Attendance Down, Revenue Up

[Enjoying Life]

Disney just announced it's quarterly earnings report, and it shows that theme park attendance is down but revenue is up. This is a result of higher prices.

“The parks and resorts division's revenues increased 4 percent but that was because of higher per-guest spending - pricier tickets, higher spending on merchandise and higher hotel room rates”

http://www.orlandosentinel.com/business/tourism/os-disney-earnings-20160510-story.html

 

[Shanti]

Disney just announced it's quarterly earnings report, and it shows that theme park attendance is down but revenue is up. This is a result of higher prices.

“The parks and resorts division's revenues increased 4 percent but that was because of higher per-guest spending - pricier tickets, higher spending on merchandise and higher hotel room rates”

http://www.orlandosentinel.com/business/tourism/os-disney-earnings-20160510-story.html

I hope attendance stays "down" for my trip in July.

 

[Mikie]

Hmmmm. . . Before reading, I wondered whether the decreased attendance was, as some have speculated, a desired result to enhance guest experience. Upon reading, nope - I was reminded about the dropping of Resident blackout dates to try to boost attendance, so the decline was not desired. And the article states they still missed analyst expectations, so apparently the price hikes were not intended to scare anyone away. It's hard to say whether price hikes caused any attendance drop, as many of the hikes are pretty new and lots of travelers plan their vacations much further out. I imagine quite a lot of people were kind of stuck with the increases at first because they felt locked into their plans already. I imagine there's a lag of a couple quarters to really assess the effects.

However, the article does somewhat refute the "it may not be good for the guests, but it's still good for the shareholder" argument. In the long run, what's good for the stockholder HAS to be good for the customer or something is wrong with your business plan.

 

[anneboleyn]

I hope attendance stays "down" for my trip in July.

I was thinking the exact same thing about my trip in September!

 

[P'colaBeachBum]

It was good news..the stock was up today!

 

[crazymomof4]

I was thinking the exact same thing about my trip in September!

Same (Sept) I remember back in the late '80's-90's when Sept and Oct the parks had REALLY LOW crowds (like you could take a nap on the pavement in WS, low), not just the "low crowds relative to the rest of the year"... as Sept is now referred to.

 

[anneboleyn]

Same (Sept) I remember back in the late '80's-90's when Sept and Oct the parks had REALLY LOW crowds (like you could take a nap on the pavement in WS, low), not just the "low crowds relative to the rest of the year"... as Sept is now referred to.

I have never been in September so I am hoping it won't be too bad! I went during the last week of October in 2015 and I thought it was great, but apparently other people considered it super busy. So if September is even slower than that, I will be ecstatic lol

I am keeping my fingers crossed that we will be napping on Main Street in a few months lol

 

[Skywise]

It was good news..the stock was up today!

They annouced after the stock close - The run up was because everyone was betting Disney would beat the estimates (with Star Wars and Zootopia running rampant in the last quarter)

After-hours trading currently has the stock down around $100 (was $106 at the close)

 

[P'colaBeachBum]

They annouced after the stock close - The run up was because everyone was betting Disney would beat the estimates (with Star Wars and Zootopia running rampant in the last quarter)

After-hours trading currently has the stock down around $100 (was $106 at the close)

Well darn. I looked after the close and it was 106.

 

[Skywise]

It'd be interesting to figure out if the attendance drop was in relation to the price increase - I think it's too early for the attendance to be that far down because the price increases just occurred really near the end of the quarter...

 

[Skywise]

Well darn. I looked after the close and it was 106.

Not all of the stock pages show the after hours value (and it takes an hour or two after close for the after hours trading to kick in)
https://www.google.com/#q=DIS

 

[jknc]

I've been saying that it seems like going into Summer occupancy rates are lower, hence they can't even finalize the June park hours.

 

[DLgal]

Hmmmm. . . Before reading, I wondered whether the decreased attendance was, as some have speculated, a desired result to enhance guest experience. Upon reading, nope - I was reminded about the dropping of Resident blackout dates to try to boost attendance, so the decline was not desired. And the article states they still missed analyst expectations, so apparently the price hikes were not intended to scare anyone away. It's hard to say whether price hikes caused any attendance drop, as many of the hikes are pretty new and lots of travelers plan their vacations much further out. I imagine quite a lot of people were kind of stuck with the increases at first because they felt locked into their plans already. I imagine there's a lag of a couple quarters to really assess the effects.

However, the article does somewhat refute the "it may not be good for the guests, but it's still good for the shareholder" argument. In the long run, what's good for the stockholder HAS to be good for the customer or something is wrong with your business plan.

Who says the decline in attendance was not desired? Spending STILL went UP.

I have it on good authority (friend who is at management level at Disney corporate in Burbank) that they are actively TRYING to lower attendance numbers in the parks. The ticket price increases are a measure to "reduce throughput."

 

[mom2rtk]

Who says the decline in attendance was not desired? Spending STILL went UP.

I have it on good authority (friend who is at management level at Disney corporate in Burbank) that they are actively TRYING to lower attendance numbers in the parks. The ticket price increases are a measure to "reduce throughput."

I think they tipped their hand on that when they lifted the blackout on local annual passes over Easter.

 

[cel_disney]

Who says the decline in attendance was not desired? Spending STILL went UP.

I have it on good authority (friend who is at management level at Disney corporate in Burbank) that they are actively TRYING to lower attendance numbers in the parks. The ticket price increases are a measure to "reduce throughput."

Are they trying to REDUCE or EVEN throughput...I think they are trying to even it out more so they can have more predictable and in some months lower operating costs.

 

[DLgal]

Are they trying to REDUCE or EVEN throughput...I think they are trying to even it out more so they can have more predictable and in some months lower operating costs.

Could be. Explains the tiered ticket prices.

 

[Enjoying Life]

This is the 2nd bad earnings report in a row for DIS. The stock price is down 20% from it's highs. These greedy Disney executives are foaming at the mouth in anger over this. They have lost hundreds of millions in personal wealth because of the decline. At this very moment they are having a meeting demanding more ways to cut services and raise prices at theme parks. You thought it was getting bad, wait until you see what's coming.

 

[Mikie]

Who says the decline in attendance was not desired? Spending STILL went UP.

I have it on good authority (friend who is at management level at Disney corporate in Burbank) that they are actively TRYING to lower attendance numbers in the parks. The ticket price increases are a measure to "reduce throughput."

That's good scoop. People on the DIS have theorized a lot that maybe price hikes were *intended* to decrease attendance, but I took the lifting of Fla resident blackout dates to be an "oops, we didn't want to reduce attendance this much (or possibly at all)" and the article seems to lean that way. Additionally, since they missed analyst expectations, I took it to mean that expectations (which are based on interviews with the higher-ups) were such that revenues should have been up MORE than they were. Possible cause: attendance wasn't supposed to drop.
Your insider info is probably better than my review of a brief article, but that's what I read into it at the time.

 

[Mikie]

Are they trying to REDUCE or EVEN throughput...I think they are trying to even it out more so they can have more predictable and in some months lower operating costs.

Could be. Explains the tiered ticket prices.

And that could all coincide with missing expectations this quarter: intended to level out throughput by reducing attendance *in certain key times*. The quarter just ended would not be one of the times in need of lowering, so perhaps that part was a surprise.

 

[AliceIn]

The price increases will only get them so far. The strong dollar is keeping international visitors from coming over, and Disney has priced out a large swath of the American consumer. Families with young children aren't generally flush with extra cash for Disney world. Older travelers who do have the money to spend are looking for the high end experience. Disney's cutbacks on services for the deluxe resorts and the club level offerings will cause the travelers looking for the premium experience to look elsewhere. I see a lot of the repeat travelers to Disney beginning to question whether or not it's a good value now - that's got to hurt Disney.