Disney is having attendance issues with its U.S. parks, but the company seems unconcerned.
Storm clouds over the Magic Kingdom…
On August 7th, the Walt Disney Company released its latest earnings report. Disney Chief Financial Officer (CFO) Hugh Johnston appeared on CNBC’s well-known Squawk Box program to discuss the report. During a wide-ranging interview that touched on subjects ranging from streaming to theatrical films to the upcoming sports bundle Venu service, the executive made some interesting comments about the company’s domestic theme park business.
As part of the latest earnings call, Disney revealed that demand for its domestic parks had been “flat,” leading CNBC’s host to refer to them as a “challenged business.” In response, Johnston said that Disney had actually grown “the business in the quarter — it’s a little bit short of expectations” and that the theme park business “is in a fundamentally healthy place, it’s just a little bit softer than it was before.”
©The Walt Disney Company
He further elaborated on current American spending habits in light of current financial trends, saying, “Obviously, the U.S. consumer is a little bit soft. But in reality, people will tend to hang on to their vacations quite strongly because it’s an important part of the family unit.” He also noted that the company believes that higher-income consumers are traveling internationally much more than domestically right now but that Disney thinks said trailers will “eventually” come back.
EPCOT
Later, Disney executives doubled down on this new trend when commenting on upcoming Q4 expectations, saying, “I think, again, we are going to be pretty consistent with what we saw in Q3. We talked about the fact that the lower-income consumer is feeling a little bit of stress. The high-income consumer is traveling internationally a bit more. I think you’re going to see more of a continuation of those trends in terms of the top line.”
Walt Disney Company Headquarters ©LA Times
Overall, Johnston attempted to put a relatively rosy spin on the numbers, saying that the company thinks that “this is just going to be a few quarters, and we’ll be fine coming out of it” as the parks business tends to get “hit late,” “hit less,” and “recover early” thanks to Disney’s well-known intellectual properties.
CNBC
Discussion of Disney’s parks ended with Johnston proclaiming, “I do believe the parks business is fundamentally in good shape.”
Disneyland
Disney’s CFO Hugh Johnston spoke about the flat domestic theme park business detailed on the company’s most recent earnings call, attributing the numbers to current “soft” American spending habits and higher income travelers taking more international trips right now, and expressing that Disney believes both of those are short-term trends. Stay tuned to DFB for further coverage of Disney’s current financial situation.
Disney CEO Bob Iger Predicts Theme Park Attendance Will Go DOWN & Here’s Why
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Do you believe the “flat” nature of Disney’s domestic U.S. parks is temporary, or is there a later problem than what Disney is saying? Let us know in the comments below.
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In an email where one of the articles details upcoming price increases, you have an article about how lower income consumers are not coming. Why is this a surprise. I’m retired and would love to go to Disney with my grandchildren. For what it cost to go to Disney for 4 days, I can go to a lot of destinations for 10 days. Disney needs to be careful because I think that there is a lot of lower income consumer debt that is coming to a head.
“Lower income people are a bit stressed”??? No s***, Sherlock! So how much does this exec make so he has no comprehension of reality right now??
Bob and Hugh, could it be that you are pricing yourself out of the American middle class?
I am sure there are a lot of reasons for the flat attendance in Disney Parks, but the execs are oversimplifying the situation to ease fears of investors. Walt & Roy created the Parks at a time when the American family was much different than it is today – and there was nothing else like Disneyland at the time. Apparently, amusement parks have been around since 1583, but how they evolve and respond to cultural trends dictates their lifespan. Most important, is customer service, and by openly identifying – and prioritizing – “higher income” from “lower income” visitors is a major breach of that commitment to customers.
Save for the 4 day trip and take your grandchildren. I did and you will forever have those memories. Take lots of pictures. Plan a lot before you go so you know where to get pictures with characters, where to eat affordably, etc. You won’t regret it. I think everybody should visit Disney at least once in their lifetime. It’s the American way.
maybe if they made the parks more accessible to lower income consumers instead of catering to the rich with their greedy and exorbitant pricing and their worsening nickel and diming, they’d see higher attendance <3
I used to travel from California to Disney World twice a year, for 2-3 weeks each time. Haven’t been back since the pandemic, and have no plans to go back. The perks have gradually dried up, being replaced by extra charged options. The price gouging by Disney is just ridiculous. Just heard about an $8 single scoop of ice cream in the France pavilion. Agh! Was always a costly vacation, but used to be worth it.
How ignorant! Lower income people are not stressed to the point that they’re changing vacation plans. DISNEY isn’t even on their/my radar! You’ve been dropped 2 years ago because of the ridiculous pricing. Your pricing model seems like the same verbiage used by the Federal Reserve.
LOW INCOME PEOPLE NEED NOT APPLY.
WE DON’T EXIST.
They are pricing out the middle/lower class travellers that would like to visit regularly to where they can only afford to come every few years. I’m travelling from the UK and this will be our first trip in 9 years (mainly due to 2 cancellations during covid) and from the trip 9 years ago the cost of the holiday for the same number of nights has gone up almost 50% and that is dropping from a deluxe to a moderate and getting less “magic” from Disney with regards to what you now receive as a resort guest.
They were always going to cash in on the uptick in travel after the pandemic but it has got to the point now where the cost of visiting there has vastly outpaced the consumers pay rise
I am retired and could be considered low income. I started going to DW for the first time on our 25th anniversary. We loved it so much that we would save up to go for our anniversary every few years. We loved it since the vacation started when we went to the airport, from that point on we didn’t have to do anything but relax all luggage handling,transportation, fine food not fast food,etc was taken care of. Once the perks were were gone and we had to make our own arrangements it was cheaper to go to other resorts and enjoy the relaxing atmosphere,fine food and many times oceanfront rooms at a cheaper price. No wonder higher income people are traveling internationally
A little stressed? These people are so out of touch. We are STRUGGLING to make it in this insane economy. It makes me ill to hear them speak like it’s no big deal.
For Dan R. from the UK: Is Disney Paris closer to home or is it just as expensive? Maybe you like coming to the U.S. I’m trying to understand each person who comments here. I will once again suggest you look into the Vacation Club. I don’t know how much you spend to get to WDW for 2 weeks, but you should see if being a member of the Disney Vacations Club might save you money. It depends on how many people you travel with and how many you can squeeze in a room. There are annual dues, but you can spread them out monthly. I urge you to do the math. If you really like coming to WDW annually (as I do) the Vacation Club is a good deal.
Let’s be honest. It is cheaper to go to Tokyo Disney and the park is better. Us parks are 3rd rate to Japan and China. The US hasany wonderful natural wonders that make great familyemories at over 1/2 the costs.
Disabled people are canceling vacations at a higher rate than ever before. They are also selling DVC and not renewing APs. People from Europe are not traveling to Disney anymore because of the DAS either. Disney is starting to feel it but won’t truly see for another year.
A little stressed????? I have had the same job for 22 years and twice in 2023 I had my hours cut from 40 to the current level of 24 per week. I lost more than 1/2 of what I was bringing in per month and now find myself having to use my credit cards like so many other American middle class families just to pay bills. I lot my insurance and had to go onto Obamacare, which costs me $80 per month because I still make too much to qualify for the freebie. I wanted to take early retirement, but my savings has been depleted to the point that I can no longer consider this, but am currently looking for supplemental income sources! my side hustle has not taken off yet, as most businesses take 3-5 years to make a profit. Yet Disney does not care that Walt intended the Parks to be somewhere that FAMILIES could go to enjoy laughter and fun! I will somehow continue to renew my annual pass each year for the simple fact that I have grandchildren whose faces I want to see enjoying Disney, but our trips will be fewer and shorter! If only Disney would think about the elderly with Discounts, and our government think about the lower and middle classes, then more people would be able to afford to take their loved ones more often!
Coral, well said!! And, elections have consequences!
Truthfully, it is still hard to wrap your head around a park ticket for a child aged 3-5 for only $10 less than the adult ticket of $150 Try doing that one with a new little family. They are outpricing themselves, without discounts, or specials. They seem to be catering to the adult crowds and not children for example, adding a bar inside Magic Kingdom, and pushing the alcohol in Epcot. I have witnessed drunk patrons and obnoxious behavior around little kids its too much. They need to circle back to the way it used to be… for the children, not for the bizarre agenda.
Making passholders ask permission is a big issue. We all have a way to retaliate! Don’t spend $$ inside the parks! On a “good after 2:00” day instead of arriving late morning and eating lunch at Seasons in Epcot or Harbor House in MK; we eat along 192 at table service restaurants—and get to the park at 2:00–this also goes along with dissing table service inside WDW which is too expensive and needs to be reserved too far ahead.
Long time AP here. I’ve been visiting Walt Disney World for my entire life, almost 50yrs. I will not be renewing my AP next year. I love you Disney but I must say good bye now. I can’t afford you anymore!