Disney Parks continue to perform well, but when will that means something to us?
It appears the Disney Company is doing better than perhaps expected only a few days ago. According to this morning’s Orlando Sentinel, the theme parks are once again helping to the move the company in the right direction.
Disney reported a strong quarter in its parks-and-resorts segment, where revenue totaled $2.77 billion, up 11 percent from a year earlier, and operating profit reached $505 million, up 25 percent.
Staggs (Chief Financial Officer) said Disney World’s attendance for the quarter was up 4 percent, leading to a record combined attendance for the company’s American theme parks. Disney World also saw hotel-occupancy increase to 89 percent, and per-guest spending increase 3 percent.
This seems to be a familiar story these days. The parks in America really seem to be heading in the right direction as far as attendance is concerned. We can not deny that as a result the parks have also grown and that growth appears to be far from slowing.
But this paragraph below brings up a subject that I still scratch my head over…
Still, Disney executives entertained the prospect of more economic pressures coming to bear on the company. Staggs noted that Disney’s experience with the 2001 recession showed it can adjust theme-park hours, entertainment offerings and other labor-related costs to “dial up and down” the parks’ expenses. He also noted that the parks-and-resorts division is more buffered now by a larger offering of less-expensive hotel rooms, and the resiliency of its cruise-ship and time-share sales. And, he noted, advance hotel bookings are running ahead of last year’s pace — a good sign.
“Adjust theme park hours” means cutting theme park hours, and that is a major change that has largely gone unnoticed over the last few years. As attendance and booking levels continue to increase, one has to wonder when these hours will “adjust” their way back to the pre-2001 levels.
Today, the Magic Kingdom closes at 8pm, yesterday it closed at 7. The Studios closes today at 7pm, as does Epcot’s Future World. This means that every customer who has paid for a “full day” is told to leave hours before nearly every shopping mall in the country closes, and people don’t pay loads of cash to get into a shopping mall. It is time for these cost-cutting measures to change. These hours must be increased.
John from TheDisneyBlog.com said,
February 6, 2008 @ 4:27 pm
I think it’s obvious that Disney C level executives view theme parks mostly as cash cows. Start running the numbers on the daily gate take for WDW or DL and you’ll quickly become staggered by the amount of money the parks take in each day just via admission media. It’s not exactly printing money like Las Vegas style Casinos, but it’s close.
I do want to point out that Staggs isn’t the first CFO to focus on labor hours as a source of increase profits for the Mouse House. Disneyland invented that back in 1955 (read Window on Main Street by Van France or the Roy O Disney biography “Building A Company”). The post 1991 Disney managers have just refined it to the point where each business unit is individually adjustable, down to the churro cart or turnstile.