Disney parks and cruises saw their best growth in two years despite a travel slowdown. Here’s how they did it
By Natasha Chen, CNN
Los Angeles (CNN) — Influencers have been flooding social media this summer with videos of short wait times at Disney parks. In June, one content creator recorded a relatively empty Disneyland while noting the absent daytime crowd.
“It’s the middle of summer, the weather is perfect and the park is not crowded,” said Kel Warner, who posts at @themeparkmomlife.
Then came the twist: Revenue for Disney parks and cruises in the most recent quarter rose 10% from the year before, the strongest increase in two years. Global parks attendance grew 4% from last year, per-guest spending increased and even the occupancy of the company’s domestic resort hotels hit a whopping 91%.
The short wait times, it seems, were a red herring.
Disney pulled a series of strategic levers to get people through their park gates at a time when many are being choosy about how to spend their dollars, according to industry analysts.
The company offered a slew of aggressive, targeted discounts; expanded programming and shows for young children; retooled some existing attractions to entice repeat visits; and got to a “sweet spot” in operational efficiency with its skip-the-line service.
That allowed Disney to pull off a great quarter while everyone else felt a dip. Universal parks and resorts saw softening attendance at its two older theme parks in Orlando, and attendance at Sea World and Busch Gardens dropped.
Targeted discounting
Conventional wisdom is that summers at Disney parks mean crowds. But attendance during the season has waned over the last decade, according to Gavin Doyle, founder of MickeyVisit.com, a Disney news and planning site.
That’s because the company has worked hard to get people to visit during other parts of the year – especially the holidays. But that’s left some observers worried Disney wasn’t bringing in enough summertime visitors.
“It’s kind of a problem of their own making now, which is that in the past, the summer was the time that people went to the parks,” Doyle said.
To boost attendance this summer, Disney unleashed a bevy of discounts from coast to coast, for tickets, hotels and dining plans for the season. But they were carefully tailored to appeal to specific groups, like families with young children.
Disneyland Resort in California offered $50 single-day park hopper tickets for kids ages 3-9 all summer, which typically range from $168 to $279. In Florida, a child aged 3-9 could get a free dining plan with the purchase of an adult dining plan.
The company also advertised heavy promotions for on-property Walt Disney World hotels. For example, Disney+ subscribers this summer could book a room at one of the value-level Disney hotels starting at $99 per night, when the standard rate during that time can range from $174 to $225 per night, according to MouseSavers.com.
“I think Disney is starting to read the room,” said Beci Mahnken, founder and CEO of MEI-Travel and Mouse Fan Travel. “They didn’t suddenly become inexpensive, and I don’t think we should pretend they did. Instead, they found ways to add value and give consumers more choices without diminishing the experience.”
Some travel experts saw these summer discounts as a sign of trouble. But “it’s not something to be concerned about,” CEO Josh D’Amaro said on the company’s most recent earnings call. Disney, he added, wasn’t “discounting” its way to growth.
What’s old is new (with less waiting)
Disney is working on long-term projects to build new lands and thrill rides. However, the company this year focused on relatively cheaper renovations – making existing attractions feel new.
Some of the craziest lines seen at Disneyland in California this year happened during the opening days of “Bluey’s Best Day Ever!,” a show that took over an old theater space in the park that had been dormant for a few months. Another Bluey show at Disney World in Florida met with similar success.
The Florida resort also spruced up classic favorite attractions, like Buzz Lightyear’s Space Ranger Spin and Big Thunder Mountain Railroad, while giving a new Muppets theme to its old Rock ‘n’ Roller Coaster.
Visitors also saw shorter wait times, but not because of smaller crowds. That was the result of better efficiency for Disney’s skip-the-line service and more proactive ride maintenance, according to a Disney spokesperson.
Disney’s latest Lightning Lane options rolled out about two years ago, and the company has continued learning how to better manage ride availability based on guest patterns.
Disney has also taken advantage of underutilized space, reworking areas so that they can draw higher crowds without adding to wait times for rides.
The Walt Disney Studio Lot courtyard in Florida, for example, “has gone from having dead mall vibes to being one of the most bustling in all of Walt Disney World. All those people wandering around that courtyard are doing something other than waiting in a line,” wrote Tom Bricker on his site, DisneyTouristBlog.com.
The mouse is still king
Disney parks also make a big celebration out of anniversaries and other limited-time festivals, travel experts say.
“That’s something that’s uniquely Disney,” said Doyle. “I’ve never seen Universal kind of flex that muscle the same way.”
For the quarter ending on June 30, Universal revenue grew 2.7% year over year, and its newest park, Epic Universe, is doing well. But attendance was softening at its older two theme parks in Orlando, with the company citing weakness in consumer sentiment and higher travel costs.
For the same period at United Parks and Resorts, which owns Sea World and Busch Gardens, attendance was down 2.9% compared to a year earlier. Revenue fell 1.4%.
In an internal memo shared exclusively with CNN, Thomas Mazloum, chairman of Disney Experiences, told employees that guest survey results showed high satisfaction and intent to return “across nearly every market we operate.”
Mahnken said that Disney has one advantage over its competitors, even in an uncertain economy.
“We have generations of parents and grandparents who grew up going to Disney, and now they want their kids and grandkids to have some of those same experiences,” she said. “That kind of connection is hard to compete with.”
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