Continued improvements at Disney's international theme parks helped drive Disney's Experiences segment to higher revenue and income in the past three months, the company reported this morning.
Disney's Experiences segment, which includes the theme parks and Disney Cruise Line, reported revenue of $8.39 billion for the three months ending March 30, 2024. That's up 10% from the same period in 2023. Operating income was up 12% for the quarter, to $2.286 billion.
The International parks in Paris, Hong Kong and Shanghai led the segment, with 29% growth in revenue and 87% growth in income for the quarter. Disney also noted strong results at Walt Disney World in Florida, though it also noted lower results at Disneyland in California. Disney said that attendance was up at Disneyland, but lower occupied room nights and inflation offset those gains.
"Looking at Experiences, which remained an impressive financial driver in the quarter, we're focused on turbocharging growth for the number of long term strategic investments," CEO Bob Iger said. "That includes our Disneyland Forward initiative, the first step in our expansion plans at Disneyland Resort, which received unanimous preliminary approval by the Anaheim City Council last month. This was a significant milestone, and the final vote is expected to take place this evening. We are incredibly excited for the many potential new stories our guests could experience at Walt's original theme park, including the much anticipated opportunity to bring Avatar to Disneyland."
Disney officials also said that while the company's resorts are seeing healthy demand, Disney is seeing some evidence of a global moderation from peak post-Covid lockdown travel.
"The parks business did 10% growth in the quarter and obviously that's an extremely high revenue number, CFO Hugh Johnston said. "That said, we still see in the bookings that we look ahead towards indicating healthy growth in the business. So we still certainly feel good about the opportunities for continued strong growth."
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Yeah, it kind of counters thecolonel's assessment that the political climate in Florida is impacting tourism. It seems that constantly refreshing parks and building new attractions that people want to experience (and travel for) are more important than the political leanings of a state's government.
I also think this particular report is still a bit deceptive, because the Asian parks were still recovering from COVID in 1Q-23, so year over year comparisons are a bit unfair. Also, Disney's Asian parks have debuted some of the highest profile additions in the world over the past 6 months, so the bump from those openings have obviously skewed the numbers for those parks. I think 2Q-24 will be pretty telling as the Spring Break letdown and summer ramp-up will show how strong the US theme park markets are right now. I still think we'll see the international parks gaining more steam and the domestic parks staying relatively flat or slow growth with so little on the horizon for the rest of 2024 and the general travel trend towards international destinations this summer.
Russell: "It seems that constantly refreshing parks and building new attractions that people want to experience (and travel for) are more important than the political leanings of a state's government".
Me: Which is why you have to know that we will see a wave of new attractions announced at D23. And (again) since there are only a few big construction projects coming out of the ground is gonna buy hard. Once they lock down the big GCs, Comcast, on the other hand, is gonna face challenges finding competitive prices to buy a new e-ticket.
TH, can you provide an interpretation of your second paragraph? I'm guessing that GCs are general contractors, but I can't figure out the rest of what you're saying.
I think what he's saying is that if Disney puts on a big push for expansion, they're going to gobble up all the contractors that perform this type of work, making it more difficult and more expensive for Universal to find contractors to work on future projects that may not even be through the development stage yet. I'm sure Universal is also probably fighting the contractors currently working on Epic Universe who are probably trying to get change orders due to cost increases caused by delays from the Pandemic. I wouldn't be surprised if there are some contractors that might not want to work on another Universal project right now, especially if they can just go and work on a Disney project.
Sounds like Disney is acknowledging that revenge tourism was a factor in such high numbers the past couple of years and they can't count on that going forward. Given the general sense of dissatisfaction I've heard from many with Disney visits these days, it will be interesting to see if we wind up getting nearly flat numbers or if there's an actual decrease later in the year. California is also going to be interesting because a lot of people are declining to renew Magic Keys, and those guests make up a pretty significant portion of visitors to the resort outside of peak travel periods.
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This looks like the opposite of Universal's performance domestically, with Disney's Florida location doing decent and their California location experiencing some softness.