Walt Disney Company First Quarter 2019 Earnings report shows gains in the parks and resorts

Feb 06, 2019 in "The Walt Disney Company"

Posted: Wednesday February 6, 2019 10:10am ET by WDWMAGIC Staff

The Walt Disney Company released its first quarter earnings for 2019 yesterday, and the theme parks continued to show an increase in revenues.

Operating income growth was driven by higher results at domestic parks and resorts, through higher guest spending, and higher occupied room nights. Attendance at domestic parks was comparable to the first quarter of 2018, but per capita spending was up 7% due to higher spending on tickets, food and beverage, and merchandise. At the hotels, per room spending was up 5%, and occupancy was up 3% to 94%.

During the earning calls, Disney CEO Bob Iger also mentioned that he expects Star Wars Galaxy's Edge to require very little marketing beyond him tweeting "its open!" Iger also mentioned that Disney will continue to manage attendance patterns through pricing in order to improve the guest experience.

Below is the full Parks and Report section from the report, which you can view in its entirety here.

Parks and Resorts
Parks, Experiences, & Consumer Products revenues for the quarter increased 5% to $6.8 billion and segment operating income increased 10% to $2.2 billion. Operating income growth for the quarter was due to an increase at our domestic theme parks and resorts, partially offset by a decrease from licensing activities.
Operating income growth at our domestic theme parks and resorts was due to increased guest spending and higher occupied room nights. Guest spending growth was due to higher average ticket prices, an increase in food, beverage and merchandise spending and higher average hotel room rates.
Operating income at our international parks and resorts was down modestly compared to the prior- year quarter as lower results at Shanghai Disney Resort and Disneyland Paris were largely offset by an increase at Hong Kong Disneyland Resort. Lower operating income at Shanghai Disney Resort was primarily due to lower attendance and higher costs, partially offset by increased guest spending. Lower operating income at Disneyland Paris was due to increased costs, partially offset by higher average ticket prices. At Hong Kong Disneyland Resort, the increase in operating income was driven by increased guest spending and higher occupied room nights.

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mikejs78Feb 27, 2019

That would be true if prices had been raised across the board by that much - but they haven't been. Guests are spending more - price increases are a part of it, but guests are buying more. The after hours events are very successful, for example.

SirwalterraleighFeb 27, 2019

Preach....because you are correct, reverend. The fact that constant price increases has pushed their “success” for going on 10 years is a huge fail. A fail by the consumer to not push back and keep Getting drunk off the sweet wine. Recessions are the great equalizer...and that was when they guarded against it - which is over. We will need a whole other forum to analyze when the day comes. It will come.

FCivish3Feb 27, 2019

Attendance is really fairly flat, with only slight increases, if at all, but Revenue is up around 10%. That is actually a very large revenue gain. You can't keep that kind of growth up. But ESPECIALLY, because it isn't growth. It is just Disney raising prices and increasing profits on the backs of their visitors. In fact, it seems clear that is actually trying to Discourage increased visitors, and is using higher prices to keep attendance down. Eventually, they will reach a tipping point where most people give up on Disney, because of their extreme pricing, and start spending their money elsewhere. But the trouble is, once that happens, revenue will start to slide and every time they raise rates, it will slide more. Then they will be in a bind, having chased off many of their customers and not having actual growth.

SirwalterraleighFeb 07, 2019

This x1000 Not only are the resorts maxed out...and studios can’t handle 15,000,000 (not even close - actually)...but because in jacking the pricing they Have eliminated a lot of the off property travelers from even affording a visit for more than a day. If you’re paying $121 a night at a Rodeway on Irlo Bronson...are you shelling out what a day cost? Some yes, but a lot no. Disney is a COD and the middle class loses people by the second that don’t have the C. What’s always lost in the quarterlies for 5-10 years is that attendance is Pretty flat in the aggregate. It’s a boom economy for longer than ever in modern times and travel is more and more accessible each year... That alone should put the annual attendance in the 55 to 60 mil range by now. They are toiling in the low 50s still. Why? Several reasons...but two biggies are they’ve overused their resources and not constructed new ones fast enough and they are shrinking their customer pool through pricing. Not at all surprising if you sit up in the nose bleeds And look at the entire field of play.

SirwalterraleighFeb 07, 2019

Agree...Star Wars nuts aren’t gonna care...Californians aren’t deterred by crowds...and WDW will get slammed as much as you’d expect - I just don’t ageee necessarily with the reasons and dynamics and the net results.

SirwalterraleighFeb 07, 2019

Indeed...it’s a debate and a fairly healthy one... But your motivation is that it’s will be crushed in Orlando. My contention is that “crush” won’t amount to what the prevailing thought around here has been. We may both be right. It may be an uncomfortable mess AND not result in huge gains. That is the worst case scenario for Disney. Healthy speculation...the reveal is soon.

LSLSFeb 07, 2019

Ok, so you don't believe that scenario. Honestly I think that is probably the least likely of anything stated. I have a hard time with the thought that people will think WDW will be less crowded. I also don't imagine the die hards (who is where the initial discussion originated with) are going to care if the reports say it is crowded.

LSLSFeb 07, 2019

I think I remember those discussions. Honestly really good points were made both ways. Another thing to consider is if the resorts are already basically maxed out, are they going to be able to handle a lot more people who want to come in. People can stay off site, but as I've stated before, I think that opens up people to going to other parks/things as opposed to staying in the bubble (might lend to the idea of not seeing much of an increase at other WDW parks/more people heading to Universal). Obviously WDW attendance will increase. I'm going to be really interested in how much. Will it be an overall significant increase, or just a small increase with a much different distribution from years past. How many of those people will want to head to Harry Potter after a day at Star Wars? I can honestly say I don't have the first clue as to what will happen, I'm going with a completely open mind on it.

SirwalterraleighFeb 07, 2019

Second period: sophomore English 😉

jt04Feb 07, 2019

I clearly indicated it was a different way to look at the situation. Since none of us has a crystal ball we won't know for sure until later this year.

SirwalterraleighFeb 07, 2019

There aren’t tens of millions of people waiting or planning to see “which way are we going?!?!”.... First, it’s too close now. The die is cast for the first 6 months. Second, geography still determines most of the public’s travel spots. We can’t base this on people Such as us or Disney sycophants. The majority doesn’t compute that way. They just book and go. Third, the Star Wars nuts have decided...so early pub on Disneyland won’t have much of an effect except on the Disneyland local clientele...who don’t typically jump on a plane and fly to the swamp to avoid crowds. Have you been to Anaheim? If they were bothered by crowds they’d run off the Santa Monica pier screaming long ago

LSLSFeb 07, 2019

Wait, you are now arguing against what you said 20 hours ago. You now think attendance will be higher than expected because of DL?

SirwalterraleighFeb 07, 2019

I agree with you completely. Last trip was during New Years crowds - which I hadn’t done in 15 years - And I spent a good amount of time in mgm looking at the flow and crowd swells during a busy week (yeah...that what I do for fun instead of after hours magic and waiting standby for mine train 🤪 ). I think I said this on a thread: i’m convinced there is no physical way for them to handle more than a 10-20% influx in that park. They simply haven’t expanded the footprint enough. People will defect. Star Wars is powerful...but not enough to force people to tolerate the sardine canning process. So a couple million spread out over the calendar...basically the avatar influx level, but dak has the size. We shall see...it’s a fascinating social discussion until it opens. But I’m not alone...I’ve seen Marty support a theory similar to this...but he’s busy now doing the most vague carrot dangle I’ve ever seen to the lemmings (it’s shameless...I love it 😂 ), so I won’t tag/bother.

jt04Feb 07, 2019

There is another take. The crowds at Disneyland will be well publicized. This may cause a lot of people to decide to wait until the WDW version opens. Word of mouth will also be spreading over time if the quality is what we hope. Perfect storm to generate a wave of demand just as SW:GE opens on the east coast.