Disney highlights theme park revenue growth
Visitors can avoid lines at Disney World if they choose the system.
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DisneyThe restructuring has led to some changes in the way the company reports its financials, which provides insight into how much of an impact its theme park business is having on its bottom line.
According to a Submission on WednesdayThe theme park segment reported total revenue of more than $24 billion in the first nine months ended July 1. That’s up 17% from the first nine months of 2022. Theme park tickets alone accounted for nearly $8 billion of nine-month 2023 sales. 21% more than the same period in 2022.
Previously, Disney reported retail and wholesale sales of food and beverage merchandise as one category and merchandise licensing as another. Now that revenue is reported in three categories: Parks and Experiences, Merchandise, Food and Beverage; merchandise licensing and retail; and parking licensing and others. Theme park and resort and vacation ticket categories remain the same.
Disney is also continuing to expand its parks business. The company is expected to nearly double its investment in the business, spending around $60 billion over the next decade. This is the company’s most significant creative investment in decades.
The financial reporting changes are part of Disney’s restructuring that divided the company into three divisions – entertainment, sports and experiences – and come at a time when the company is looking for a strategic investor for ESPN, long considered the crown jewel of the company Deal was valid just a few weeks ahead of the company’s scheduled date release Results for the fourth quarter of the fiscal year.
Entertainment includes all of Disney’s streaming and media operations, sports includes ESPN, and experiences includes the company’s theme parks, hotels, cruise lines and merchandising operations.
Read more: Disney gives investors a look at ESPN’s financials
The filing Wednesday highlights that Disney’s theme park revenue continues to grow, even as the theme park industry as a whole has seen declines in attendance and hotel room occupancy.
Disney and Universal’s domestic parks, as well as regional players such as Six Flags and Sea World, reported lower attendance this year. Travel agents have pointed to higher ticket prices and an increase in travel to Europe as the main factors behind the decline in attendance at domestic theme parks.
Among other things, Disney has increased the prices for visits to its domestic parks in the theme park sector, but also offers discounted offers for families, especially in the low season between January and June.
What are Disney’s theme park growth plans?
One of the projects already underway at the Disney parks is redesign Splash Mountain at both domestic resorts with a Princess and the Frog theme, as well as updates to existing hotel and resort locations. Disney also plans to nearly double its cruise line’s capacity, adding two ships in fiscal 2025 and another in 2026.
Internationally, Hong Kong Disneyland will open a “Frozen”-inspired land next month and Shanghai Disneyland has a “Zootopia”-themed land in the works.
The company provided “blue sky” ideas for its parks during its D23 Expo last year in Anaheim, California. These projects are still in early development and may not see the light of day yet. This included the possibility of redesigning the Dino Land at Animal Kingdom in Orlando to be themed as a “Zootopia” or “Moana” area.
At the Magic Kingdom, Disney asks the question, “What’s behind Big Thunder Mountain?” The company teased that the location could feature an area based on “Coco” or “Encanto” or both. There has also been talk of the possibility of bringing to life an area of the Magic Kingdom overrun by Disney villains.
Prices for these projects will vary if they actually come to fruition. The recent expansions of the two Star Wars: Galaxy’s Edge locations at Disneyland and Disney World are estimated to have cost $1 billion each.
Notably, Disney closed its expensive Star Wars-themed hotel, the Galactic Starcruiser, last month. The boutique hotel, which promised a two-day immersive experience in the canon, proved too expensive for general Star Wars fans.
Disney is expected to report fourth-quarter results after the closing bell on November 8th.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
