Disney's theme park segment saw a strong start to the company's 2025 fiscal year, led by the international parks. Disney this morning reported its corporate earnings for the three months ending December 28, 2024.
The company's Experiences segment - which includes the theme parks and Disney Cruise Line - saw a 3% increase in revenue, to $9.415 billion. Operating income ticked up slightly, by $0.5 million, to $3.110 billion.
The international parks carried the segment during the quarter, with higher attendance and per capita guest spending pushing their operating income up 28%. Attendance was down at Walt Disney World, however, due to the two hurricanes, including one that closed the resort for a day and saw the cancellation of a Disney Cruise Line sailing. Disney also reported higher costs in the segment due to the Disney Cruise Line's expansion, which saw the Disney Treasure launch in December.
"Domestic Parks & Experiences operating income declined 5%, reflecting a 9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses," Disney said in its earnings report.
Nevertheless, Disney said that it anticipates 6% to 8% operating income growth for the Experiences segment in its 2025 fiscal year, which runs through the end of September. During that time, Disneyland will kick off its 70th anniversary celebration in May, and Hong Kong Disneyland will open its 20th anniversary party this summer. And, oh yeah, Universal is opening a new theme park in Orlando, too.
"Our Ql results for our Experiences segment demonstrated Disney's strong and enduring appeal in family travel," Disney CEO Bob Iger said. "We continue work on a robust slate of new projects as we bring our most popular IP to life in innovative ways and execute against a carefully designed and planned investment strategy. We also remain deliberate about pricing and the guest experience, and are focused on providing guests great value with a vast array of options to visit our theme parks."
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I was debating if I should write this or not because I didn't want to start a big political thing on here but I think its worth mentioning. As a Canadian I wouldn't discount the backlash the US is currently receiving. It is by far the worst I have ever seen here and there are many cancelling plans to visit in the near future. With the lower value of the Canadian dollar its making it that much easier to justify cancelling a trip.
I'm lucky enough that the exchange rate is not an issue for us but we have cancelled our February trip due to friends insisting and are now going to Mexico instead. Our October trip is also up in the air and not sure we will go either.
I doubt that Orlando will see much of a slow down since any decline in Canadians visiting will probably get taken over by domestic travel once Epic Universe opens but until then I wouldn't be surprise if there is a noticeable slowdown.
Duffy and Friends carrying the Experiences division this quarter.
Orlando (and Walt Disney World in particular) has become such an expensive prospect that I wouldn't be surprised if those who used to do once a year trips have changed to going once every several years. On top of that, the experience just isn't what it once was due to operational decisions that have been made by Disney following the pandemic closures, so I could easily see those who aren't quite as strongly into the Disney experience opting for other vacation destinations instead. I personally have not visited WDW since 2021 (or Florida since 2022), and given my experience on those trips combined with doing a Japan trip in 2023 for less than a similar length trip to Central Florida would cost (even including airfare), I'm not overly keen on spending cash to return to somewhere I've visited several times over going somewhere new.
I’ll always love WDW but the international parks are much more appealing at the moment.
I’d also be much more interested in planning a trip to Universal Japan over visiting Epic Universe.
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I have little doubt the hurricanes impacted revenue a bit, but as was evidenced in Universal's financial results, there's something more going on in the Central Florida market to see that much decline year over year. Whether that is an overall slowing of the market compared to the "revenge travel" of 2022 and 2023, or a temporary pause in preparation for the debut of Epic, I don't think declines of that magnitude can be explained away by a couple of hurricanes. I think the next 2 quarters will be very telling in what is happening in the Central Florida market, and whether the investments vigorously being pumped into the region will pay dividends.