No, you were not imagining those bigger crowds when you last visited a Disney theme parks. Nor were you wrong to think that your wallet was thinner when you got home. The Walt Disney Company today reported double-digit growth in revenue and profit in its theme park division in its last fiscal year, led by increases in attendance and guest spending.
From Disney's Fiscal Year 2018 Earnings Report [PDF]:
Parks and Resorts revenues for the quarter increased 9% to $5.1 billion, and segment operating income increased 11% to $829 million. Operating income growth for the quarter was due to an increase at our domestic operations. Domestic results reflected the comparison to the adverse impact of Hurricane Irma, which occurred in the prior-year quarter.Higher operating income at our domestic operations was primarily due to increased guest spending and attendance, partially offset by increased costs. Guest spending growth was due to increases in average ticket prices for theme park admissions and cruise line sailings, food, beverage and merchandise spending and average daily hotel room rates. The increase in costs was primarily due to labor and other cost inflation, a special fiscal 2018 domestic employee bonus and higher charges for project abandonments.
Operating income at our international parks and resorts was comparable to the prior-year quarter as growth at Disneyland Paris and Hong Kong Disneyland Resort was offset by a decrease at Shanghai Disney Resort. Operating income growth at Disneyland Paris was due to an increase in average ticket prices while growth at Hong Kong Disneyland Resort was due to higher occupied room nights and attendance growth, partially offset by cost inflation. The decrease at Shanghai Disney Resort was due to lower average ticket prices, partially offset by increased attendance.
"We are very pleased with our financial performance in fiscal 2018, delivering record revenue, net income and earnings per share," Disney Chairman Bob Iger said. "We remain focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business, including the highly anticipated launch of our Disney-branded streaming service late next year."
Disney revealed today that its Netflix-style streaming service would be called Disney+. In a question and answer session with Wall Street analysts, Iger also looked forward to the opening of Star Wars Galaxy's Edge at Disneyland and Disney's Hollywood Studios at the Walt Disney World Resort next year.
"These are the biggest lands that we have ever built," Iger said. "In both cases, not only are they big in size and scale, they are huge in ambition in terms of both the experience we aim to create, meaning the immersive experience, as well as the specific experiences people will have in the attractions... two very innovative, and we believe compelling and exciting, E-ticket attractions.
"We think they are going to have a major impact. At Disneyland, clearly, it's the biggest thing we've ever done since Disneyland opened in 1955 [nice dig at California Adventure there - Ed.], and we think it is going to drive huge increases in demand. I think we are going to have some interesting challenges on our hands to manage that demand, but that's good problem to have.
"And then in Florida, you know we have four parks. Star Wars land there is going into the Hollywood Studios park, where we opened Toy Story Land not that long ago and we've aimed to actually grow the attendance to that park, which has lagged a bit over the last number of years because we haven't invested anything that is this close in size or scale or the compelling nature of it. So we think in both cases they will have a dramatic impact positively on both businesses."
Iger also spoke to relatively soft numbers from the Shanghai Disneyland Resort in Disney's annual report.
"Sometime in mid-to late fiscal 2018, we saw some softness in the tourism market in China — by the way, not just for us but across the board — and we basically put in place some discounting, some lower pricing, to continue to drive attendance during what we saw a somewhat of a downturn," Iger said. "But we didn't necessarily think it was permanent. We've subsequently taken a lot of those promotions or price discounting off and the results actually have been good, but I think what we are seeing in China is maybe a slight reduction in consumer confidence and that's having an impact on the business somewhat. But we still believe very, very bullishly in not only the business we built but in the business we can continue to invest in."
"We have plans for continued expansion, both in attractions and ultimately hotels, but we haven't made any specific announcements about that yet. But we still fell great about that market for our theme park business."
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Well it is the best and most successful theme park/resort model in the history of the planet so ... No surprise, I guess.
Is this the first full year the cruise ship numbers are included with the theme park numbers?
The thing that stuck out to me was how he really downplays anything negative.
-a slight reduction in consumer confidence.
-an impact on the business somewhat.
-somewhat of a downtown.
-we saw some softness in tourism.
-(speaking of attendance at DHS)...which has lagged a bit.
As for the dig at California Adventure, I think that's only if you take him to mean "The Disneyland Resort" and not the Disneyland park. It is the biggest thing to happen at Disneyland park since it opened. Otherwise, I think he might have mentioned Cars Land as the last huge thing to happen there.
To answer OT's question, nope, Disney Cruise Lines has always been part of Disney's theme park division. While Disney Parks & Resorts now added "Experiences" to its moniker, it still includes all of the theme park destinations (Except for Oriental Land Company's Tokyo Disney Resort, which isn't owned by the Walt Disney Company), the Disney Cruise Line, Disney Vacation Club and Adventures by Disney and the Walt Disney Travel Company.
Disney's attendance and revenue increase was brought to you by the "strong" debt-based US economy that is currently raging. Smoke and mirrors and credit cards and equity loans. Record low unemployment, yet household debt is at an all-time high. It is complete madness. If the economy is really as strong as is being portrayed, household debt would be going down. Economic fundamentals have been abandoned to feed the beast for a few crumbs. Wait, I've seen this story before and it doesn't end well.
/\ Good point, but we saw during the last recession Disney does fine during recessions (not saying they didn't take a hit, but Disney and theme parks in general took much less of a hit than most other sectors of the economy).
They made money like they always do of course.How about giving us consumers a break.
For example stop raising their prices every so many months, seems Disney creeps their prices on everything every year. Maybe not all at once but if you follow different websites you see this month food goes up, now charge for resort parking this month, oh wait general parking increased, hotel rooms etc.etc. it's getting monotonous Disney is not losing any profits at all in my opinion. Give the consumer who wants to go but cant afford to a break.
Reducing Prices = Increasing Wait Times at Attractions.
Prices go up and attendance goes up - this is amazing!
And the most amazing thing of all is that Disney is rapidly becoming a recession-proof company by focusing on the upper middle class and the upper class who will have the resources to still travel and spend money during an economic downturn. The way they are structuring their products and offerings, it might even be possible for Disney to have an attendance and revenue increase during a recession as people look for an escape from the negativity of everyday life.
We hear about lifestyle brands all of the time, but I think Disney has become THE lifestyle brand for millions of people worldwide.
I don't like price increases as much as the next guy, but TH is correct: if the parks were any cheaper, they'd be even more hectic.
@TH and James
Reducing admission cost might increase attendance/lines, but that doesnt necessarily pertain to the cost of food/drinks etc inside the park.
I just got back from another (26th) 8 day vacation to Disney World. It was far more crowded than ever before. It included the last 5 days of the Food and Wine Festival. The Food and Wine Festival was nothing more than a way to get more people in,m and charge a lot for the small portions.
Food prices are not only high, but a Hot Dog, French Fries cost $14.99 (plus tax). The Hot dog was horrible. It was like biting into shoe leather.
The rides and shows were very crowded. The WiFi was very slow! Accessing the fast passes didn't always work.
OK, Prices go up, attendance goes up, and service goes down. Another Disney Success.
I'm still a Disney fan. I go back again in January.
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Studios were forced to give up ownership of their own theatres in the Hollywood Antitrust Case of 1948, how then are the studios now allowed to distribute their own content by owning their own streaming services?