Things are very nearly back to normal at Disneyland and Walt Disney World, with almost everything that the parks opened without during the pandemic having returned in one form or another. One thing that actually hasn’t returned to pre-pandemic status, however, are the crowds. Disney CFO Christine McCarthy recently confirmed that crowds are still being limited, and it sounds like that’s going to be the case for the foreseeable future, because Disney wants it that way.
One might expect that Disney would be counting the days until the parks could be full again, as more ticket sales mean more revenue for the company. It’s why tickets continue to see price increases year after year. But speaking during the recent Morgan Stanley Technology, Media and Telecom Conference, Christine McCarthy said that Disney is planning to continue to manage attendance via the reservation system and may not return to pre-pandemic levels intentionally. Because there’s another way for the parks to make more money, have happy guests. McCarthy explains…
We’re managing the business differently. We’re looking at yield but we also want to, the consumer experience when you’re a guest in a park and you can’t do things, everything is too crowded, your guest experience is going to go down. Your intent to return is going to go down. And word of mouth will not be as good. We don’t want to have the parks bursting at the seams. We want to have them so they are a great experience. And when you’re there, if you’re having a good time, you’re probably inclined to spend more money, and that has been the results that we've had to date since we reopened.
Selling lots of theme park tickets is, of course, an important way that Disney Parks make money, but it’s not the only way, and while being able to crowd the parks with bodies means short term financial gain, Disney also understands there’s a long term game being played here as well, and that long game is potentially harmed by overcrowding the park.
Disney knows that if the parks are too crowded people won’t enjoy themselves, and if that happens, it hurts future earnings. People won’t return, they’ll tell their friends not to go. On the flip side, if you have a good time, you’re likely to be a little freer with your money. This is called “per capita spending,” the amount of money each guest spends while they’re in the parks, and when that goes up, it can more than make up for revenue lost on tickets that were not sold.
This isn’t to say that Disney Parks will never feel crowded again. They already do. Lines can still get quite long, but maybe, in the end, we’ll see fewer days like that overall now that Disney is taking a more active approach to managing capacity, and that’s not a bad thing. The reservation system in place certainly isn’t perfect, and there are some reasons it doesn’t make sense at all, but in this particular regard, it perhaps does have some value.
