 fiscal year, before the pandemic forced parks worldwide to close, the Parks, Experiences and Products segment reported revenue of $26.225 billion and operating income of $6.758 billion.

"Attendance trends continued to strengthen at our domestic parts with Walt Disney World's Q4 attendance up double digits versus Q3, and Disneyland attendance continuing to strengthen significantly from its reopening in the third quarter," CFO Christine McCarthy said. "Guest spending at our domestic parks also continued its strong trend with per capita spending in the fourth quarter up nearly 30% versus fiscal 2019."

"We expect that per capita spending at our domestic parks in fiscal 2022 will continue to significantly exceed pre-pandemic levels, and we are particularly encouraged by the early response we are seeing to Genie at Walt Disney World," McCarthy said.

"The majority of Genie and Genie Plus users have said it improved their overall park experience, with nearly one-third of park guests upgrading to Genie Plus," CEO Bob Chapek said. "We are very encouraged by what we're seeing and look forward to launching Disney Genie at Disneyland very soon."

Disney Genie Plus is a $15 per person per day upgrade at the Walt Dusney World Resort, while the service will cost $20 per person per day at Disneyland. For more information on the service, please read our guide, How to Use Disney Genie Plus.

As for Disneyland's new annual pass system, Chapek added that about 40% of current sales of Disneyland's new Magic Key passes have been to new passholders, and most Magic Key holders have purchased the top two tiers, with the top Dream Key selling out in just two months. Chapek also noted that the upcoming Star Wars Galactic Starcruiser experience at Walt Disney World has sold out its first four months of operations. The Star Wars-themed hotel opens next spring.

As for Disney Cruise Line, McCarthy said, "our entire fleet has returned to sea, with guests ratings as strong as pre-pandemic levels, despite new health and safety protocols. While we expect social distancing restrictions on our ships to remain in place for at least the first half of fiscal 2022, booked occupancy on our ships for the second half of the year is already ahead of historical ranges, at significantly higher pricing. And we are excited for the Disney Wish to set sail in June 2022, with the inaugural season already nearly 90% booked."

Finally - and not directly related to the parks but perhaps of interest, Chapek said that the company plans to get more involved in the sports betting business. He said that Disney's research now shows that the company getting into sports gambling would strengthen the ESPN brand without harming the Disney brand. That's a huge cultural turn-around for The Walt Disney Company, which had positioned itself as staunchly opposed to any connection to gambling in the past.

Update: I missed this during the investor call because I was updating this post, but I caught it later when reading the transcript. McCarthy was asked about inflationary pressures, and she responded:

"Just last week I was talking to our Parks senior team about things we could do there. There are lots of things that are worth talking about, you know, we can adjust suppliers; we can substitute products. We can cut portion size, which is probably good for some people's waistlines. We can look at pricing where necessary, but we aren't going to go just straight across and increase prices."

The "waistlines" crack is not going to play well, is it?

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Replies (26)

November 10, 2021 at 4:30 PM

Not surprised. Disney Genie+ is here to stay.

November 10, 2021 at 5:48 PM

I think there are great opportunities to introduce betting into the parks. Most rides have a single point where the standby lane and lightning lane split off – say, left to standby, right to lightning. Imagine a game of chance, say a digital coin toss, that picks the lane. Heads to standby and tails to lightning. If you’re at the Genie level then flipping tails would be near impossible so it’s mostly off to the standby for you, matey. But, if you’re willing to sweeten your bet with a bit of cash, say a buck, your odds would improve greatly, maybe 50/50. Worth a shot. Of course, once your total bet hits $15, the Genie+ level, your odds of getting bumped to the lightning lane would be 100%. The object of the game would be to stay under $15 but get upgraded to the lightning lane often. This would certainly juice up waiting in lines with only a minor increase in gambling addiction.

November 10, 2021 at 7:12 PM

As glad as I am to see a business do well, I'm concerned that this'll just show the execs to keep on increasing prices and cutting costs.

In the earnings call, they also stated that they are looking to decrease food portion sizes. I'm sure they'll increase the price of food and decrease how much you get. Just like almost everything at Disney now, the consumer is paying more than ever to get a more limited experience than just two years ago.x

November 10, 2021 at 7:41 PM

I can see why the wastelines thing might be seen as off colour... but there is a point there in US Portion sizes. Have a watch of Insiders "Food Wars" series comparing US and Uk (and lateley Japanese) portion sizes. when it comes to your fountain drinks, your smalls tend to be larger than our larges... There's something broken in sizing expectations over there.

November 11, 2021 at 8:18 PM

I hope US people don't get offended by my post, but honestly US portions are way too large and way too unhealthy, the desserts US restaurants serve are way too sweet. My wife and I can only finish one main course together but many places force us to take one main course each. A lot of times we looked at the portions and felt terrified.

I think one of the solutions would be for restaurants to offer meals in different portion sizes and charge accordingly. No more one size fits all.

November 10, 2021 at 10:15 PM

I think McCarthy easily could have spun a portion size reduction as a benefit to consumers who are asking for healthier, less wasteful options. But her remark came off as patronizing of guests instead. Disney executives typically don't miss the mark like that in meetings such as this, so I found her comment surprising.

November 10, 2021 at 10:47 PM

It’s a little rich for the person making an incredible sum of money selling large portions of unhealthy food to consumers to crack wise about the consumers lack of dietary control. We all know that’s how Philip Morris gets down, but I don’t need to hear them joking about how bad their customers lungs look.

November 11, 2021 at 3:47 AM

Why can't people split an entree?

November 11, 2021 at 6:00 AM

"The majority of Genie and Genie Plus users have said it improved their overall park experience, with nearly one-third of park guests upgrading to Genie Plus,"

As compared to what?

And Disney is worried about inflationary pressures? Right...

November 11, 2021 at 7:42 AM

@Tim - That's my question too. Is Genie+ improving the experience compared to earlier this summer when there was no option to bypassing lines, to previous incarnations of FP/FP+, or to other parks' queue avoidance options? Any queue avoidance option (even one that costs extra and isn't that great) would be better than nothing, which was the case earlier this summer, so of course people are going to say Genie+ improved their park experience.

Disney isn't worried about inflation, because they are staying ahead of inflation by raising prices long BEFORE inflation affects other businesses and markets. Disney raised prices and started adjusting products to stay ahead of inflation the second their parks reopened last summer/fall (eliminating APs, DDP, and other value-based programs). Disney, through their business practices, is an indicator of inflation, so of course they're not worried since they are primarily responsible for creating inflation (at least in the theme park market).

November 11, 2021 at 8:18 AM

My last visit under FastPass+ was two years ago, and it was a delight. I got my 3 rides for each park reserved 60 days out, and I built enough flexibility into the time so we could sleep in, get to the parks after noon, and spend a leisurely day enjoying the rides and attractions on our schedule. We also had sufficient time to coordinate our plans with extended family.

Move forward two years and everything is a disaster. Last minute, stressful coordination with everybody on where we go next. Too much unneccessary walking back and forth across the park because we tried to get the earliest available Genie+ lightning lane pass of the selections that were still available. Totally, a much worse experience at a much higher price.

I'm really trying to figure out why they call it Genie+ when I only get one wish versus three wishes.

November 11, 2021 at 12:41 PM

My only big problem with Genie+ and Lightening Lane is the amount of useless rides its good at. When it gets super busy and all you can get at Epcot is Figment, Nemo and Film Festival than its a huge waste and a scam. They should've reduced the number of attractions that offer it to only Mid Range to Top Tier popular rides

November 11, 2021 at 1:23 PM

@JK - But if they did that, then a bunch of people buying Genie+ wouldn't get any LL attractions. After all that's why WDW had so many more FP+ attractions than Disneyland. WDW had to equip all those rides with FP+ so the guests reserving their attraction 30-60 days in advance had SOMETHING they could pick. FP+ reservations for the top attractions (FoP, Everest, 7DMT, Soarin', Frozen, and SDD) were typically gone the second the 60-day window opened. Now, Disney typically limited the number of reservations available at each of the windows, but the fact remains that having FP+ on attraction like Living with the Land, Dumbo, Monsters Inc, Dinosaur, and Winnie the Pooh were necessary to satisfy guests who were late to the party (i.e. didn't know how to work the FP+ system).

You're seeing the same impact with Genie+ (and ILL), where the early bird gets the worm (a philosophy I typically endorse FWIW), but the playing field is more leveled because you cannot make those reservations so far in advance. Therefore, having lesser attractions on the system is essential to give guests spending the $15/person/day some semblance of value.

I expect WDW will continue to tweak the system, and guests will start developing strategies as fast as Disney changes the rules. The only problem now is that money is on the line with Genie+ and ILL, whereas with FP+, the cost was part of the admission, so there was not the same level of expectation as there is with a pretty similar system that is an upcharge.

November 11, 2021 at 1:42 PM

The system is already being gamed. Already I have seen the “stacking” strategy discussed, and most recently an article that shows there are specific times that more LL availability is being released.

November 11, 2021 at 2:13 PM

"...nearly one-third of park guests upgrading to Genie Plus," CEO Bob Chapek said....

Assuming the statement is true, I would be curious as to what one-third really means. Is that 1/3 of guests on any given day, 1/3 of guests used it everyday of their trip, 1/3 of guests used it at least once, etc.

November 11, 2021 at 2:59 PM

My reading of that statement is that 1/3 of the guests in the park on average are upgrading to Genie+. What would be more valuable is how many guests are paying for ILL, and how many of those max out at their 2 attraction limit and whether they are also buying Genie+. If initial reports and estimates from the fan sites and park observers are true, somewhere between 20-25% of guests are "maxing" out these upcharges and paying an additional $35-45, an effective 25-30% increase on their base admission cost (if you assume the cost of FP+ was included as part of admission to WDW before the pandemic).

November 11, 2021 at 7:01 PM

It's great Disney has success in giving less for more. It proves that they can still get away with it and can continue their eventual downfall.

November 11, 2021 at 8:11 PM

And after all this, the stock price still went down 7% today, something is brewing

November 12, 2021 at 2:20 AM

O T, five years from now, tell us again about Disney's "eventual downfall." Then, five years after that, and ten years after that, keep repeating the same meaningless phrase, while Disney continues to rule the theme park industry.

I'm surprised that Disney has seen such a fast recovery to revenue and profits near pre-pandemic levels. They did it mostly with Americans visitors, since international travel is only slowly coming back. A paid fast pass system has certainly helped extract more cash from guests. My question: are theme parks still limiting capacity?

November 12, 2021 at 1:59 PM

Well, if You increase price, plus implement several cost cutting strategies ( by gutting several hotel guests perk that were included into the hotel cost or the park ticket cost ) plus not having several shows or services that requires special staff ( not paying those salaries ) and implementing per event or ride on demand add-ons, plus a very good influx of old and new clients atractted by new rides and the anniversary celebration, sure the profits per guest MUST be on the increase. No doubt.
The challenge is to See how long Will the current trend keeps on going. A couple years easily as the anniversary keeps going. After that a lull, but the prediction ( mine of course ) is that long time costumers ( and their families ) Will reduce visits, and therefore reduce income.

November 12, 2021 at 1:59 PM

Well, if You increase price, plus implement several cost cutting strategies ( by gutting several hotel guests perk that were included into the hotel cost or the park ticket cost ) plus not having several shows or services that requires special staff ( not paying those salaries ) and implementing per event or ride on demand add-ons, plus a very good influx of old and new clients atractted by new rides and the anniversary celebration, sure the profits per guest MUST be on the increase. No doubt.
The challenge is to See how long Will the current trend keeps on going. A couple years easily as the anniversary keeps going. After that a lull, but the prediction ( mine of course ) is that long time costumers ( and their families ) Will reduce visits, and therefore reduce income.

November 12, 2021 at 1:59 PM

Well, if You increase price, plus implement several cost cutting strategies ( by gutting several hotel guests perk that were included into the hotel cost or the park ticket cost ) plus not having several shows or services that requires special staff ( not paying those salaries ) and implementing per event or ride on demand add-ons, plus a very good influx of old and new clients atractted by new rides and the anniversary celebration, sure the profits per guest MUST be on the increase. No doubt.
The challenge is to See how long Will the current trend keeps on going. A couple years easily as the anniversary keeps going. After that a lull, but the prediction ( mine of course ) is that long time costumers ( and their families ) Will reduce visits, and therefore reduce income.

November 12, 2021 at 4:49 PM

Funny thing... McCarthy didn't mention anything about the endless desert parties at excruciating upcharges and the 2 inch cupcakes with 4.5 inches of sugar on top. If you wanted to watch peoples waistlines, maybe you should cut back on all the sugar you are shoving down guest throats? What about all the Alcohol and did Disney get a load of gummy worms by accident, because they seem to shove them in every hard liquor drink?

Maybe you should post the calorie counts on every menu in big text?

You certainly have no problem slimming peoples walletline...

November 14, 2021 at 10:14 AM

Even with lower crowds and no international travel, Disney has made a profit through higher per capita spending. Disney's long-term goal has always been to turn the parks into an exclusive luxury brand. As a business, that's their prerogative to do, but it does mean an increasingly less consumer-friendly atmosphere, especially for middle-class families.

November 15, 2021 at 4:14 AM

for sure you need help for assignment to keep current trend going on right and it would be coming as a challenge because I can sense that the whole system is already going to be just gamed

November 15, 2021 at 12:11 PM

Saw the word "downfall". I really don't see that. What I do see and Disney has admitted this to some degree, is falling into a permanent cycle where they will have to find new customers. Chapek has already said over 40% of magic key holders are "new" customers. I think we will cycle through magic key holders as they will find it hard to justify price compared to value.

I think we will see (and we have already) other theme park companies attendance increases while Disney levels off or right sizes. (I think Russell Meyer and A.J Hummel have already sited/expected these trends)

When they cycle through all the "new" customers in the next 3 to 5 years, I really think that will tell us what the trends will be going forward.

I think the casual Disney customer has grinded to an end while the repeat Disney fan finds that they will need to change daily visits to monthly visits. While the Annual visit may now be 3 to 5 years. If it stretches into a 5 to 8 year trend that's when you know Disney went too far.

Keep hearing the phrase "Double-Income No Kids" if that trend starts to emerge as the dominant customer, they will ultimately affect there bottom line.

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