Skift Take

Theme park attendance is normalizing after record highs, but Disney eyes cruises as a major growth area with heavy investment planned.

Jesse Chase-Lubitz

Disney’s executives said Tuesday they see strong attendance at the company’s theme parks but that the attendance numbers marked a slowdown from recent highs.

In the last months of last year, the parks set all-time records, and now a reset is underway.

“In terms of attendance, what we’re basically communicating is relative to the post-COVID highs, things are tending to normalize,” said CEO Bob Iger. “We still see in the bookings … as we look ahead … [signs that] indicate healthy growth in the business. So we still certainly feel good about the opportunities.”

CFO Hugh Johnston also pointed to a cooling off: “We are seeing some evidence of a global moderation from peak post-Covid travel,” he said.

Separately, Johnston said Disney is “leaning heavily” into cruises.

“The cruise business, frankly, is one that has an enormous number of opportunities for us over time,” Johnston said. “We expect to get excellent returns out of the business.”

Disney investing for growth

On Tuesday the company reported results for the three months ending March 31, the second quarter in the company’s fiscal calendar.

Disney said in February that it would nearly double its expenditure on its experiences business by investing $60 billion in expanding its theme parks and cruise lines over the next decade, with most of that money going towards increasing capacity.

Its experiences business — which includes parks, its cruise line, and its consumer product sales — increased its capital expenditures by 8% to $2.6 billion. The capital went primarily to improve park attractions and expand its cruise ship fleet.

Disney’s theme park growth

The quarter saw strong results in the company’s “experiences” unit, with a 12% increase in segment operating income and a 60 basis point margin expansion.

• Domestic park revenue was up 3% year-over-year while operating income was flat. Walt Disney World Resort drove higher operating income. Higher average ticket prices offset higher operational costs despite cost-saving efforts. The company didn’t specify numbers.

• The company saw lower results at Disneyland Resort. However, executives noted that they recently greenlit the resort’s expansion plans in Anaheim, California.

• The company had improved operating income from Hong Kong Disneyland Resort — supported by increased attendance, average ticket prices, and food, beverage, and merchandise spending. A new exhibit, World of Frozen, has boosted interest since its debut in November 2023.

Disney executives anticipated “robust operating income growth for the Experiences business for the full fiscal year.”