Whether you’re talking about size, popularity, or diversity of experiences, Disney is the champion of theme parks. Another area where that is abundantly clear is revenue. Disney parks raked in five times the dollars of its closest competitor, Universal Studios. The theme parks division of The Walt Disney company has earned $25 billion in revenue so far this year, accounting for almost half of its total income.
But how do the Disney theme parks earn that money? The latest quarterly statements give some insights into where the cash is coming from.
It might surprise you to find out that attendance is not the primary driver of revenue growth at Disney parks in 2019. Sales at Disneyland Resort and Disney’s Vacation Club accounted for most of the growth in the last quarter. While Disneyland attendance did not rise dramatically this year, the amount of money guests spent in the park did. Higher food, beverage, and merchandise spending contributed to the 17% income increase. Makes sense. Disney parks are already crowded year round and capacity to increase attendance is limited. It looks like Disney is seeking to maintain its economic growth by increasing ticket and product prices instead.
How are the Disney World parks faring?
It appears Walt Disney World's growth this quarter is stagnant. Don't worry. The earning potential is still strong and Disney World is one of Disney’s biggest money makers. The flat income of the last quarter is likely a fluke. Walt Disney World saw decreased attendance for about a week due to Hurricane Dorian, which never really made an impact in central florida. This loss, combined with expenses related to the opening of Galaxy’s Edge in Disney’s hollywood Studios hurt the park’s bottom line this summer.
Another sign Walt Disney World is doing well comes from the resorts. High sales at Disney’s Riviera, a timeshare property that opened today, brought in most of the money for the Disney Vacation Club.
Things are not so rosey at the parks outside the U.S. The Disney parks in Paris and Shanghai failed to yield increased revenue over last year’s numbers. The parks in Shanghai and Hong Kong actually saw a decline in attendance and hotel occupancy. Hong Kong Disneyland Resort is getting hurt by the protests that are still ongoing.
If this year is any indication, Disney’s strategy for financial security into the future is clear. Expect rising ticket and product prices to offset limits to attendance growth. More offerings at the resorts are also likely in the future.