They’re No Sports Center, But Disney’s Theme Parks are Producing Surprising Highlights
The summer vacation season draws to a close this weekend. But that means it’s almost time to book those winter vacations and spring break trips to Disney World (DIS). And that helps explain the unbreakable theme park business, one piece of the magic of Disney.
One might think, or at least I thought, that a major recession and high unemployment would keep people from spending what they have at expensive Disney parks and resorts. But in Disney’s annual filing from last November, things looked surprisingly positive. Parks and resorts brought in 29% of revenues and 18% of profits. The revenue grew 10% last year to $11.8 billion. Its operating income was up 18% to $1.6 billion.
Attendance was up 1%, but those visitors spent 8% more at the parks, in the hotels, and on Disney’s new cruise ship. The average hotel guest spent $241 (per room), up from $224 the prior year.
That was almost a year ago, but quarterly reports seem to indicate that this year has been just as good or better. Revenues and income for the parks and resorts division grew 10% and 18% in the first quarter; 10% and 53% in the second quarter; and 8.5% and 21% in the third quarter.
Disney, as YCharts has explained, owes much (maybe even most) of its success to ESPN, but the parks business has proven resilient. When the economy soured in 2008, it lowered prices to keep people coming. And since then, it has been plowing money into the business, taking advantage of low labor and material costs. It’s building or has built new parks and resorts in California, Hawaii, Florida, Hong Kong and Shanghai, which will presumably capture some of China’s but still-booming economy.
It’s hard to explain the draw of Disneyland. Its voiceless characters roam around, food costs four times as much as it does in real life, and you may spend hours in line for a brief ride. But Disneyland and its brethren seem like a gosh-darned bellwether.
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