Since it opened in 1971, Walt Disney World has been known as the happiest place on earth. It's a destination for kids and adults alike—and everyone can remember the thrill from the first time they heard the phrase: “We’re going to Disney!” Of course, the Disney empire expands far beyond Walt Disney World, Disneyland, and its 10 international parks. There are also the company's film and animation studios, various television networks, and its streaming service, Disney+. But Disney World in particular has been the subject of some concern thanks to its declining attendance, even as Disney CEO Bob Iger says the future is "very bright." Read on to learn more about the theme park's current status.
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Disney's 2023 earnings report shows mixed results.
ShutterstockOn Nov. 8, the Walt Disney Company released its full-year earnings report for the 2023 fiscal year ending on Sept. 30. Overall, the news was promising: Revenue grew 7 percent compared to the previous year, and the company reported a net income of $264 million, up from $162 million in 2022.
"Our results this quarter reflect the significant progress we’ve made over the past year," Iger said in a statement accompanying the report. "While we still have work to do, these efforts have allowed us to move beyond this period of fixing and begin building our businesses again."
The parks lost billions in 2020 when they closed from March to mid-July due to the pandemic; Disneyland remained closed until April 2021. But these popular destinations have rebounded in the years since—at least, for the most part.
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Walt Disney World saw decreased attendance.
JHVEPhoto/iStockDisney's international parks, Disney Cruise Line, Disney Vacation Club, and Disneyland grew year-over-year. In terms of the parks, Walt Disney World alone experienced declines. The company attributed this to wage inflation, lower guest spending, and higher costs related to the closure of the Star Wars: Galactic Starcruiser attraction.
"None of this is shocking," wrote Tom Bricker for Disney Tourist Blog. "For one thing, it’s almost identical to last quarter, when Walt Disney World reported both lower attendance and resort occupancy year-over-year."
He also mentioned that visitors had been reporting less crowded parks. "There’s been a lot of skepticism about this, but attendance absolutely is down year-over-year," Bricker wrote. "Wait times and the company’s own financials corroborate this."
In addition to Disney's outlined challenges, travel experts believe that factors like increased interest rates, student loan repayments, and higher gas prices could also contribute to lower guest counts at Disney World. According to Frommer's, a late 2022 LendingTree survey found that 18 percent of Disney visitors took on debt to pay for the trip.
"That's a huge proportion of guests who are negatively impacted by rate hikes," the travel guide notes. "As interest penalties rise, more guests will be forced to choose more affordable vacations."
Severe weather may also play a role. USA Today reported that Florida saw record-breaking heat this summer, with 46 days of 100-plus degrees in a row.
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Other business segments improved.
Shutterstock/Ivan MarcIt's not only the non-Disney World parks that are showing improvement: Disney's other business areas were strong. The earnings report highlighted that Disney+ added nearly 7 million new subscribers in the fourth quarter, and that all of the company's streaming services, including Disney+, Hulu, and Disney+ Hotstar, were expected to reach profitability by the end of 2024. They saw a 12 percent increase in revenue for the year.
ESPN saw a 1 percent increase in revenue and a 3 percent increase in paid subscribers.
The CEO says things are looking bright for the future.
JHVEPhoto / iStockIger outlined a few ways the company plans to grow in the next year and highlighted the parks specifically.
"When we looked ahead at how to allocate capital … we decided a great place to place our bets or capital would be the parks," he said on CNBC. He explained that in the past, like during the Great Recession, investment in the parks has paid off.
"The trajectory is very bright for parks," he concluded.
Iger added that other areas of focus for the company are growing Disney+, building ESPN, and improving "the output and economics" of the film studios.
"I’m bullish about the opportunities we have before us to create lasting growth and increase shareholder value," he said.
