Disney Expects Softer Attendance Trend To Continue at Walt Disney World and Disneyland

Aug 07, 2024 in "The Walt Disney Company"

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Bob Iger at Walt Disney World

Posted: Wednesday August 7, 2024 9:34am ET by WDWMAGIC Staff

In this morning's investor Q&A session, Disney CEO Bob Iger and CFO Hugh Johnston discussed key issues surrounding the company's theme parks and experiences, including ongoing cost reduction efforts, attendance levels, and expected demand moderation in the coming quarters.

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Cost Reductions and Strategic Investments

Disney has been actively pursuing cost reductions to enhance its bottom line while continuing to invest in its parks and experiences. CFO Hugh Johnston highlighted that Disney initially set a cost reduction target of $5.5 billion, which has since been increased to over $7.5 billion. Johnston emphasized the company's commitment to driving productivity and efficiency, stating, "In big companies, my worldview is there's always an opportunity to do more with less, so we're going to continue to go after it aggressively as we can to both deliver the bottom line and to invest back into business with all the great opportunities we have."

Despite these reductions, Disney says it remains committed to making strategic investments in its parks and experiences. Johnston noted that while the company is mindful of cost, it also recognizes the importance of continuing to invest in areas that will drive future growth, particularly in its theme parks and cruise lines.

Disney's Parks and Experiences Revenue Up in Q3 FY2024, But Operating Income Declines

Attendance and Revenue Outlook

During the Q&A, Iger and Johnston addressed concerns about attendance at Disney parks, acknowledging a slight decline in the third quarter. However, they were quick to note that the decrease was not drastic and attributed some of the softness to broader economic factors. Johnston explained, "We saw attendance [was] flat in the quarter, and perhaps [it was] up a little bit. We expect to see a flattish revenue number in Q4 coming out of the parks."

Looking ahead, Disney anticipates that this trend of flat or slightly declining attendance may continue for the next few quarters, with revenue expected to remain steady. Johnston mentioned that this is not indicative of a prolonged downturn, but rather a temporary moderation in demand that the company is closely monitoring.

Johnston attributed some of the loss in demand to economic pressures on lower-income consumers and an increase in international travel, which may be diverting potential domestic visitors. He said, "Lower-income consumers [are] feeling a little bit of stress, [and] higher-income consumers [are] traveling internationally a bit more."

Speaking later on CNBC, the Disney CFO said, "In reality, people will tend to hang on to their vacations quite strongly because it's an important piece to the family unit. And as a result, we think this is just going to be a few quarters and we'll be fine coming out of it."

The company is also keeping a close eye on potential impacts from the upcoming Olympic Games, particularly at Disneyland Paris, where a temporary reduction in consumer travel is expected due to the event. However, Iger expressed confidence that these challenges are short-term and that the overall outlook for the parks remains positive, especially as new attractions and cruise ships come online in the coming years.

D23: The Ultimate Disney Fan Event will take place August 9-11, 2024, where Disney is expected to announce a number of upcoming attractions and experiences for Walt Disney World and Disneyland.

Horizons: Disney Experiences Showcase D23 2024

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NotCalledBob1 minute ago

This. Plus general wear and tear on the attraction. One theater rotated saves a whole lot on maintenence.

Angel Ariel20 hours ago

Has it really been 10 years? Goodness.

Laketravis20 hours ago

I just realized it's been 10 years since I discussed WDW's adoption of yield management on another forum (Angel, I bet you remember). Funny how that led to what we were predicting would happen a decade ago. Not just the monetization of a preferred queue, but even more important that they finally figured out the intricate balance of creating mostly constant SB wait times for each attraction regardless of the number of people in the parks, SB wait times that they also determined would be acceptable to a majority of guests while encouraging another percentage of guests to pay extra not to wait, all while expanding and shrinking resources (and saving costs) to maintain that balance. When we compare today to the days of remarkable 180 minute SB waits for Toy Story Mania, Test Track, Soarin, and others while watching reports on national evening news about some waits hitting the four hour mark while parks were regularly closed due to capacity levels, I suppose things aren't so bad.

Andrew C21 hours ago

that’s what she said?

Nubs7022 hours ago

Too many people riding, not enough people buying...

Angel Ariel1 day ago

We typically go in January, and this year went in October and I felt the same way. I believe someone said that this has been verified as not happening by Touring Plans, but October was definitely far busier than January is (as easily measured by the crowds at fireworks time), but our wait times for attractions were pretty much the same.

Tha Realest1 day ago

Also has the added benefit of reducing operations / employee costs.

bmr15911 day ago

I will say this. One of the ways Disney appears more busy than ever before is by limiting capacity on rides during certain periods. For instance, I went one week in early January and they only had one theater running for Flight of Passage. I went in early March that same year and they had four theaters running. It was faster for me to get through a longer line in March during a busier season than in January because of what they had running. Part of that is them not wanting to pay as many people to operate rides during lower times of the year. Another part is intentionally inflating the wait times to sell more Genie+ and make things feel way busier than they actually are.

JoeCamel1 day ago

Donnie?

JoeCamel1 day ago

6 months +1 day is the requirement

HauntedPirate1 day ago

Pffft... why do they want more of those freeloaders in the parks? Florida residents are as bad, if not worse, than Annual Passholders!

Nevermore5251 day ago

Oh for sure, and while obviously the C-Suite will want to ensure revenue streams stay consistent, it’s just once you get above Jeff it’s a broader focus on the parks ecosystem as a whole rather than just a focus on WDW. For those folks they may just see a 7% increase in theme park admissions 5% higher pricing and 2% growth in attendance, a 5% increase in resorts and vacations which they noted 3% cruise rates, 1% higher spend at hotels and 1% higher occupancy of cash room nights, and a 4% increase in merch/food/beverages across the parks system from 2% higher volumes and 2% higher prices. As well as a 7% increase in parks licensing from places like TDR. All increases from the previous year.

Laketravis1 day ago

Although anecdotal, one thing I did notice over the last three weeks was the very large number of Florida residents in the parks and even the resorts. WDW was (and still is) offering extremely low resident rates for both park tickets/passes and resort stays. We could see them in detail on the app while onsite with a Florida IP address and I was tempted to see how I could establish a Florida residency. Those are a gamble for Disney who counts on those residents to spend big while on property, and while some will splurge with dinner at Narcoossee's or Topolino's - many don't (at least the ones I talked to ). That pumps attendance numbers but not necessarily revenue.

Nevermore5251 day ago

Wasn’t disputing the difficulty of parsing out exactly what WDW is doing financially vs DLR, just pointing out that the cruise industry hasn’t been as substantive on the balance sheet.