Hotel bookings at Disney theme parks point to increased recovery
Walt Disney Co. reported an increase in bookings at its U.S. theme park hotels for its latest quarter, another sign of consumers returning to domestic destinations as its Asian parks grapple with pandemic disruptions.
Executives at the Burbank, Calif.-based media giant said on Wednesday that its Florida and California theme parks contributed to a generally brighter picture that includes an increase in subscriptions to its streaming entertainment services, which count now more than 221 million paying subscribers worldwide.
Disney’s streaming services and many competitors have contributed to a surge in content production, which in turn has spurred demand for studio space in Los Angeles and other entertainment hubs. Disney has now narrowly overtaken Netflix, which had around 220 million subscribers worldwide after losing 1 million in its last quarter.
Disney executives told analysts on a conference call on Wednesday that its theme park attendance and per capita spending approached pre-pandemic levels at its national parks for several days in the quarter ended July 2. , with an increase in occupied hotel nights and higher prices for these rooms. The gains were partially offset by higher labour, procurement and other costs.
“In another sign of robust demand we’ve seen across our parks and resorts, our domestic hotel occupancy in the third quarter was 90%,” Disney Chief Financial Officer Christine McCarthy told analysts. reference to company-owned hotels at Disney World in Orlando. , Florida and Disneyland in Anaheim, California. Advance hotel bookings are happening at a rate close to pre-pandemic levels, McCarthy said.
Executives said hotel stays are an indicator that national parks, as well as Disneyland Paris, are attracting more customers beyond regional visitors by car. Disney parks in Shanghai and Hong Kong continue to struggle with periodic closures caused by coronavirus outbreaks.
Overall, Disney CEO Bob Chapek said the company’s parks are moving beyond just pent-up demand, with new attractions opening in the last quarter that are based on owned movie franchises. to Disney, including its Avengers and Star Wars films, and are now attracting new customers.
Disney said total revenue for the last quarter rose 26% from the year-ago period to $21.5 billion, with net income rising 53% to $1.4 billion. . The division that includes its theme parks in the U.S. and overseas saw revenue rise 70% year over year to $7.4 billion.
Theme parks are major drivers of nearby hotel and retail demand, especially those that operate as year-round destinations. Several of Disney’s rival parks in the United States reported similar increases in attendance and revenue for the last quarter, including Cedar Fair Entertainment, SeaWorld Entertainment and Comcast’s NBCUniversal. Six Flags Entertainment is due to discuss its earnings on August 11.
Theme park consultant Dennis Speigel told CoStar News he is closely monitoring attendance after Independence Day, especially as school begins this month in many U.S. cities. He expects most major operators to end 2022 strong, especially with events around Halloween in October that have proven popular during the pandemic amid pent-up demand.
Still, he doesn’t expect the industry to fully return to pre-pandemic attendance and revenue until late 2023 or early 2024. Park operators still face widespread staffing shortages that prevent them to take full advantage of growing crowds through food and merchandise sales, while hampering efforts to minimize wait times for rides and concessions.
“You could see footfall slowing starting in the current third calendar quarter, especially with customers still dealing with other things in their lives like inflation and interest rates,” Speigel said, founder of International Theme Park Services in Cincinnati, in an interview. Wednesday. “But things like per capita spending in these parks still looks very strong compared to a year ago.”