The last few months have been rough at Walt Disney World and the Disney Company overall. The resort is currently embroiled in a massive lawsuit against Florida Governor Ron DeSantis. Then Disney laid off 7,000 cast members as part of a plan to reduce costs. And it made the announcement that the highly touted, and clearly very expensive Star Wars: Galactic Starcruiser, would be closing its doors in September. Evidence has also indicated that Walt Disney World, while certainly not a ghost town, is less crowded this summer than we’re used to seeing. And yet Disney’s Parks division actually saw an increase in revenue last quarter. Let's talk it out.
Disney’s Q3 2023 earnings call did, in fact, confirm that attendance and hotel occupancy at Walt Disney World were down last quarter compared to the same period last year. This was chalked up to the fact that Disney World’s 50th-anniversary celebration was happening last year but officially wrapped up a few months ago.
So Why Did The Parks Make More Money Despite Fewer Crowds?
First to note, the Florida-based parks were certainly down in attendance. But there were some bright spots including attendance at Disneyland Resort, as well as the Disney Parks in Hong Kong and Shanghai, which were all up. So when we say the parks are down, what we are really spotlighting is Walt Disney World.
The real revenue increase, however, may have come with Genie+. When combined with an increase in the cost of Genie+ domestically over the last year, the parks division actually posted a 13% bump in revenue for the quarter.
In a time when a lot of Disney’s feature films have not been the massive billion-dollar success that they once were, and the linear cable business has an uncertain future, Disney’s Parks, Experiences, and Products division has been a near-constant money-maker over the last several years. Having said that, Disney did warn investors that it expected the domestic parks numbers to remain soft in the coming months, though they will likely see a boost during the holiday season.
One More Note On Galactic Starcruiser
While Disney World announced the closure of the Star Wars: Galactic Starcruiser recently, the location won’t actually close until the end of September. Not only that, but the two-night Star Wars experience quickly sold out for all its remaining dates after the closure was announced, so we won’t actually see any significant drop in revenue from it until October when it stops making any money at all. It seems there are some plans, or at least ideas, for what will replace Galactic Starcruiser, but whatever that will be is likely at least a couple of years away.
Disney’s international parks numbers have helped buoy the division for some time, and it seems like Disney is going to be leaning on them more and more in the future. New lands are currently under construction, with World of Frozen coming to both Hong Kong Disneyland and Disneyland Paris, while a Zootopia-themed land is set to open at Shanghai Disney Resort soon.
By comparison, after the refurbished Epcot area, known as World Celebration, opens with a new Moana attraction later this year, little is known about what’s coming to the domestic parks. New Avatar and Avengers attractions have been announced for Disneyland Resort, but no work has begun on either one. Disney World has teased a new land at Magic Kingdom located near Thunder Mountain, as well as a replacement for Dinoland U.S.A. at Disney‘s Animal Kingdom, but nothing there has even been officially announced. This means all this is still years away.
