Disney parks are experiencing a major crisis

Disney is falling short in its Experiences division, despite the fact that its theatrical films have been more successful than they have ever been.

Disney is not exactly in a poor position. Box office hits such as “Inside Out 2” (which has resulted in a flood of animated projects and a revitalization of the Pixar label) and “Deadpool vs. Wolverine” (which has injected renewed strength into the much-needed Marvel) contributed to the company’s announcement of its financial results for the second quarter, which was full of optimism. On the other hand, there is one aspect of the firm that is not as rapidly growing as others.

Not much for growth. Let’s have a look at the numbers: the Disney Experiences division of the company, which encompasses both the theme parks and the cruise ships, reported revenues of $8.4 billion during the most recent quarter. This represents a very small increase, only 2% when compared to the same period of time in the previous year. On the other hand, profits were negative, declining by 3% to a total of $2.2 billion.

Here are some further data. According to Disney, this decline in data can be attributed to “moderation in consumer demand (…) which exceeded our expectations.” In addition, Disney disclosed that the slowdown in profitability will have an impact on the company’s national parks for a number of “next quarters.” In the event that we place those of Disney Experiences for the year 2023 on the table, the figures take on a more internationally relevant perspective. During that time period, the parks and cruises division was responsible for seventy percent of the company’s revenue. However, by the year 2024, cruises and parks will only be able to provide forty percent to the company’s overall revenue.

A deterioration can be seen in the industry. This is not a problem that is exclusive to Disney. Since several months ago, the amusement park industry has been in a state of free decline. Additionally, Six Flags, the largest regional operator of amusement parks in North America, reported negative figures for revenue (-1%), attendance (-2%) and spending in the parks (-5%) in the second quarter, according to a report that was published by Variety on the subject. Comcast, the owner of Universal Destinations & Experiences, reported a 10.6% drop in revenue from its parks during the second quarter.

It’s not all terrible news, either. One piece of positive news is that there has been an increase in the number of people who have visited. Extremely modest in the majority of instances, considerably more obvious in others, and producing unfavorable outcomes in a few instances. The following is a list of the five parks that receive the most visitors around the world, along with their respective numbers:

The only park that is seeing negative numbers is Disney’s Hollywood Studios, which is the tenth most visited park. The park has seen a minor decrease in visitors, going from 11 million to 10.3 million, which is a 5.5% decrease. It is quite evident that the issue is not that the industry is not expanding; rather, it is expanding in a very restricted manner; we are still a long way from the attendance levels that were prior to the epidemic. It is also important to pay attention to the geographical location of these parks. The first two parks on the list are located in the United States, but the next three parks, which have experienced phenomenal growth, are located in Japan and China. These countries are still experiencing the post-pandemic surge with the elimination of restrictions that have been lifted in the United States and Europe for a considerable amount of time.

Utilizing a crisis to one’s advantage. The year immediately following the epidemic saw an increase in the number of people visiting Disney parks. This was due to the fact that people were eager to travel, and Disney parks offered a closed location that was already prepared for the health restrictions that were imposed as a result of the pandemic. However, the current phase of the global economy is experiencing a recession, which is not only in conflict with the rebound effect that occurred after the boom of travel (and spending in general), but also with the consistent increase in ticket prices that Disney has been implementing since 2014. Over the course of the past twenty years, ticket prices have increased by a factor of two, with increases occurring practically annually, as reported by the specialist media site known as AllEars.

A shift is necessary at Disney. When considering the fact that Disney’s primary source of revenue comes from its theme parks, cruises, and merchandise sales, it is evident that the company need a significant shift in this position. This is in stark contrast to the more advertised and media-friendly streaming services. It is not possible to achieve as much success as ‘Deadpool and Wolverine’ or ‘Inside Out 2’ on an annual basis; thus, it is necessary to undergo a significant restructuring of its strategy for the experiential branch of the business.

Disney parks are experiencing a major crisis

By nr39r

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