Disney’s Profits Jump Despite Dip in Post-Pandemic Attendance
The Walt Disney World Resort in Florida and the Disneyland Resort in Southern California have emerged from the shadow of the coronavirus epidemic during the past two years, and the corporation has undertaken a number of measures that have driven up the price of a trip to a Disney resort. The result is a goldmine for Disney.
The corporation is making record-breaking sales and profits even though it restricts guests and keeps attendance at its U.S. theme parks below prepandemic levels. The outcomes show a significant strategic shift on Disney’s part, as it practices yield management strategy to enhance tourist experience.
The largest change in the last two years—and the most profitable for Disney—is the launch of an app for smartphones called Genie+, which costs $15 per person per day in addition to the cost of entry and enables park visitors to bypass some attractions’ standby queues. Reservations now cost an extra $10 to $17 to escape the standby queues at the most popular attractions, including those rides with Star Wars and Guardians of the Galaxy themes. Hour-long lines may be seen for popular attractions.
At the same time, many advantages that were formerly free have been abolished or have a cost, including parking for some yearly passholders, airport transfers, and MagicBand bracelets that function as both hotel room keys and park passes. Over the past year, the multinational mass media has increased the cost of hotel rooms, meals, and goods while U.S. inflation has reached historic highs.
The domestic Disney parks smashed their previous quarterly revenue and operational profitability records. The business unit that includes theme parks also reported record sales of $5.42 billion and record operating income of $1.65 billion for the three months that ended on July 2.
The company reported that while attendance at Disney’s U.S. parks decreased by 17% from the previous year in fiscal 2021, the first year that both of the company’s two primary U.S. resorts had reopened following the worst of the coronavirus pandemic, per-capita spending by visitors increased by 17%, or nearly three times the average annual growth rate during the previous decade.
Genie+ has gained popularity ever since it was released in the fall of 2021. According to Disney, 70% of people who pay for Genie+ say they intend to do so again in post-visit surveys. Disney no longer offers a large number of brand-new annual passes for Disneyland and Walt Disney World, and it has also eliminated a number of free benefits that annual passholders formerly received.
In the most recent quarter of 2022, the company has a whopping $7.4 billion rom its parks. Earlier this month, the firm increased the renewal price for its most expensive yearly passes to Disneyland by 14%, to $1,599 from $1,399, while there are some blackout days that restrict pass holders’ visit.
When the entertainment conglomerate is losing billions on other ventures, such as the well-liked but expensive Disney+ streaming service, the parks business has helped Disney’s stock price and financial outcomes.