Domestic park attendance down 4% in Q3

[rteetz]

Either the company isn't doing that well financially, or they are trying to pay for Shanghai and all the future expansions by looking desperately cheap.

I don't know how they could post record profits and not be doing well financially. They can't lie about their finances. Sure ESPN woes continue but that didn't seem to be a problem this quarter.

Something just doesn't seem right here.

 

[rteetz]

Yes, I would say so. Disney has a supply problem when it comes the parks. They couldn't increase their profits simply by increasing volume of visitors, there's just not enough space. Higher crowds would just mean more complaints. They needed to either cut costs or increase profit per visitor, or both . When they increased their prices over the years, attendance continued to increase. So they jacked up the prices even faster, and cut costs as well.

What happened to the blessing of size in Florida? Or adding major new experiences to the parks? MK isn't really hurting but look at DHS and AK they are seeing nearly the attendance that MK does. How much will Pandora and Star Wars actually help?

 

[Disney Dad ADL]

What happened to the blessing of size in Florida? Or adding major new experiences to the parks? MK isn't really hurting but look at DHS and AK they are seeing nearly the attendance that MK does. How much will Pandora and Star Wars actually help?

Not sure really. Maybe it won't help with crowding so much as make the crowding tolerable. Possibly they're hoping people will be willing to deal with higher crowds to see the shiny new rides . I guess we'll find out in a couple years.

 

[luisov]

I don't know how they could post record profits and not be doing well financially. They can't lie about their finances. Sure ESPN woes continue but that didn't seem to be a problem this quarter.

Something just doesn't seem right here.

Take into account all the stuff they have to pay for. There's Shanghai, two Star Wars lands and the rest of the expansions in the US. Paris is supposedly doing relatively well these days, but it's still rather expensive to operate, not to mention the major overhaul it's going through. Hong Kong is not doing exactly well. And Disney also has a couple of big flops at the box office this year, not to mention the ESPN deal.

I agree with you though. Disney still reported record profits in the theme park division, and they have 4 films inside the top 5 2016 worldwide grosses at the box office. There's no evident reason behind the dramatic measures that are being taken in order to cut costs. Perhaps they are being extra cautious in the way they are spending money, at least until Shanghai starts operating at a profit, which unfortunately will take quite a while.

 

[lockedoutlogic]

Could it be related to an increasing number of guests spending more time at Universal instead of the WDW parks but still staying on-site?

That would be reflected in market share...

Which would drive them nuts

 

[lockedoutlogic]

Remember these things:

1. Espn is a gigantic hole in the portfolio that gets wider by the day...and unlike the ozone layer - they can't close it.

2. Paris is red ink...they have not made a dime on the place in 25 years except a brief spell during the honeymoon period.

3. So you honesty think Disney has not taken huge losses on their part in both Hong Kong and Shanghai?

I don't...those are zero profit games for them...just not as obvious as paris.

The tv business is dying across the board...data now rules the world

The movie business is erratic - at best. They've seemed to rotate blockbusters and flops almost predictably...

Anyone think Pete's dragon will do well?

Disney has a lot of problems...and it's obvious because Iger is just trying to stopgap it to his imaginary stock option "finish line"

This has been in the oven baking for awhile...I swear.

 

[rteetz]

Take into account all the stuff they have to pay for. There's Shanghai, two Star Wars lands and the rest of the expansions in the US. Paris is supposedly doing relatively well these days, but it's still rather expensive to operate, not to mention the major overhaul it's going through. Hong Kong is not doing exactly well. And Disney also has a couple of big flops at the box office this year, not to mention the ESPN deal.

I agree with you though. Disney still reported record profits in the theme park division, and they have 4 films inside the top 5 2016 worldwide grosses at the box office. There's no evident reason behind the dramatic measures that are being taken in order to cut costs. Perhaps they are being extra cautious in the way they are spending money, at least until Shanghai starts operating at a profit, which unfortunately will take quite a while.

They wouldn't have to pay for major expansions if they routinely updates their parks and didn't have droughts of 10 years without any major additions. They knew they would have to pay for these things before getting into them as well. Shanghai also isn't all out of disney's pocket as they only own 43%.

Paris didn't fair incredibly well in earnings and a lot of work is still left to do. Paris not doing well was credited to terrorism concerns.

Hong Kong did okay this go around but could do better and is a park that should be invested in.

 

[lockedoutlogic]

They wouldn't have to pay for major expansions if they routinely updates their parks and didn't have droughts of 10 years without any major additions. They knew they would have to pay for these things before getting into them as well. Shanghai also isn't all out of disney's pocket as they only own 43%.

Paris didn't fair incredibly well in earnings and a lot of work is still left to do. Paris not doing well was credited to terrorism concerns.

Hong Kong did okay this go around but could do better and is a park that should be invested in.

Hmmm...this post reminds me of someone...

...can't quite put my finger on it but it sounds very wise

 

[rteetz]

Remember these things:

1. Epsn is a gigantic hole in the portfolio that gets wider by the day...and unlike the ozone layer - they can't close it.

2. Paris is red ink...they have not made a dime on the place in 25 years except a brief spell during the honeymoon period.

3. So you honesty think Disney has not taken huge losses on their part in both Hong Kong and Shanghai?

I don't...those are zero profit games for them...just not as obvious as paris.

The tv business is dying across the board...data now rules the world

The movie business is erratic - at best. They've seemed to rotate blockbusters and flops almost predictably...

Anyone think Pete's dragon will do well?

Disney has a lot of problems...and it's obvious because Iger is just trying to stopgap it to his imaginary stock option "finish line"

This has been in the oven baking for awhile...I swear.

1. duh

2. Paris is just trucking along. I hope the best for that park and they continue to make drastically needed improvements to the parks there.

3. Of course they have

TV business is hurting hence why Disney invested in a new streaming service again.

Movie business has been that way recently it seems.

I hope the best for Pete's dragon. Mid 80s on Rotten Tomatoes and certified fresh. I want to see the movie and I hope it doesn't flop. While it won't be a blockbuster I hope its at least decent.

 

[lockedoutlogic]

One thing I have noticed around here is that people don't get the problem that is espn.

It's 40% of their business (as in Disneys business...all of it...) and in the now collapsing cable/advertising model of the 1980's...by far their highest profit dollar for dollar.

Epsn has printed free profits for them for 20 years.

Make no mistake...that is ending. The wheel is broken.


So while everyone says "I know espn is a problem"...that's mostly lip service.

Iger said they had lost "some subscribers" last August and they lost 25% of their stock value...translated to hundreds of billions of dollars... in a matter of days.

I trust the greedy slime buckets on Wall Street on one thing: knowing where the money is.

Cable cutting isn't gonna stop...there's no way to "save" it.

So while everyone here might Think Disney is making mad bucks off their dining plan, Bibbidi boutique, and GF CL MK View room during "magical" wishes...

...they are frankly wrong.

Follow the money.

 

[rteetz]

A look at the email Bob Iger sent to all Disney Employees after today's earnings report.


Dear Fellow Employee,



Today was a great day for the Company, as we announced third quarter adjusted earnings per share that were 12% above last year, marking our 12th consecutive quarter of double-digit growth.


Our Studio led the way once again, delivering 62% growth in operating income year-over-year. Our Studio is having a tremendous year both creatively and commercially, with great successes from Pixar, Marvel, Disney Animation, and Disney live action. Marvel’s Captain America: Civil War; Disney Animation’s Zootopia, and Disney’s The Jungle Book are the world’s three biggest movies of the year so far– earning critical acclaim and averaging more than $1 billion each in global box office – and Pixar’s Finding Dory is the #1 domestic release of 2016. The Studio’s slate of upcoming releases looks very strong, too.


Today we also announced an important strategic investment, acquiring a 33% stake in a technology platform called BAMTech, which provides Major League Baseball and the National Hockey League with a robust means of delivering live, streamed sports on a direct-to-consumer basis. We have an option to acquire majority ownership in the future, which will enable ESPN, and other Disney media businesses, to reach more people in more modern, compelling ways.

If you’d like to know more about our investment in BAMTech or our performance in the third quarter, you can read our press releases or listen to a replay of this afternoon’s earnings call by clicking here.

This has been a year of many highlights, including the opening of Shanghai Disney Resort in June, ESPN’s coverage of one of the most exciting NBA Finals in history, and excellent coverage by ABC News of one of the most interesting presidential elections we’ve ever witnessed.


I hope you are enjoying your summer and I thank you all for your numerous contributions to this performance.


Best,


Bob

 

[beer dave]

What happened to the blessing of size in Florida? Or adding major new experiences to the parks? MK isn't really hurting but look at DHS and AK they are seeing nearly the attendance that MK does. How much will Pandora and Star Wars actually help?

I think it will "help" by giving them a boatload of price hike fuel for the following few years. I agree they are moving towards excluding some folks intentionally.

 

[Brocktoon]

Yep the wallet voting came....for some.

Count me in a finally giving the finger to WDW this year, and I know many other loyal yearly guests who have decided to skip Disney as well. I'm fortunate enough in my career that money isn't an issue, and I've been visiting WDW at least once a year for the past 10 years.

But over the past few years experiencing Disney nickel and dime with 'additional/added' experiences and cutting back in parks and customer service ... basically paying more and getting much less year over year. Like many others I'm keeping an eye things and will probably head back when the park additions are complete, or for a quick food and wine trip. But for this year Royal Caribbean is getting my money as I chose to do a (non-Disney) cruise.

 

[dreiwhit]

Count me in a finally giving the finger to WDW this year, and I know many other loyal yearly guests who have decided to skip Disney as well. I'm fortunate enough in my career that money isn't an issue, and I've been visiting WDW at least once a year for the past 10 years.

Us too! We're planning a trip for later this year, but after that its going to be a while before we go back to WDW. To be honest, a WDW vacation costs about 150% more than a normal vacation and we just can't afford that each year.

 

[mcjaco]

Going in October. Glad you're all staying away! LOL!

International tourism is down as well, so it's not a Disney thing.

 

[Madonna3]

Disney is in what I believe to be a state of chaos. It's where Universal was 10 years ago. Their rides were outdated, they didn't have enough on property options, and there were better options for the money in the general area (Disney). Now, it seems the roles have reversed. Universal has more on property options, they have updated rides, new expansions, and are the better bang for the buck, subjective to opinion, of course.

More people, and this is from my research of talking to people staying at the same resorts as I am, are opting to venture off property, but still stay in Disney's hotels. Frankly, Disney's hotels are resort-fee free (for the moment), provide good transportation options to Disney parks, and allow guests to participate in the Dining Plan. Guests that I have spoken to will buy a reservation for 3-4 days, get the Dining Plan for those days, get tickets, but not use them consecutively, and then make another resort reservation for room only. They will travel off site to visit other places, but return to Disney hotels at the end of the night. The allure of Universal became too great and no longer are people opting to only do Disney.

Further, the parks are a mess. The whole WDW area in general is a mess. The construction on the roads is awful and the parks (with the exclusion of MK) are abhorrent. I have NEVER in my years as a Florida resident wanted to visit the "other" parks. Now, I can't wait to find the right opportunity to go to Universal. It appeals to me more than the "mess" does and I am a DVC member, Disney Visa credit card, shareholder, and Annual Pass Holder. I AM a Disney fan, but WDW is just in chaos and I don't like chaos.

I always said that if Universal ever caught up to Disney I would give them consideration. Well, they must have listened to me because they did and I think they're starting to pass Disney in terms of theme park experiences. I am not surprised that the attendance is down. I am sure I am not unique in my thinking. I am sure the people I personally surveyed are not alone in theirs either. Disney has succeeded in keeping people on property, but failed to keep them exclusively at Disney.

I am actually glad to see the attendance fall a bit. The crowds have been unbearable and I believe it is because Disney used to be considered an excellent value. Room discounts were readily available, free dining was being offered several times a year, and ticket prices for multi-day experiences remained reasonable. Now, Disney is not considered the value it once was and in a recovering economy, people are analyzing how they spend their dollars. I honestly don't think Disney parks can handle their crowd level with current demand. I think that is helping shift people to Universal and Sea World. A lot of people are opting to skip DHS and instead spend that vacation day somewhere else. I can completely understand why too. I recently told a friend going to Disney this week, who is purchasing Day passes, to not even bother with DHS.

I think we'll see a steady decline in attendance until DHS and the other projects are finished. Right now, there's not a whole lot of appeal to head to Disney.

 

[nco91590]

Disney has never been something we did annually. Maybe every 2-3 years max since my parents got DVC in 2001. I would be mad too if it had always been affordable enough to go every year and now all the sudden it's not.

For my family, it's always been hella expensive, so the increases here and there are just par course in my eyes. If people really want to come to Disney, they'll do it regardless of the cost. People who have been enough times or fail to see the value won't.

 

[Whatsthegoodword]

They've got to be happy with these results, right? Park congestion is down, but profits are up. All of this is practically by design. I don't like it because of the spiraling costs, but I'll bet that this is exactly what Burbank hoped for.

...and ESPN... Yes, the model for delivering sports programming is changing. Cord-cutters are causing heartburn for anyone in the cable TV business. Disney buying BAMTech, and the details of their new deal with the Atlantic Coast Conference (delivery methods) shows that they are moving to respond to the market. Live sports is still the only programming that compels viewers to actually watch (or tolerate) advertising, and it's still the programming of choice for the all important young male demographic. Don't cry for Mickey Mouse; ESPN will continue to be a very valuable part of his portfolio.

 

[jade1]

Less people, spending more for the same due to price increases across the board.

It's nothing we all around here haven't recognized/predicted/stuck our heads in the sand and denied the existence of over the last couple years.

It's all according to plan.

The question is: is it sustainable or will the dominos start to fall?

That the kicker.

I agree with this. ALthough its been asked on here for years by some- when it will fall.

The number one complaint has been capacity, crowds and long lines, heck even room capacity (cash and DVC) as well as dining.

Secondary would cost. Lower prices would make it even worse (busier).

FP+ has helped, but like DL it had to go up

But now that we see dollars and bookings indeed did increase-I believe the expansions will derail the dominos from falling if they don't scale back too much. Without them-I could have seen it happen. We will see.

 

[rteetz]

Disney is in what I believe to be a state of chaos. It's where Universal was 10 years ago. Their rides were outdated, they didn't have enough on property options, and there were better options for the money in the general area (Disney). Now, it seems the roles have reversed. Universal has more on property options, they have updated rides, new expansions, and are the better bang for the buck, subjective to opinion, of course.

More people, and this is from my research of talking to people staying at the same resorts as I am, are opting to venture off property, but still stay in Disney's hotels. Frankly, Disney's hotels are resort-fee free (for the moment), provide good transportation options to Disney parks, and allow guests to participate in the Dining Plan. Guests that I have spoken to will buy a reservation for 3-4 days, get the Dining Plan for those days, get tickets, but not use them consecutively, and then make another resort reservation for room only. They will travel off site to visit other places, but return to Disney hotels at the end of the night. The allure of Universal became too great and no longer are people opting to only do Disney.

Further, the parks are a mess. The whole WDW area in general is a mess. The construction on the roads is awful and the parks (with the exclusion of MK) are abhorrent. I have NEVER in my years as a Florida resident wanted to visit the "other" parks. Now, I can't wait to find the right opportunity to go to Universal. It appeals to me more than the "mess" does and I am a DVC member, Disney Visa credit card, shareholder, and Annual Pass Holder. I AM a Disney fan, but WDW is just in chaos and I don't like chaos.

I always said that if Universal ever caught up to Disney I would give them consideration. Well, they must have listened to me because they did and I think they're starting to pass Disney in terms of theme park experiences. I am not surprised that the attendance is down. I am sure I am not unique in my thinking. I am sure the people I personally surveyed are not alone in theirs either. Disney has succeeded in keeping people on property, but failed to keep them exclusively at Disney.

I am actually glad to see the attendance fall a bit. The crowds have been unbearable and I believe it is because Disney used to be considered an excellent value. Room discounts were readily available, free dining was being offered several times a year, and ticket prices for multi-day experiences remained reasonable. Now, Disney is not considered the value it once was and in a recovering economy, people are analyzing how they spend their dollars. I honestly don't think Disney parks can handle their crowd level with current demand. I think that is helping shift people to Universal and Sea World. A lot of people are opting to skip DHS and instead spend that vacation day somewhere else. I can completely understand why too. I recently told a friend going to Disney this week, who is purchasing Day passes, to not even bother with DHS.

I think we'll see a steady decline in attendance until DHS and the other projects are finished. Right now, there's not a whole lot of appeal to head to Disney.

I don't know if I would go as severe as chaos but things definitely aren't the greatest right now.

I agree that Disney is catching up to Disney with everything they are doing as well it o also don't think they have reversed roles yet.

As for construction, the roads are necessary and that's just not Disney that has road construction. The parks construction is all happening at once because Disney waited too long to do anything.