Tuesday, February 14, 2017

Disney reports declining attendance, but it doesn't really matter because guests keep spending cash

Posted By on Tue, Feb 14, 2017 at 10:49 AM

click to enlarge PHOTO VIA WIKIPEDIA
  • Photo via Wikipedia
After a 52-week high at the end of January, Disney gave a mixed bag of first-quarter results for 2017.

While other parts of the company were propped up by the blockbuster juggernaut Rogue One: A Star Wars Story and pulled down by ESPN, the parks and resorts division was a shining star despite some lower than expected earnings.

Parks and Resorts was the only section of Disney to see positive revenue for the quarter. Coming off a 2016 financial year that saw the opening of the massive new Shanghai resort, expectations were a bit rougher this quarter than typically. However, all seemed to be pleased with the $4.56 billion in revenue and $1.11 billion in operating income that the division reported.

Just as many had reported, both attendance and occupancy were low for the quarter. Disney pointed to Hurricane Matthew in part for that dip. This is the fourth straight quarter of year over year declines in attendance at Disney parks. Despite these drops, the Parks and Resorts division saw the largest operating income in the past five years this quarter thanks to increasing per guest spending. Per guest spending has seen nearly consistent rather impressive increases in recent years.

Disney has launched numerous up-charge events and offerings over the past few years. These offerings range from Express bus service for $15 to a $15,000, 12-person meal in Disneyland.

Many of these offerings are listed as limited-time tests. The most popular ones seem to be semi-permeant offerings moving forward. Disney CEO Bob Iger did signal towards the end of last year that we could potentially see new hotels being built, calling the move “smart” for both Orlando and Anaheim.

The rumors here in Orlando consist mostly of new Disney Vacation Club villas, the timeshare cash cow for Disney, with rumored updates coming to numerous hotels at Disney World. None of these updates or new hotels have yet to be confirmed.

For now, we can only look at the ticket increases (yet again) as the best indication for another positive quarter.

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