Disney's Theme Parks Report Big Financial Results

In related news, Chapek's head got 73% shinier than it was in 2021.

Disney runs a machine everyone. People vote with their dollars and they have voted indeed. Disney's theme parks are in incredibly high demand and they are getting handsomely compensated for it. They are cutting back on things and raising prices but in a business sense it is working because people are still flocking to their parks and resorts to buy their product now more than ever it seems.

I'm amazed how people will line up hours and get into minor scuffles to pay for overpriced Disney merch such as popcorn buckets, Halloween themed stuff, and such. I went to Disney World last month and I was hoping to purchase Individual LL for Rise of the Resistance. It sold out in a minute! It cost 15 bucks a pop and it sold out just like that.

They have a heck of a business. Nothing will change until people stop going and I just don't see that happening.

Hey, hopefully this means that they'll invest more money into new and upcoming products, services, and experiences. Putting more time, effort, and money into their employees, newer attractions, and the guest experience.

...Most likely not? Hey, I can only hope.

As Chapek stares down online critics, then points and says, "scoreboard."

Today, Hollywood Studios saw multiple 2-3 hour waits for attractions. On Election Day in early November. Maybe they could invest those profits into capacity and entertainment to avoid unacceptable long lines.

The "dad who recently took his family to Disney" in me: I hate the park reservation system, Lightning Lanes, Genie+, mobile food ordering, spending all my time on my phone figuring out what to do next, and making dinner reservations 6 months in advance.

The "marketing professional" in me: Damn, Disney knows how to build and push successful products and services.

"He can't keep getting away with this!"

and yet!

This is a great result for the Disney company. It shows they are on the right track and people want more of it. Expect higher prices for less service, more pay to play "solutions" and less investment in general. Good times for Disney fans as they teach the Disney company what they want.

Sadly I think we are in a situation where we are going to see cuts to the parks, even though they are making more money than ever, to make up for the $1.5 billion that Disney+ lost. Chapek and McCarthy came out and said Disney+ is going to continue to see losses for the forseeable future and Disney's stock is having a big selloff at the moment.

Disney has really become a victim of its own success, and has created a fan base that will do virtually anything to connect with their favorite corporate brand. Disney wields an immense amount of power over the entertainment market, but as Uncle Ben (or Aunt May) said, "With great power comes great responsibility".

Even during the Eisner era (and most certainly during the Iger era), Disney did not exploit their guests/customers/audience to the maximum extent possible, because they knew it was self defeating to chase short term profit at the risk of undermining brand perception/satisfaction. While the pandemic has certainly cast a shadow over virtually every industry, it has disproportionally impacted the travel and hospitality industry. However, Chapek's Disney has chosen to tap into long-earned customer/guest goodwill and positive sentiment to make up for those losses and to drive profits beyond what was the norm for a steady, blue-chip style company. Wall Street definitely has changed the ways in which virtually every company does business these days, but Disney always seemed to strike a balance between keeping fans happy and generating profits. While the pandemic offered cover for Disney to begin tipping the scales more towards profit, the impression is that Disney no longer cares about its fans and it will always choose profit over grooming the next generation of fans.

It took 100 years for Disney to build its current fanbase that would literally hand over their last penny to get a hug from Mickey Mouse, but the company's current philosophy and attitude towards its customers may erode that fanbase and customer sentiment in a quarter of the time it took to build.

Disney always used to act, feel, and behave different than other major corporations, and it resulted in a level of satisfaction and approval unmatched in corporate America. However, in just 5 years, Disney has become just another company that has become a slave to Wall Street and the next quarterly financial report.

/\ The funny thing is the parks fans are coming out and saying "I told you so" when seeing the stock today, but the parks are crushing it. The problem is Disney+, which as far as I know is getting positive reviews from fans, is being viewed by Wall Street right now as a money pit while their old cable business was a profit juggernaut. So the things the fans are complaining about are actually doing well and the things the fans like are causing the stock to go down.

Chapek can scream "scoreboard!" now, but what about in a few years when Universal Orlando finally becomes a full-week resort whereas right now they are more of a diversion to those flocking to Orlando primarily for Disney?

Chapek and company continue to sacrifice the long term for short term gains. His day is coming, and I predict it will be coming in 2025 when Epic Universe opens.

RM: "However, Chapek's Disney has chosen to tap into long-earned customer/guest goodwill and positive sentiment to make up for those losses and to drive profits beyond what was the norm for a steady, blue-chip style company.

Me: It strikes me that Disney almost has to max out its revenue streams to service its debt. After the acquisition of Fox, the company's debt jumped to something like $54 billion. In 2022 that debt has been reduced to below $50 billion. Reducing that burden by turning to the cash cows that are legacy guests does create some long term security, no?

Sure TH, but as the axiom says, "It takes a lifetime to build a reputation, but only a minute to ruin it". Disney has come a long way in their 100 years of existence, but their recent behavior seems to take for granted what it took to reach their height of popularity and success.

It's absolutely essential for a business to erase loses and debts as quickly as possible, but the speed and magnitude at which companies and Wall Street expect to generate profit has gotten obscene (watch a few episodes of Shark Tank to see how demanding investors are in terms of recouping their capital). The lack of patience and compassion it takes to build and develop a business is completely lost on a financial world that obsesses over data and numbers. The love and compassion for everything Disney is not quantified in an SEC filing, but Bob Chapek would lead you to think so because of the company's profits. It's just not that simple, and company with the longevity, prestige, and brand awareness of Disney would have the self-awareness to know what they're doing is not going to yield the best long tern results.

While I agree Disney is a huge mega corporation just like any other, I disagree that the experience right now is worse than it was a few years ago. The reservation system make MK and Disneyland much more enjoyable, they let far too many people in before that and it was consistently a miserable experience. While yes the parks have continued to get more expensive, I think needing a reservation to get into the parks was a perfectly logical thing to do that was way overdue and has made the experience better. Just go on tripadvisor and read the reviews for DL and MK from 2010-2019 compared to now, like every single review from the previous decade says the park is over-crowded.
Of course that pissed all the fans off because they were conditioned to buy an AP and go whenever they wanted and now they can't get in. Hardcore fans don't care as much if the parks are consistently overcrowded but the GP does, I don't see anyone in the GP (far more people than hardcore fans) complaining that they had to make a reservation to get in for the tradeoff of lower crowds.

I'll say it again, over the past decade (except 2020-2021) the parks have carried the company while the media business has struggled to find footing in the new media world. I don't see any evidence that the parks business is going down due to bad press from price raises, if people who can't afford to go are complaining then it doesn't really matter because people that can't afford to go aren't going anyway.

Ultimately what pissed AP holders off was how they are treated as second-class citizens, i.e., when there is available reservations for day and resort guests, but they are not allowed to use their APs unless they are staying at a resort hotel. Being referred to as part of the "unfavorable attendance mix" didn't help, either.

I still get the feeling that Disney's parks are currently enjoying a wave of increased demand due to the pandemic, and as such I don't think the numbers they're currently doing are sustainable. With international travel not really reopening until this summer, I'd give them another year or so before demand wanes and we start to see drops in attendance and revenue. While I'm sure disgruntled APs are likely to contribute to that, I think the bigger factor is that many longtime guests are starting to feel the experience Disney provides is not worth the price they're currently asking for it. With costs easily in the $150-200 range per person per day when all things are considered, and with the parks offering a reduced experience as compared to pre-pandemic, it's easy to see why more and more annual visitors are opting to wait a few years before their next trip and/or shorten their visits. I'm definitely a contributor to that...I've cut my Disneyland visits down to about 1/3 what they used to be, and Walt Disney World is no longer a given on my Florida trips (and if included, it's usually just two days to see the new stuff).

Russell, your first post above is very well said, the best expression of the problem that I've seen. Fully agreed.

@Manny I can relate that I've seen my fair share of individuals, mostly this year surprisingly, of WDW guest squawking it out over limited popcorn buckets, Minnie ears and the 50th anniversary crocs.

isn't going less frequently / spending more money when you go exactly what disney wants?

I think I'd be more likely to buy into the notion that the chickens are coming home to roost for disney if the company was on an island with this business strategy. but we're seeing company after company in industry after industry post record profits by raising prices beyond their increased costs. are the chickens going to come home to roost for everyone? are americans going to buck back on widescale shrinkflation?

or are they going to grumble a little bit and is the economy at large going to choose "winners and losers" while some are squeezed out of premium experiences? I don't know! but if I was a gambling man, I wouldn't bet on americans standing up to corporate profiteering if it means they don't get the stuff they want.

Chapek is saying “scoreboard”? Did you even read Disney’s Q4 earnings report, Robert?

They missed their revenue projections by nearly 6% and their EPS by a whopping 46%. Then the stock fell nearly 13% for its biggest single day loss in 20 years.

I can’t believe how dishonest this article is. I know you want to keep your precious perks by carrying Disney/Chapek’s water, but try to be at least a little less obvious about it.

I mean, operating on the slim chance you're not acting in bad faith: he's talking about the implementation of disney's theme park strategy, which has been tremendously financially successful. the overall financial picture, as has been reported ad nauseam, is muddied by cable, streaming and acquisitions.

he was just making a joke. chill out.

Record profits? Then why is the stock so low? Along with their "Profits", they have irritated so many people with a lack of benefits from those fees. They used to have the Magical Express... guests used to be able to get three fast-poasses per day (free). Now, people pay through the nose. Look at the "success" of the Galactic Starcruiser... It can't keep a full load now. Eventually, the die-hard Disney fanatics will stop coming.

PJ O'Rourke after a visit to Epcot: a land of make believe that's worse than real life.

Maybe the foamers will wake up one day and realise the Mou$e is ruthlessly exploiting them.

Disney has some interesting attractions, but from my personal perspective they aren't worth the effort and expense to get a ride (I'd much rather be marathoning Iron Gwazi anyway). I recall on my last visit in 2017, people were trampling each other in the running of the bulls to the new at the time Slinky Dog. Lol I've played pro rugby, but I feared for some of the less physically equipped. Or we were leaving Space Mountain just when the night parade finished and the rush of foamers coming towards us looked like greyhounds chasing a rabbit.

It will be interesting to see how far Disney customer goodwill will stretch in the longer term, and how much they will be able engage future generations. I'm not particularly invested myself, but I will watch with some interest.