Disney shares rose five percent after Wednesday’s third-quarter earnings report beat expectations, largely due to higher spending at the company’s national theme parks.
But can Disney’s good fortune say anything about the current state of the U. S. economy?USA? Experts see Disney’s theme parks as indicative economic indicators, as the Financial Times explained several years ago. Essentially, the theory is that when budgets are adjusted, families cancel trips. That doesn’t seem to be declining right now.
what a difference a year ago. At the time, last summer, most Disney theme parks were operating at reduced capacity due to the pandemic and Disney Cruise Line was not working at all.
Fast forward to Wednesday’s cash revenue call, where corporate executives announced that cash from Disney’s parks, reporting and products department had increased by more than $3 billion and operating profit had increased by $1. 8 billion compared to the same era in 2021. increasing due to jumps in the theme of park attendance, busy nights at on-site Disney hotels, and cruise reservations.
“All of our theme parks are already open,” Disney CEO Bob Chapek said in the earnings call, noting that the company has gradually increased its capacity and brought many reports that families love, such as characters and reunion greetings, stunning fireworks and theatrical performances. .
“Demand in our national parks continues to exceed expectations with attendance several days ahead of 2019 levels,” said Christine McCarthy, Disney’s chief financial officer. Not getting reservations. “
Chapek noted that the quarter included 3 major milestones for the parks and reporting business. The first was the launch of the immersive roller coaster Guardians of the Galaxy: Cosmic Rewind at Epcot at Walt Disney World Resort in Orlando.
The timing of disney Cruise Line’s fleet expansion with the new Disney Wish ship, which runs on liquefied herbal gas. “But we have a competitive position across the cruise industry, especially in the family circle cruise market, so we generate costs well above the industry average.
The third big step is the opening of the Marvel-themed Avengers Campus at Disneyland Paris. “Customers are responding particularly to our enhanced offering at Disneyland Paris. Per capita spending in the third quarter increased more than 30% compared to 2019, a wonderful sign of the site’s expansion potential,” Chapek said.
The strong third quarter functionality of the Disney resort in France was partially offset by the effects of the closure of its Shanghai resort, where the theme park closed completely until the last 3 days of the quarter.
While average daily attendance at Disney National Parks has declined since 2019, in line with capita spending, it is up 10% from last year and is 40% higher than in fiscal year 2019.
The construction in line with capital expenditure is partly due to the Genie and Lightning Lane features that were introduced last year to upgrade the old FastPass system. With the new system, park users can pay more to avoid the lines of the most popular attractions. “Now, about 50% of the other people who walk through the door buy this Genie product, and I think the result can be seen in our returns,” Chapek said.
McCarthy said foreign visitors, who traditionally accounted for up to 20 percent of the total number of visitors, have been slow to return to U. S. parks. UU. ” During the pandemic, foreign visits to our national park, primarily Walt Disney World, were virtually non-existent,” he said. “But it has made significant progress, and we expect the influx of foreigners, when it has fully returned, to rise to the margins because those consumers tend to stay longer in the parks and spend more cash when they are there too. “
Disney’s rebound is more than a pent-up call after the darkest days of the pandemic, Chapek said. our parks and their attendance, but also in terms of what consumers are willing to spend when they get there to personalize their experience.