People gather at the Magic Kingdom theme park before the “Festival of Fantasy” parade at Walt Disney World in Orlando, Florida, U.S. July 30, 2022.
Octavio Jones | Reuters
Disney parks are defying a slump in international travel to the U.S., posting record quarterly revenue for the company’s experiences division on Wednesday.
The experiences segment, which includes Disney’s theme parks, cruise line, resorts and consumer products, reported nearly $10 billion in revenue for the fiscal third quarter, a 10% jump from the same quarter a year prior and a quarterly record. The division has seen record revenue for six consecutive quarters.
The division recorded operating income of more than $3 billion, up 20% from the same period a year prior. Shares of Disney were 2% higher Wednesday.
“It’s important, I think, to highlight that we’re performing significantly better than our competition,” Disney CEO Josh D’Amaro said during Wednesday’s earnings call. “And in doing that, delivering strong volume and per [capita] spending results. And to remind everyone we’re achieving this even during a period where there’s a fair amount of macro uncertainty.”
Last month, rival Comcast reported lags in theme park attendance, particularly in Orlando, Florida.
While tourism grew worldwide last year, the United States was the only major destination to see a drop in foreign visitors, according to the World Travel & Tourism Council. Overall, international travel to the U.S. fell 6%, the organization found.
Travel bans, visa fees and invasive searches at ports of entry are all factors in international travelers leaving the United States off their travel itineraries, according to the WTTC. Trade frictions, geopolitical unease and safety concerns have also contributed to the drop in demand for travel stateside, travel experts told CNBC.
And yet, at Disney, domestic park attendance was up 3% and guest spending rose 4%, CFO Hugh Johnston told CNBC. He also called out the “very strong attendance” at Walt Disney World in Orlando.
“Those numbers are somewhat different than what you would have seen from our competitor down there, as well as some of the reported traffic coming through Orlando [International] Airport,” he added.
The company attributed strong attendance to its Cool Kids Summer promotion, which features kid-focused character meet-and-greets, dance parties and air-conditioned hangout spots as well as free water park admission for hotel guests.
Disney also recently refreshed and reimagined park attractions like Buzz Lightyear’s Space Ranger Spin, Big Thunder Mountain Railroad and the Muppets-themed Rock ‘n’ Roller Coaster.
“Disney activated their fans to visit the theme parks during the quarter using a mix of marketing and discounting campaigns targeting young families and residents,” said Gavin Doyle, founder of MickeyVisit.com. “Despite a massive slate of upcoming rides that might have encouraged guests to delay their visits, Disney has found ways to create urgency and enticing opportunities to visit the theme parks now.”
These efforts “work to deepen [Disney’s] connection to modern audiences,” Doyle said.
On the West Coast, the California-based parks had a similar promotion at Disneyland in Anaheim.
“Disneyland’s targeted discounts for California residents and kids ensured that families did not skip visiting the parks this year,” Doyle said.
Disney’s experiences segment also benefitted from the addition of two new ships to its cruise fleet, the Disney Destiny and the Disney Adventure. Together these cruise liners increased stateroom capacity by around 50% and helped push revenue from the resorts and vacations piece of the division up 17% to $2.77 billion for the fiscal third quarter.
